2003: Starting with Foreign Trade

Chapter 842 A Legendary Car

Less than a month after the Mid-Autumn Festival, the employees of the company directly under Tan Jincheng's control were happy again.

After receiving their Mid-Autumn Festival and National Day holiday bonuses, they once again received a red envelope from their boss in a personal capacity.

"1017 yuan, what does this number mean?"

"Didn't you see the news? The boss's daughter was born on October 17th; hehe, I didn't expect the boss, with his thick eyebrows and big eyes, to be so romantic."

"Every employee will receive one again. How much will this cost?"

"The news said it was over 8000 million yuan; and it must have been our boss. Over the past few years, he's given out hundreds of millions of yuan in private red envelopes."

Currently, the total number of employees in companies directly under Tan Jincheng's control exceeds 80,000, which translates to over 80 million yuan, a truly substantial sum.

"I really hope the boss's wife gives birth every year, preferably in the second half of the year, so that we can get a red envelope from the boss every year."

"Your idea is a bit dangerous; it could kill the landlady, haha."

"Speaking of which, the boss's wife is only 28 years old, and the boss has just turned 30. Do you think they might have another child?"

"Who knows? But it might actually be true. Let's just wait and see."

Mr. Tan's lavish distribution of red envelopes has sparked a great deal of discussion in society, with many media outlets compiling statistics on his generous red envelope giveaways over the years.

The total amount of bonuses from the two childbirths (to the entire holding company) and the three company listings (to the listed company itself) is 200 million yuan, all of which came from Boss Tan's own pocket.

Once money is in the pockets of private entrepreneurs worldwide, it's very difficult to get them to take it out again, even when it comes to philanthropy, which involves many self-interested considerations.

This kind of behavior—using one's own money to give out red envelopes without any ulterior motives—is extremely rare among entrepreneurs.

"The main focus is on a sense of mission. We should do charity work, but it's also necessary to hold some events from time to time to win over the employees so that they will work harder for you."

"You little brat, your sentimentality has really screwed me over. Our company's official Weibo comment section has been flooded again."

"Hehe, you guys getting scolded has nothing to do with me. Who told you to sell at the highest point? Besides, giving out red envelopes when a baby is born is a tradition of mine. If I didn't give one after having a daughter, I would have been scolded."

Sending red envelopes has been trending on social media, and unexpectedly, it has also caused a backlash against Brother Boatman, with Dizi's comment section almost being flooded with criticism.

I was so angry with this senior colleague that I called him to complain.

"Do you think everyone has the same cash flow as you? Go out and ask around among our industry peers, who wouldn't envy your cash flow?"

"Haha, well, who told you to sell at the highest point? Don't tell me you didn't know that. But since you called, Uncle, come to my child's one-month celebration!"

今年6月17日与6月23日，船夫哥两次共计减持了BYD股份5824.9万股，减持总金额超过了35亿元人民币。

What does this mean? The third quarter is over, and BYD's profit for the whole year can basically be calculated. The net profit is unlikely to exceed 30 billion yuan. The gains from the two share reductions exceeded the annual net profit. It would be a miracle if they didn't get criticized at the peak.

大盘是在6月15日是5178点位见顶的，之后就是第一轮下跌，而两轮下跌过程当中的6月17日与23日正好是大盘下跌反弹中继，可以说是精准减持了。

Another point is that during the national team's market rescue efforts in July, relatives of BYD executives reduced their holdings of the company's shares on the secondary market.

Although the amount of the reduction was not large, it still caused great controversy in the secondary market, which was in a state of high alert at the time, and its nature was quite serious.

The executive was also forced to come out and apologize.

Dizi was under considerable pressure at the time, especially since one of his peers had invested a huge sum of money to increase his holdings, which made their pressure even greater.

Compared to Di Zi, Wei Lai and the executives of Flash Drive seem to have a much broader perspective.

Under Tan Jincheng's leadership, the company's senior executives actively increased their holdings and did not engage in any secret reductions during the market rescue period.

Tan Jincheng had given prior notice on this point: there was an opportunity to reduce holdings and realize profits, but it couldn't be done at a sensitive time.

