2003: Starting with Foreign Trade

Chapter 822 Ten Years of Planning, One Day to Turn Losses into Profits!
PS: This is a transitional chapter; please skip to the next chapter if you mind.

The Yuechi A9 retains the family design of the Yuechi series in terms of appearance.

The car comes in two designs: a large five-seater and a seven-seater. The design style is nothing special; it's neither particularly stunning nor ugly, since we've seen this style twice before.

There's not much to do with design, so let's focus on power, safety, and technology.

Firstly, in terms of body structure, it comes in two models: a five-door five-seater and a five-door seven-seater. The body size is 5070*1976*1930, which is quite large.

In addition, in terms of power, this time Weilai uses its own self-developed 2.0T engine, which is also the first time that Weilai has used its self-developed engine in its new car.

The cooperation with Cummins dates back to when Weilai was first established. Later, due to the support from Anhui Province, Weilai also had many exchanges with Chery in the field of engines.

After seven or eight years, Weilai's engine technology is not much, but it is no longer too bad. Through various tests and trials on low-end pickup trucks and older models, it has now reached a certain level.

While it may not be on par with top-tier brands, it's still closely following Chery and Great Wall in the domestic market, which is one of the reasons why it was chosen for this new car.

This is one of the reasons why this size of vehicle can be priced so low: the core components are either from related companies or are developed in-house, which greatly reduces the overall cost.

No matter what, we have to take this step eventually.

No matter how much hype is made about new energy vehicles, traditional gasoline vehicles will not be abandoned by the market, even if oil prices remain high. In addition, gasoline vehicles still have certain advantages in exports, especially in Southeast Asia.

If the acquisition of Proton goes smoothly, then Wei Lai can follow the path of Geely in his previous life, using the Proton brand to rebrand his own cars and open up the Southeast Asian market.

The localization of most parts is an important part of Weilai Auto's cost reduction and efficiency improvement plan. To date, Weilai has achieved about 70% localization of parts for its new energy vehicles and other products.

Tan Jincheng hopes that one day his company's mainstream models can achieve more than 90% localization.

This is the first time a self-developed engine has been used in a new car, and its performance is still uncertain. In addition, this type of large SUV is not meant for high-volume sales. If the annual production capacity can be maintained between 3000 and 10,000 vehicles, it would be considered a successful model.

Based on current sales expectations, the Yuechi A9 is undoubtedly a satisfactory product. As for its performance after its launch, that remains to be seen.

With its self-developed engine, luxurious interior, and extra-large body, the Yuechi A9 also excels in technological sophistication.

The new car system is equipped with both Gaode and Baidu maps, providing different route options. Users can choose the appropriate navigation software according to their preferences.

In addition, it has a built-in ecosystem that can provide users with online services in all scenarios. It is even equipped with WeChat in the car, which can realize location sharing, group travel and even car intercom functions.

Thanks to Tan Jincheng's strong business layout, with numerous partners in both traditional and internet industries, Weilai can receive significant support in the field of intelligent technology, and can also achieve advanced intelligent features in fuel vehicles.

The integration with WeChat is a major highlight of the Yuechi A9, and the fleet function is also quite good. This can meet the group needs of players. Imagine a line of A9s traveling together, it's quite a sight.

This is the first time WeChat has been integrated into a car's infotainment system, which can be considered an experiment. In addition, the integration with Baidu Maps is something we discussed with Baidu during the Internet Conference regarding cooperation in autonomous driving.

Baidu's strategic vision is flawless; following in its footsteps and picking up scraps will make you quite well-off.

Traditionally, gasoline-powered cars seem to lack intelligence, but they can actually be quite intelligent, although there are some noticeable differences in handling compared to electric cars.

"If we can sell 2000 cars in the first year, that would be a great success. Going forward, everyone should pay attention to quality control of the product line and provide good service."

On the 29th day of the twelfth lunar month, during the usual New Year's Eve dinner, Tan Jincheng hosted a banquet for the company's senior executives who were still in Beicang. These people would later represent him to visit and comfort the company's on-duty staff on New Year's Eve. If Tan Jincheng had time, he would also visit the production bases of various companies.

