2003: Starting with Foreign Trade

Chapter 847 "Bringing Down the Prices of Luxury Cars"

P.S.: I was late getting back from the company's annual meeting last night, sorry.

Top-of-the-line features at an affordable price!

This is the headline given by professional automotive media to the new car from Weilai after the press conference.

A car costing 300,000 to 400,000 yuan is certainly not cheap, nor is it affordable. However, it is worth considering its solid materials, luxury comparable to the Audi A8, and intelligent driving capabilities that lead the industry.

Furthermore, although Tan Jincheng repeatedly emphasized that autonomous driving is only an auxiliary driving function and cannot replace the existing driving mode, it is undeniable that it is indeed a very good gimmick.

Driven by the desire to experience self-driving technology, many car enthusiasts inquired about test drives and ordering vehicles after the press conference.

"Don't worry, everyone. We will have a demo car at the Guangzhou Auto Show. You are welcome to come to our booth for a test drive."

If the ES8 is launched three years later, it may not cause much of a stir. After all, as a new internet brand, they are better at creating hype. Besides, once there are too many things, they don't seem so novel anymore.

However, in 2015, the ES8 was still very popular despite its guide price exceeding 40 yuan.

If the ES6 is positioned to compete with the BMW i3 series, then the ES8 is positioned to compete with the BMW X7, Mercedes-Benz GLS, and other similar models. With a price tag of around 40 yuan, it is quite competitive among these models.

"With this pricing, monthly sales exceeding a thousand units is no problem. You're leaving me no way to survive, you little brat."

The three-hour press conference was well-prepared by the staff of Weilai, and the response from the audience and the live broadcast was positive, making it a relatively successful event.

After the speech, the staff are also responsible for wrapping up the work.

Tan Jincheng then took the boatman and others to a hotel for a late-night snack. The boatman had no words to express his grievances about the pricing of the ES8.

"Currently, only your two companies can achieve this price; other manufacturers really can't."

Geely is also preparing to focus on new energy vehicles, and the performance of its two major competitors has put him under increasing pressure, especially the W11, whose performance, whether in the low-end or high-end market, is astonishing.

BYD's Dynasty series is already taking shape, and with the launch of the ES8, we can also get a glimpse of the future of the ES series.

Is it profitable to sell an ES8 for over 40 yuan?
Judging from the introduction and the sample vehicles they saw, if it were in the hands of other manufacturers, they would suffer huge losses.

But when it comes to BYD or Weilai, they can actually make money.

In terms of subsidies, Weilai can receive the highest subsidies for power batteries among both whole vehicles and parts, and these two subsidies alone are enough to cover most of the costs.

In addition, Weilai's supply chain system is also excellent. Parts suppliers in the Yangtze River Delta region all want to be its suppliers. In terms of transportation costs, it also has an advantage over other manufacturers.

Old Wei from Great Wall said with a wry smile, "Most of President Tan's supply chain is even concentrated in the North Warehouse. Who can compare to its transportation capacity and efficiency?"

"You can't say that, we have other production bases."

"Give me a break. Your largest production capacity is in Ningbo and Luzhou. Those two places practically treat you like their own son. In terms of cost, who can beat you?"

"Please stop complaining, everyone. I'd like to offer you all a toast. Also, if any of you want to purchase power batteries, I can try my best to offer the biggest discounts. Rest assured, our Xuanwu batteries are definitely better than Uncle Wang's."

"Shut up, I can't be your uncle."

"Haha, Lao Wang has met his match. But Xiao Tan, what would you do if I said I wanted to establish a joint venture with you on battery technology, instead of just purchasing from you?"

There were only five people in the private room: the leaders of the top five independent brands, and these five people had eight hundred different thoughts.

The question was raised by Geely, whose ambitions in new energy vehicles are equally ambitious. Mr. Yin from Chery was a little slower to react, but he had the same idea. When Mr. Li asked the question, he was also staring at Tan Jincheng.

Tan Jincheng smiled and put down his wine glass.

"No problem. Mr. Li, the joint venture you mentioned is to build a factory to produce power battery packs, right? Weilai has always been open to cooperation with our peers, so we can cooperate with anyone here or any other manufacturer to build a factory."

"As you probably know, our product line is rather limited. Apart from SUVs, we don't have many sedans. This is where our strategy comes in."

"Oh? Tell me."

"It's very simple. I definitely can't beat you guys when it comes to complete vehicles. I'm only making cars to promote power batteries."

"We are a vehicle manufacturer, but our goal is to become a power battery supplier. Vehicles are just an embellishment to our power battery business."

Whether they believed Tan Jincheng's so-called strategy or not, they were all speechless, except for Wei from Great Wall.

"Have some shame! Your sales this year are second among domestic brands. You're saying your whole vehicle business can't beat ours?"