Among those arrested, the white-coated executives were the most famous, but in the entire market rescue process, only the white-coated executives were arrested. In the leading securities company alone, 13 senior executives were arrested and 21 senior executives were punished.

In addition, as many as six securities firms were investigated, and five senior executives of the China Securities Regulatory Commission (CSRC) were dismissed. Furthermore, many more fund managers, prominent individual investors, and top private equity fund managers were investigated and dealt with.

During this special period, if any senior executive fails to properly manage their own affairs or those of their relatives, Tan Jincheng will definitely deal with them.

"What? You're going to throw a big party? We'll see. If you have time, you can come. If you don't, I'll send someone over. Don't worry, I know your character, the red envelope will definitely be big."

"Yes, we're planning a big celebration, to make it lively. Uncle, if you have time, please come over. I have something to discuss with you."

"Is there something you need? The full moon celebration should be in mid-November, right?"

November is a very busy month for car companies, but Tan Jincheng said he had something to talk about, which piqued Tan's curiosity.

"Yes, there is something I need to discuss. We're talking about promoting green license plates for new energy vehicles. I've also invited executives from other car companies, so this is a good opportunity for an industry gathering."

There was a moment of silence on the other end of the phone. The boatman, who was talking about the green license plate for new energy vehicles, got angry!

He never expected that Wei Lai would design it in advance and apply for a patent in conjunction with the GA department. You know, the BYD Research Institute was also designing this.

Their design was a complete waste of time.

Here's a little-known but interesting fact: many consumers may not know that license plates for new energy vehicles are actually patented.

According to the agreement with the Ministry of Public Security, the joint owners of new energy vehicle patents do not charge other OEMs or consumers for the patents at present, so you can use them with confidence.

But who knows what the future holds? What if one day the GA department, which also holds patent rights, plans to charge patent fees?
At that time, even if Wei Lai, who jointly owns the patent rights, stops manufacturing cars, he will still be able to live very comfortably thanks to the patent rights.

Foreign companies like Nokia and Motorola have thrived despite the rapid decline of their main businesses, thanks to their patents. Similarly, there is a Chinese company that owns the patent rights to USB flash drives, Netac.

Tencent supported a listed company solely based on its patent rights for USB flash drives, and it even rented their company's building.

"Hey, if we'd known you'd apply for a patent, we wouldn't have bothered with all that trouble."

The boatman had nothing to say about this. Back when the ES6 was being promoted, Weilai had applied for a batch of special license plates, which are now commonly referred to as green plates in the industry, to distinguish them from the existing yellow plates.

The publicity was quite effective at the time. The Weilai ES6 with its special license plate was indeed eye-catching on the road, bringing a lot of traffic to the Weilai ES6.

Actually, I should have thought of that earlier. This kid is as cunning as a monkey, how could he not have prepared in advance?

"Hehe, this really wasn't my idea, and I don't have the ability to do it, so you can't really blame me, Uncle."

"Don't give me that. If it weren't for that customized license plate advertising scheme you guys came up with before, the higher-ups definitely wouldn't have noticed this."

The boatman was still being stubborn, but he knew in his heart that what Tan Jincheng said was true. It was nothing for a company to customize a batch of license plates, but if it wanted to promote them on a large scale, it must be the will of the higher-ups.

In fact, the captain even gave up some of his own interests in this matter, voluntarily handing over half of the patent ownership.

"Well, it's not a big deal that you guys took the lead on this, after all, you're a real leader in the new energy vehicle industry now."

Both BYD and Weilai have new energy vehicle strategies and are developing their own industrial chains. In fact, BYD has an electronics manufacturing business that Weilai doesn't have, and its business performance is much better than Weilai's.

However, in terms of net profit, it cannot compare with its counterpart. Last year, Weilai earned 50 billion yuan, second only to Great Wall, while BYD, with a much larger revenue than Weilai, only achieved a net profit of more than 4 million yuan.

BYD's revenue is expected to reach 800 billion yuan this year, but its net profit is only expected to be 30 billion yuan.