Tan Jincheng was quite satisfied with the results achieved by Weilai in 2014. Although the explosive power of leading companies far exceeded the industry average, Weilai was able to keep up with the progress with only a few SUV models and maintain a mid-level position, which was quite good.

"Haha, actually, when we started this project, Mr. Zhang and I expected that selling 500 cars this year would be very good."

Li Xiang stayed in Beicang for the Spring Festival this year. He now has his own house here, and he spends most of his time here when he's not on business trips or going home.

This year, he brought his family over to experience the festival in the South.

"Haha, the brand influence of Weilai is still pretty good."

The development of Yuechi's sub-brand has not been smooth sailing. Tan Jincheng gives the impression of making two-wheeled electric vehicles, which are the most basic means of transportation, just like bicycles, and have nothing to do with high-end cars.

The brand name is very similar to Flash and Windspeed series, and it was ridiculed when it was first launched.

Consumers mocked the brand name for being tacky, ridiculed Tan Jincheng for overestimating his abilities, and even ridiculed anyone who dared to try and build a car.

Many in the automotive and electric vehicle industries are waiting to see him fail, eager to see how Tan Jincheng will squander the two-wheeled electric vehicle empire he built from scratch.

However, the performance of the Yuechi A1 after its actual launch was far beyond everyone's expectations; the car actually sold so well.

Why aren't consumers on their side?
The launch of the Yuechi A1 cannot compare with the high-end image of joint venture brands, but compared with the shoddy workmanship of domestic car companies, their lack of attention to technology and safety, and their service is even more incomparable, it is simply a crushing existence.

If urban SUVs hadn't been less popular when the car was first launched, the sales figures would definitely not have been what they were back then.

A similar incident occurred with the Xiaomi 1 a few years later, involving the Tongyuechi A1.

Xiaomi has driven the progress of the mobile phone industry and driven down prices. Similarly, the Yuechi series has also had some effect on the progress of the automotive industry. In recent years, facing increasingly greater threats from domestic brands, they have had to pay more attention to quality and service.

Among them, Great Wall Motors and BYD, the two major car companies, feel this most deeply.

Joint venture brands are in one tier, while domestic brands are in another. The user groups of the two are still quite distinct. Although Weilai has been claiming to compete with joint venture brands for many years, it has indeed taken away a lot of market share from them.

However, the real competitors are still domestic independent brands. The biggest competitor of the Yuechi series is Great Wall's Haval series. Before the Haval H6 was launched, the Yuechi A1 almost completely occupied the market space of the Haval series.

This put immense pressure on Great Wall Motors. If it weren't for the emergence of the H6, it's uncertain whether the Haval brand could have survived.

Wang Fengying, who single-handedly created the Haval H6, can be said to have made a great contribution to Great Wall Motors.

In the years of competition with Great Wall Motors, Tan Jincheng has also reflected on his past. He wondered if he had spared no expense back then, even offering Zhang Yong the same treatment and shares now worth over 100 million yuan, to poach her.

Does that mean the Great Wall has nothing to do with anything?

Unfortunately, this assumption doesn't exist. However, it's good to have Great Wall as a competitor. A market without competition will only become more and more mediocre.

Apple today has long lost the wow factor it once had.

The same is true for BYD. The former junior has grown into a giant in the new energy industry, selling better vehicles and developing its power battery business more rapidly than BYD.

Most importantly, the younger brother's capital skills are quite remarkable. Through various capital operations, he has brought Wei a large number of well-known domestic and international partners. Tesla alone can bring them hundreds of millions of dollars in revenue every year.

In terms of intelligent driving, there's nothing to say; not only can we not compete, but we also have to be mindful of the opinions of our smaller counterparts.

Even in terms of marketing, Wei Lai has come up with all sorts of tricks. The 24-month and 36-month interest-free policies applied to new cars have really caught their competitors off guard.

Incidentally, the interest-free policy also applies to the Yuechi A9, which may be one of the reasons why the Yuechi A9 has a good number of pre-orders.

Oh, the Yuechi A9, which launched its marketing campaign ahead of schedule, was specifically designed to counter the Haval H9, which is scheduled to be launched in the second half of this year. It's a huge blow to Great Wall Motors.

Judging from the number of pre-orders, this can be considered a perfect counterattack.

"That's not bad. Over the years, our Yuechi has built a decent image, kind of like Xiaomi in the automotive world, haha."