"That's right. Your profit per bike far exceeds ours. We can't compete with you in terms of sales volume or earning power. Aren't you just slapping us in the face by saying that?"

Tan Jincheng shook his head: "It's different. That's just because you haven't put in the effort yet. Our market space is limited. How can we expect to see a growth rate of over 50% for SUVs every year?"

“Wei Lai does have the ambition to achieve annual sales of one million, but you certainly wouldn’t believe me if I said that we would not be able to achieve this goal for at least five years, or even that this year is our sales peak.”

"Uncle Wang understands this better than I do."

"Haha, you little rascal, watch your mouth. You're great in every way, but your mouth is just too foul. You can't do that in front of the media."

"I'm telling the truth. It would probably take us four or five years to reach an annual sales volume of over one million. While we are expanding, we also need to be prepared for some production capacity risks."

The dream of domestic brands to achieve a million sales volume seems to be only realized when the new energy vehicle market truly takes off in 2020. The annual sales volume of a million that major manufacturers have been shouting about before is just a slogan.

"That's true, Xiao Tan. You're still very clear-headed, unlike Lao Wang."

SUV sales grew by more than 50% throughout the year, but this situation cannot occur every year. Sales of new energy vehicles this year are almost double that of last year, but even with the most optimistic outlook, they are still only around 500,000 to 600,000 vehicles.

This is still global sales, and the share allocated to each company is very small, so it will not have much impact on the overall sales.

“You guys have a much deeper understanding of the industry than I do. I’m at best a dark horse. I might perform well at a certain point in time, but overall I can’t compare to you guys.”

Which of the major domestic brands didn't come through the bloody storms of the past? The environment at the beginning of the century was very different from now. Even BYD, which was the last to start making complete vehicles, almost faced the risk of dying right from the start.

No matter what industry you're in, survival is the hardest thing. Since its listing, Weilai has not encountered as many setbacks as they have, which has led to a less stable morale among the company's employees.

This is why Tan Jincheng has always been very cautious about sales targets.

"Old Wang, I'm the one being teased today. I really didn't expect Xiao Tan to develop so fast. Back then, when this kid said he wanted to enter the new energy industry, I thought he was just talking nonsense."

"That's because you don't understand me, Uncle. Actually, we did a lot of preparation before we officially started manufacturing cars, okay?"

"We have made many arrangements, both in terms of batteries and component suppliers."

"That's true. Look back at his approach: using FlashCar to make money, and then taking advantage of FlashCar's IPO to acquire Changfeng Motor. The assets that were spun off were a burden for Changfeng, but they were useful to him."

Obtaining automobile production qualifications from Yangzi Automobile, the two major vehicle manufacturing bases in Xiangcheng and Chuzhou may not be considered large industries for large enterprises, but they are still very useful for car companies that are just starting out.

Changfeng's problem isn't a lack of technology, but rather a lack of ability to integrate technology or a lack of emphasis on technology. In a market with a severe imbalance between supply and demand, as long as you solve the quality issues of your vehicles and come up with some marketing strategies, you won't have trouble selling them.

"It can be considered a result of years of accumulated experience. However, Xiaotan has good integration capabilities, which is why it was able to develop rapidly. In this respect, Xiaomi is quite similar to you."

What are the starting points for Wei Lai?
Having nothing but its integration capabilities, it acquired what it wanted through mergers and acquisitions, and through its integration capabilities, it reached a new cooperation agreement with Mitsubishi, securing the most important engine supply contract for gasoline vehicles.

He also reached cooperation agreements with companies such as Foton, BAIC, and Dongfeng, and then used money to pave the way, using short-term payment agreements to get major parts suppliers to produce parts according to his requirements.

"Xiao Tan's way of breaking the deadlock is indeed quite good, but unfortunately we can't learn it even if we want to."

“Your methods are already fixed, and it is indeed quite difficult to change them.”

Boatman's factory doesn't have many particularly advanced equipment, and it mainly relies on manpower. The payment method is also outrageous. If it really needs to be changed, Dizi will have to suffer another heavy loss.

To put it bluntly, whatever this thing looks like at the beginning is what it will become in the end. Even if you are the founder of the company and want to change it, it is not so easy.

Unless you're planning a major overhaul of the company.

Saturday, October 11.

The Guangzhou Auto Show has officially opened.

As soon as Tan Jincheng, who was wearing a work badge and attending the opening event, entered the exhibition area, he was surrounded by a group of reporters.

Last night's NIO Day generated a huge amount of traffic, and it was still trending on social media this morning, featuring top male and female singers, the hottest male actor of the year, and countless fans' idols.

There are also some well-known bands; in terms of guest performers alone, Wei Lai has really gone all out this time.