According to the third-quarter report that Wei Lai pre-disclosed, the other party's net profit this year is estimated to be at least 600 billion yuan, while its revenue is less than 60 billion yuan. The net profit of more than 10% makes him extremely envious.

Nationwide, only Great Wall Motors, which also focuses on the SUV market, can match this bizarre profit ratio. However, Great Wall's new energy vehicle industry chain is extremely weak.

2015 was a year of explosive growth for new energy vehicles. Once it enters a period of rapid growth, Weilai's revenue will expand rapidly, and its scale will be unmatched by other peers.

The collective rebound of A-shares in September saw BYD rise by 20%, while Weilai's increase reached 35%. After the National Day holiday, it continued to rise, and its stock price is now approaching its previous high. This is the market's response to Weilai's expectations.

"By the way, I heard you're going to launch a concept car. Will you be showcasing it at the Guangzhou Auto Show?"

"Let's launch it next April. We don't have time for this year's Guangzhou Auto Show. We were originally planning to launch it, but after acquiring Lotus, due to some improvements, the technology is not yet mature enough, so we have to postpone it."

"Next April is fine too. There are quite a few new cars at this Guangzhou Auto Show, and our Yuan series is also going to be launched. Don't steal our thunder."

At this year's Guangzhou Auto Show, Audi launched the all-new Q7, Mercedes-Benz went even further by updating five new models at once, and BMW also unveiled the 6 Series. With the BBA (BMW, Mercedes-Benz, and Audi) all making a strong push, other automakers were not to be outdone.

The most attention-grabbing models are BYD's Yuan series, Chery's Arrizo 5, and Geely's flagship model, the new Emgrand, which is considered Geely's lifeline and is planned to launch an S7 version this year.

In addition, foreign automakers are paying close attention to Porsche's new 911 series, while other automakers such as Lexus and Kia have also launched new versions of their flagship models. Even Mitsubishi, with the recovery of Japanese brands this year, has begun to exert its strength by introducing the Outlander PHEV version, a plug-in hybrid version, in order to ride the wave of new energy vehicles and further boost Mitsubishi's sales.

With the new partners and a restructured strategy for the Chinese market, Mitsubishi's sales rebounded to over 10 units in 2010 and began to recover year by year, reaching 15 units in 2013.

Last year, affected by the strained relations between the two countries and the sluggish consumer sentiment, the overall sales of Japanese brands declined, and Mitsubishi was no exception. However, even so, Mitsubishi still sold 11.9 vehicles last year.

This sales volume is actually quite good for Mitsubishi Nakakuni, whose business focus is not on complete vehicles and whose domestic production capacity is limited. Since taking office, Nagasawa Hiroshi has been quite successful in implementing Mitsubishi's overall recovery plan.

However, they made a mistake this year, misjudging the relationship between the two countries. By the time they realized their error and tried to make adjustments, their unreasonable product structure and the advantages of their competitors caused them to miss the market recovery.

As another major shareholder, Tan Jincheng had long ago reminded Chang Zeyu not to pay too much attention to ZZ, but to focus on doing a good job with the two main models. Consumers may be influenced by emotions, but in the end, it is the products that speak for themselves.

Compared to other Japanese brands, Mitsubishi has a relatively good reputation in China, after all, it did provide a lot of help in the early stages of my country's automobile industry, and the brand is also relatively low-key.

If you just focus on these two points in marketing and then work on improving the product itself, its sales will not be bad.

Unfortunately, Nagasawa Yu didn't listen to him, or rather, Nagasawa Yu himself couldn't make the decision at all. After several years of good sales, the headquarters must have had some ideas, and all that messing around caused them to miss out on a big wave this year.

The introduction of the hybrid version of the Outlander is also an attempt to salvage some sales.

"I'm afraid it's more than that. Your marketing target for this year's Guangzhou Auto Show should be Lotus, right? The Lotus is selling very well in China."

"Haha, you can't hide it from your uncle, I have indeed been considering that."