The brand strategy initially set by Tan Jincheng was to focus on cost-effectiveness and value for money, along with excellent after-sales service. It seems to have worked quite well, and consumers still have a high level of trust in the Yuechi series.

Tan Jincheng had never considered making high-end models of gasoline-powered vehicles.

Instead of thinking about unrealistic things, it would be better to focus on making good cars in the 10 to 30 yuan price range and establishing the Yuechi brand in people's minds. Actually, think about it: a car in the 30 yuan price range is basically the ceiling for most families and individuals. Doing well in this market would already be a remarkable achievement.

"Our biggest task after the New Year is to prepare the annual report. Our performance in 14 was quite good, and we will strive to release the annual report as soon as possible to give the market a surprise."

The annual report has not yet been finalized, but with sales of 43.77 vehicles for the year and the expansion of the battery business, Weilai Auto's 2014 annual report is sure to be impressive.

It's almost the end of February now, and the Shanghai Composite Index has soared to 3200 points, while the ChiNext Index has risen to around 1900 points. The stock market has become the topic of conversation for everyone.

The promotion of apps like Tonghuashun and Dongcai has made it easier for more and more novice investors to open accounts.

The bull market has entered its explosive phase.

As the top-weighted stock on the ChiNext board, Weilai Technology is destined not to experience the dramatic ups and downs of some small-cap stocks before the true boom period of lithium batteries arrives.

After the frenzy of the first two months after its listing, Weilai's stock price has now remained stable in the range of 75 to 80 yuan.

Its market capitalization has remained stable between 1600 billion and 1800 billion yuan.

With sales of 43.77 vehicles, Weilai's market capitalization is certainly not enough to support it. The reason why the market gives Weilai such a high valuation is mainly because of the unlimited potential of their power battery business.

Since 2014, Weilai's power battery business has grown at an astonishing rate.

In 2013, Weilai's power battery business revenue was only 200 million yuan. However, according to the preliminary financial report that Tan Jincheng has learned so far, the revenue of the power battery business segment in 2014 will definitely exceed 800 million yuan.

If we disregard investment and only consider revenue, the power battery business segment is expected to be profitable this year.

This is no ordinary signal. The power battery sector, which was first established in 2006 or 2007, has finally become self-sufficient after nearly ten years and countless injections of capital.

After a decade of planning, a turnaround to profitability has been achieved. The significance of such a financial report is so clear that even without professional knowledge, one can understand its implications.

Tan Jincheng couldn't even imagine how the market would react after the annual report was released, coupled with the bull market effect.

More importantly, in 2015, the order book for Weilai's power battery business was already full!
This is order data after gradually increasing production capacity. Based on the current order volume, the growth rate of power batteries in 2015 will also be astonishing. The revenue expectation for Weilai Power Batteries in 2015 is as high as 50 billion yuan!
It took only one year for the revenue to quadruple from 2 million yuan to 8 million yuan. If the revenue target can be met in 2015, it will be another increase of more than six times, which is a harbinger of the boom period for power batteries.

In the first three quarters, the net profit margin of the power battery sector was only around six percent. However, with the increase in production capacity, this net profit margin will become higher and higher, which will greatly improve the financial situation of Weilai.

When it came to the annual report, the senior executives, led by Zhang Yong, Yu Liguo, Hu Zhengnan, Zeng Jixiang, and Li Xiang, also looked excited.

Lü Ruifeng, in particular, was so excited that he wanted to mention it.

As the head of the power battery division, Lü Ruifeng has worked diligently for nearly a decade. He is currently the most low-profile executive in the Weilai Group, and he almost never accepts any interviews outside the industry.

He worked quietly at Weilai for so long, engaging in technical research and development and management. After Weilai went public, he also became worth over 100 million yuan.

But more than his net worth of over 100 million yuan, what excites Lü Ruifeng the most is the turnaround of the power battery sector.

"I really admire you, Mr. Tan, for losing money for ten years. To be honest, I really didn't expect you to be able to persevere. No matter what, we have to have a drink today."

Tan Jincheng is from a humble background, but he has a high social status. However, those who know him well know that he is very down-to-earth.