"Mr. Tan, could you talk about the positioning of the ES8? At over 40 yuan, it's not cheap." "Mr. Tan, what are your sales expectations for the ES8 after its launch? And do you have a plan for the ES8's launch and pre-sales?"

"Mr. Tan, I saw your wife at NIO Day last night. Why didn't I see her today? Does this appearance mean that Mr. Gu is preparing for a comeback?"

One question after another was thrown out, and a large group of reporters surrounded Tan Jincheng.

"Let's take it one step at a time. First, let's answer the question about the positioning of the Weilai ES8. It's about bringing down the price of luxury cars so that everyone can enjoy the driving experience of luxury cars at a lower price. We also welcome all journalists to our Weilai booth area for a test drive."

"Of course, please don't forget our Lotus series. In terms of ultra-luxury sports cars, Lotus's pricing isn't that high."

A toy costing 130 million yuan, and with its unique personality, is quite a good deal, especially given the current surge in sales of luxury car brands.

Lotus's domestic orders are already booked until February next year. Kimberly will also be involved in some promotions during his trip to China. In addition, Lotus will also be doing some giveaway activities as the New Year approaches.

This includes existing car owners and those who have pre-ordered and locked in their orders.

Mr. Tan made a striking first move, bringing down the prices of luxury car brands with a single sentence, which stunned the reporters and onlookers present.

This year's Guangzhou Auto Show can be described as a luxury brand auto show, with international luxury brands such as BMW, Mercedes-Benz, Audi, Porsche, Acura, and Lexus all launching their new models.

The Cayenne is selling so well, which luxury brand wouldn't want a piece of the pie?

Mr. Tan's statement that he had brought down the prices of luxury car brands was quite unexpected for the onlookers, and the reporters' eyes lit up. Wasn't this a ready-made topic?

"Does Mr. Tan mean that the newly released ES8 is targeting luxury brands as its main competitors?"

How could Tan Jincheng not understand the reporters' desire to stir up trouble?

"That's right. In my opinion, the Audi Q7, Mercedes-Benz G-Class, and BMW 6 Series are all excellent. The only drawback is that they are too expensive, which prevents consumers who really want to have a luxury brand driving experience from feeling happy."

“In terms of brand awareness, we can’t compare with these predecessors, but that doesn’t mean we don’t have a high-end mindset. At the same time, in my opinion, high-end doesn’t mean high price.”

The idea that high-end doesn't necessarily mean high price is quite novel these days.

However, the reporters didn't care about any of that; as long as they had enough topics to cover, they didn't care whether Boss Tan was bragging or not.

"Entrepreneurs often set small goals these days, so I'll set one too."

"Weilai ES8 aims to be the best family SUV under 100 million yuan."

Sigh, Tan Jincheng wanted to boast about the best family SUV under 500 million yuan, but ultimately he didn't have the thick skin of Li Xiang and Da Zui, so he just couldn't bring himself to say it. 100 million yuan is barely an achievable goal.

"So, Mr. Tan, what are your expectations for the monthly sales of the ES8?"

The average monthly sales of several new energy vehicles from Weilai are quite good. The ES6 can sell around 1500 units per month on average, and the Aion series sells around 3000 units per month. However, everyone knows that this is not the limit for these two models.

With the boom in new energy vehicles and the rise of ride-hailing services, the Aion series, which targets the low-end market, can achieve monthly sales exceeding 10,000 units according to professional assessments.

With continuous updates and upgrades, as well as OTA updates, it should only be a matter of time before the ES6's monthly sales exceed 5,000 units.

This car is still very competitive.

However, it's hard to say what the monthly sales volume of cars with a guide price of over 40 yuan will be, especially for domestic brands like Weilai, which have only been established for less than ten years.

"Let's set a sales target of over 1,000 units per month for now. We also hope that consumers who like the Weilai brand will give us some support. We don't have the heritage of a luxury brand, but we have the determination to become one."

"Mr. Tan, what's your opinion on the online claim that Weilai brand cars are getting more and more expensive?"

The launch of the ES8 was not without its challenges, particularly regarding its pricing.

No matter how much hype they put on it, they can't hide the rising prices. The first model was just over three yuan, and the second model was over four yuan. Will it get more and more expensive in the future?

This raises suspicions of exploiting people.

From a design perspective, the WILAY ES8 continues WILAY's family design. Although it has many highlights in aspects such as headlights and fastback, it is essentially an enlarged version of the ES6.

There are also many nitpicking consumers, media outlets, and peers, and Tan Jincheng has noticed these comments that are seen as exploitative.

"No, how could there be such a misunderstanding? I've said before that Weilai aims to make products with high cost-performance ratios, and that's the philosophy behind my company."