It's a concept car, not something actually sold on the market. Even if it's technically substandard, it's not a big deal. The main reason for the delayed debut is, as Boatman Brother said, to make way for Lotus.

The Lotus brand, which has been generating a lot of buzz in the second half of the year, made its first official appearance at this year's Guangzhou Auto Show since Tan Jincheng took over.

His prestige is definitely going to be maximized. In addition to the Lotus, the other Lotus models currently on sale have also been unveiled in China. The current Lotus CEO, Michael Kimberly, even plans to attend the Guangzhou Auto Show in person.

Since pre-sales began in July and official deliveries commenced at the end of August, the lotus series has seen quite good sales, thanks to online hype and a series of promotional activities, including its establishment in Wuhan.

By the end of September, nearly three months into the sales period, Lotus had sold a total of 178 vehicles, and sales have continued to be good since October.

As it is a fully imported model and the Heysel plant has limited production capacity, the delivery time for domestic orders alone is already scheduled until January next year. Sales are also very good in the global market, especially in Europe.

This further strained the already tight production capacity of the Heysel plant.

This isn't a case of scarcity marketing. Luxury sports cars rarely come in the standard version; they're mostly for people who have plenty of money and are into personalization.

Customized versions definitely have a longer production cycle than standard versions. When they sell well, they become even more popular in the market. That's just how consumers are; the better they sell, the more sought after they become.

The better the sales, the more debts are incurred.

At the current rate, the Lotus series is expected to sell at least 300 units in 2015, with a total sales volume of around 350 units, which is expected to bring Lotus more than £4000 million in revenue.

These are all changes that Lotus could not have predicted in the first half of the year.

By focusing on cost reduction and revenue generation, in his first year at the helm, Wei Lai leveraged his market advantage in China to bring about a qualitative change for Lotus. Although it still couldn't compete with luxury sports car brands like Ferrari and Porsche, everyone knew that if this trend continued, Lotus's revival was uncertain, but at least it wouldn't be as half-dead as it is now.

With its core business already solid, it's understandable that Weilai would prioritize the Lotus brand in its promotional strategy this year.

Weilai Chunxiao Production Base.

In the vehicle assembly workshop that is already in operation, Zhang Li accompanied Zhang Yong as they repeatedly inspected each production line.

"These have probably been the two most stressful months of my career."

Wearing a safety helmet, Zhang Li gave CEO Zhang Yong a helpless, wry smile.

"Haha, that's good. Pressure can be a motivator. But we can't blame you. We all have our responsibilities. Who knew the car market would turn around so suddenly this year?"

In short, if it sells out, it really does sell out.

Especially the Yuechi A1.

Since its launch in 2008, the Yuechi A1 has not only consistently ranked among the top-selling SUVs and can compete with joint venture brands, but has also maintained a tenacious vitality over the past eight years.

Against the backdrop of a booming SUV market, the Yuechi A1 outperformed the overall market in the first eight months of this year, and the expected scenario is that it will continue its steady growth trend to the end of the year.

Unlike previous years when joint venture brands dominated the SUV market, this year's newly upgraded Yuechi A1, which also saw a price reduction, has completely taken over the SUV market, with sales far exceeding others.

Take the 1.5T model as an example. With the stimulus of policies in October and the purchase tax being halved, it entered a period of full-scale boom, with dealers urging for additional orders every day.

With its stylish and timeless design, the Yuechi A1, now available in the 10 RMB price range thanks to preferential policies, boasts keyless entry across the entire range. Furthermore, upgrades to its headlights, reversing camera, ESP, and intelligent driver assistance systems further enhance its appeal.

Just look at the partners of the Yuechi series to see how much effort Weilai has put in. They include excellent domestic supply chain suppliers such as DJI, Hikvision, and Fuyao, as well as well-known domestic component suppliers such as Horizon Robotics, which they hold controlling stakes in, and Top and Joyson, which they have invested in and supported.

With an entry-level price of 10 yuan, you can experience driving pleasure that is comparable to that of joint venture vehicles costing 30 yuan. Not to mention, in terms of service, Weilai has always done a better job than other OEMs.