The gatherings of the executives of Weilai Group were also quite interesting. There were no fancy hotels, no abalone, sea cucumber, or shark fin soup. Instead, they pulled up tables together in the company cafeteria to eat barbecue and drink beer.

It looks exactly like a roadside stall.

It's not that Boss Tan is stingy; although it's barbecue, the ingredients are all very good, and there are dedicated staff to serve you.

The reason Tan Jincheng used this approach was to convey the message that he hoped senior executives would be more down-to-earth.

The people present are at least tens of millions in assets, and they don't usually have many opportunities to truly connect with the grassroots. Tan Jincheng is afraid that if they stay away from the real consumer group for too long, they will cause some trouble.

Like the Great Wall in Tan Jincheng's memory, since Wang Fengying left, the tricks they came up with have become more and more outrageous.

The new car brand is just a bunch of coffee names, and it's clearly targeting male consumers, but it's hired a feminist as its spokesperson. These deceptive moves show that it's out of touch with real consumers.

"Haha, that's right. Actually, I've been thinking about it myself. I was only 20 years old when I met Engineer Lü. I'm quite impressed with myself. Come on, Engineer Lü, let's have a toast."

Tan Jincheng also sighed, saying that developing power batteries is really more difficult than developing automobiles.

Over the past decade, Tan Jincheng has often had headaches due to the investment. Almost all of Dexian Electronics' profits have been transferred to the parent company, which has resulted in little improvement in employee benefits and other aspects of Dexian Electronics over the years.

People online often praise the good benefits offered by companies under Mr. Tan's management, but Dexian Electronics has a different opinion.

"Haha, that's right. To be honest, when President Tan came to me back then, I thought you were joking with me."

Lu Ruifeng noticed how Tan Jincheng addressed him, and felt a warmth in his heart.

There's a saying in the business world that following Boss Tan guarantees success, and it's true. Those who followed him from the very beginning, even some of the older employees whose abilities were clearly diminished in the later stages of the company's development, were given a dignified way to leave.

Those who don't have much ambition and are unwilling to leave the company will be given a quiet, low-paying job to do what they can, so that they won't be discarded like used tools.

When Zhang Yong and others met Tan Jincheng, although they were new to the automotive industry, Tan Jincheng had already achieved some success and had a certain reputation in the industry, which was quite different from when Lü Ruifeng first met him.

This electric vehicle company, which has only been established for a few years, has decent sales, but it is still some distance from the leading companies. Apart from having the title of an Olympic sponsor, it can be said to be nothing special.

"Haha, actually, besides the Institute of Physics, we contacted many other institutions, but back then, no one looked up to us. Some didn't even get in the door. It's a sad story."

"Oh? Is that so? I've never heard you mention it before. Shall we take this opportunity to talk about it?"

Zhang Yong and the others were unaware of these past events, and with the atmosphere building up, they all joined in the commotion.

"Haha, let's not talk about it anymore, let's not talk about embarrassing things, let's drink, let's drink."

The main issue is that there were quite a few people at this gathering, including service staff. If word gets out, it could be damaging to those organizations, making people mistakenly think that Boss Tan is holding a grudge.

"Haha, alright, alright, let's drink; come on, let me make another one, wishing Weilai all the best."

Lu Ruifeng is someone who has been through it all and has come from an institution, so he naturally understands the ins and outs of it. The Institute of Physics also held several meetings to discuss its cooperation with Flash Technology.

Back then, it was perfectly normal for these organizations to look down on private enterprises, especially when a 20-year-old kid came knocking on their door.

"That's right. Let's all wish Weilai all the best, and everyone else all the best too."

Zeng Jixiang was the boss's confidant and understood his thoughts. He hadn't said much all night, but he stepped in to help him out.

"Yes, yes, that's right. I also wish you a happy Chinese New Year. Oh, by the way, there are only nine days left before work starts. I wish you good luck on your first day of work."

Boss Tan, who usually has a low alcohol tolerance, really let loose at this moment.

"Boss, that's really a downer. Why does this wine taste bitter?"

"That's right, hahaha. But that's an interesting point. I'll edit it down and send it to some of my friends later to annoy them."

After a lively high-level gathering, which lasted for more than three hours, Tan Jincheng returned home reeking of alcohol, and it was already past 10 p.m.

Another year has come to an end, and a new beginning has arrived.

(End of this chapter)