"The ES8 is indeed priced higher than the ES6, but in terms of luxury, I dare say it's the best among domestic cars. I don't think any of you would disagree with that, would you?"

"The price is indeed a bit high, but it's really worth it; however, you can rest assured that we don't engage in any exploitative practices. We will also launch new models with lower prices in the future to try to ease the financial burden on consumers."

"This includes our ET series. We will be releasing some new car plans after the New Year, and we would appreciate your help in promoting them."

"In addition, our Aion series is also very affordable. With subsidies and such, it will probably cost around 10 yuan. That price is unbeatable, right? If you think our Weilai Dilie is a bit too expensive, you can also choose our Aion series."

"Of course, there's also the Yuechi series, which is currently selling very well in the market. These are all good choices. Weilai is our high-end sub-brand, and its price will definitely be higher than other brands. This is also our driving force."

"The idea that Wei is here to fleece consumers is utter nonsense. Where else can you buy BBA quality for less than 40 yuan? We are the conscience of domestic brands."

Whether domestic products are truly of high quality or not, the reporters don't know, but they do know that Boss Tan is good at boasting.

They've brought down the prices of luxury cars, created the best family SUV under 100 million yuan, and made it a truly conscientious domestic brand. This boast is enough to make other car company executives sweat.

But this is good too; if the founder himself comes forward to boast, the click rate will be off the charts.

"Weilai is almost certain to be the second best-selling domestic brand this year. I wonder what Mr. Tan's plans are for next year? Also, as a leader in the new energy vehicle industry, has Mr. Tan ever thought about becoming the top domestic brand?"

"You're stirring things up a bit. I had a late-night snack with President Wei, President Yin, President Li, and President Wang last night. They are all my seniors, and we at Weilai have always respected our seniors very much."

"As for whether I have any ambitions to become the leader, haha; not yet. Besides, my position as the leader in the new energy vehicle industry is somewhat undeserved, as competitors like Toyota and Tesla are very strong."

Tesla remains the world's number one in single-vehicle sales; its leading position is merely due to its overall sales volume.

The US is developing rapidly, and so is Tesla. A single new energy vehicle is enough to support a company, and its market value is rising steadily. This is the true leader in the new energy vehicle industry.

Although everyone is in a different capital environment, these are not enough to justify it.

We'll talk about it when our sales per vehicle surpass Tesla's.

Reporters need traffic, and so do Wei Lai and Lotus. During the exhibition, apart from interviews with Tan Jincheng which would be selective, they answered most of the questions asked on-site. Tan Jincheng also made the same request to Li Xiang and his team.

Go ahead and brag about whatever you want, as long as it's not too outrageous.

This was the first time that Wei Lai's senior management had received such an instruction from the boss; in the past, the boss had always told them to keep a low profile.

"The environment is different now. Look at how the media has changed. If you don't come up with something creative, you really won't get any traffic."

Traditional media is gradually declining, while internet media is gradually taking the lead.

What internet media wants is buzz. Only with buzz can there be traffic. Your formal statements can no longer touch netizens' hearts.

"Weilai's sales have been booming this year, but this kind of sales is only temporary. If we can maintain annual sales of 50 vehicles for a long time to come, we will be successful. So we must seize this opportunity this year."

"We will strive to take December sales to the next level. Everyone will work together and the public relations department will be ready to respond at any time."

Zhang Yong was in charge of promoting the Yuechi series, Li Xiang and Kimberly were in charge of Lotus, and Tan Jincheng himself was in charge of the marketing and promotion of the Weilai series, as well as the Aion series.

Didi and Uber have been battling it out for almost a year. Uber has been repeatedly undermined, and despite investing heavily, it has failed to gain the market share it wanted. It seems that they will have to prepare for a merger and try to find an alternative strategy.

It's quite funny, actually. Baidu, which was eliminated in the first round of the ride-hailing war, chose Uber again in this round of financing between the two companies.

However, after the merger, they were indirectly involved.

This year can be considered a year of great victory for Tencent. The ride-hailing service indirectly kicked Alibaba and Baidu out of the market, and the food delivery market directly forced AliPay into a vacuum period. Baidu's Nuomi also had to invest heavily to deal with it.

At the Guangzhou International Auto Show, Lotus's booth was separate, but connected to Weilai's booth, which was significantly larger this time.

"Wow, back when we first participated in the exhibition, we didn't even have a car. We brought a Serena sports car to make up the numbers. I never thought we would have such a large scale now."

The independent sub-brand Lotus has four sub-series: the Yuechi series, the Tank series, the Aion series, and the Weilai series. These four sub-series alone make up a full range of products.

"That's right, now we're not being laughed at for just paying to make up the numbers anymore."

Zhang Yong has a deep understanding of this; he was indeed a bit embarrassed when he participated in the exhibition for the first time.

(End of this chapter)