Oh, right, there are also 24-month and 36-month interest-free installments.

With such a significant investment, the gross profit margin will definitely decrease. However, it's okay. It's normal for the gross profit margin of the main sales model to be low, but it can drive up the sales of other models as well.

Similarly, the Yuechi A3, which can sell more than 10,000 units per month, and the Yuechi A9, which also has decent sales, have much higher profit per vehicle.

In addition, vehicles like pickup trucks and Tank 300s, which are considered niche tracks, can also generate considerable profits per vehicle.

There are many large-scale car companies in China, but when it comes to profit per vehicle, only Weilai and Great Wall are truly outstanding. Great Wall's average profit per vehicle is around 9000 yuan.

Although Weilai's sales volume is lower than Great Wall's, its profit per vehicle is higher, reaching around 1.05 yuan, ranking first among domestic brands.

The advantages of the industrial chain, the high degree of localization, and the increase in gross profit margin driven by the rise in sales of new energy vehicles.

Although the profit margin per Yuechi A1 is not high, it sells a lot of vehicles.

But it was precisely because of the phenomenal sales in October that Zhang Li had a major headache. He could sense that, under his watch, a legendary domestic SUV was about to be born.

"We should have no problem with our average monthly sales exceeding 3 this year. Under these circumstances, we must ensure quality. We absolutely cannot cut corners to meet delivery deadlines; that's something the boss cannot tolerate."

"I understand. We're here for the long haul. The boss even said he'd help open up export markets for the Yuechi series."

"You've certainly been under a lot of pressure these past few months, and the workers are under a lot of pressure too. But we still need to pay attention to managing the workers' emotions. If necessary, we can add robots to the workshop and promote intelligent manufacturing."

With a significant increase in workload, it's understandable that employees will be upset. At this time, managers need to provide timely reassurance.

"If we can pass this test of production capacity, we will have a lot of new experience in production capacity planning this year, which can be better applied to the new energy vehicle supply chain."

Throughout October, the Yuechi A1 alone sold 3.8 units, once again breaking the sales record for domestic SUVs and attracting the attention of the entire market.

Eight years after its launch, this SUV, also the first true model from Weilai, seems to maintain its unique vitality, much like the company itself. It continues to break its own records and those of other domestic Chinese brands.

By the end of October, the Yuechi A1's annual sales had reached nearly 300,000 units. If it can maintain monthly sales of over 30,000 units in November and December, it will not only set a new record, but also significantly boost the expected annual sales of 500,000 units.

On November 5th, Weilai officially announced its overall sales data for January to October of this year.

From January to October, Weilai sold a total of 510,400 vehicles, including 437,500 Yuechi series vehicles (A1, A3, A9, etc.) and 41,200 new energy vehicles (Aion series, Weilai ES6, Huanghai Auto, etc.).

We achieved our annual sales target two months ahead of schedule!
The following day, the last trading day of the week, stimulated by the positive news of Wei Lai's sales plan, A-share auto, auto parts, and new energy vehicle concept stocks all rose, leading the three major indices.

Weilai shares closed at 122.18 yuan, up 3.17% on the day, only 6 points away from the previous high of 130 yuan.

This also means that even among those who bought Weilai shares at the peak of the stock market crash in June, only a very small number are still trapped if they choose to remain inactive.

Weilai became one of the few blue-chip stocks in the Shanghai and Shenzhen stock markets that broke even in just five months.

On the same day, Ali announced its withdrawal of investment from Meituan. Since it was not cooperating with Ele.me for the time being, this also meant that Ali, which had suffered a complete defeat in the local life group buying and food delivery fields, was now in a near vacuum.

The day after Ali officially announced its withdrawal of investment from Meituan, which was over the weekend, Tencent took the opportunity to announce an additional investment of 10 billion US dollars in Meituan.

"Hehe, this is a real slap in the face. Let's help Lao Ma and launch an internet marketing campaign for the Yuechi A1."

The entire Yuechi series accounts for 85% of Weilai Auto's total sales. There are only two months left, so we have to maintain this momentum.

(End of this chapter)