2003: Starting with Foreign Trade

Chapter 854 "The Fate of a Million Canal Workers"

"It's not just those underlying factors; the price reduction is actually based on a variety of considerations."

The price reduction of Weilai's flagship model is not something that can be done so casually; it's just a series of interconnected steps.

As early as the first regular meeting in 2016, the internal strategy of demoting officials this year was determined by Wei Lai, the reason being nothing more than the intensity of competition.

In just two months, dozens of SUVs have emerged on the market. Even Didi has increased its investment in the SUV market. The Landwind X7, launched in August, which closely imitates the Range Rover Evoque, received more than 10,000 orders within half a month of its launch.

Within four months of its launch, the vehicle had accumulated as many as 40,000 orders. The booming sales angered Land Rover, which sent multiple warning letters because it looked too much like the Evoque. If you weren't paying attention on the main road, you couldn't tell the difference.

However, warnings are definitely useless. With such hot sales, how could a few warning letters possibly lead to a complete halt in production and sales?

Even if Land Rover has already started preparing for a lawsuit, it is impossible for them to stop selling the product. Such infringement lawsuits are very complicated and it is normal for them to last for several years. After a few years, these copycat and imitative models will have long since disappeared from the market.

To put it bluntly, they're taking advantage of the booming SUV market and the imbalance between supply and demand to make a quick buck. In addition to Lufeng, Zhongtai's amazing product will also be launched this year, and the once-famous Porsche Tai is about to take center stage.

"I'm already feeling the pressure before I've even started. The automotive industry is really a deep and murky place."

The market effect of price reductions for top-selling products is immeasurable. The price reduction by Wei Lai was implemented from the early morning of January 9, 2016. Before that, apart from a slight indication in Tan Jincheng's comment on Weibo in response to a netizen's question, there was no news.

The existing models on the market are fine; they just don't need to lower their prices. However, the situation is a bit awkward for competing models that have announced their prices but haven't officially gone on sale yet.

Every industry has the habit of benchmarking against leading products. If the Yuechi A1 sells well, it will become the benchmark for newly developed SUVs, whether in terms of configuration or price.

A surprise price cut is actually a marketing strategy.

Technical research and development, quality, and after-sales service are the guarantees of reputation, but ultimately marketing is the guarantee of sales. Regardless of whether the reputation gained through marketing is good or bad, there are a lot of real benefits.

Take Flash's partners as an example; their marketing methods are particularly effective, making the brand image deeply rooted in people's minds.

"Boss, please sign these documents."

Zhao Xinyi rushed over with several documents for Tan Jincheng to sign. These included the year-end bonus distribution plan formulated by the finance department, the approval for this year's marketing expenses, and a preliminary financial report of Weilai Group for 2015.

Most of them are related to money.

In addition, there is the recruitment plan for this year. With a sales target of 80 vehicles, the current number of employees is definitely a bit tight, so a new batch of recruitment plans will definitely need to be put into the plan.

Currently, Weilai Automobile has four major production bases: Ningbo, Luzhou, Chuzhou, and Xiangcheng, with Ningbo and Luzhou being the two main production bases.

After several years of adjustments, the Xiangcheng production base mainly produces Tank 300 trucks, Chuzhou is a pickup truck base, Luzhou mainly produces Aion and Weilai series trucks, and the main base mainly produces several models of the Yuechi series.

Sales in 2015 exceeded expectations by more than 35%, which speaks volumes about the actual tightness of production capacity. Compared to previous years, Weilai's capacity utilization rate exceeded 100% in 2015.

A year-end bonus of 10 billion yuan is certainly a lot for a real economy company in 2015, but there must be a reason why this matter was brought up at the executive meeting. Everyone has seen how hard the employees of Weilai have worked this year.

Any company must be extremely cautious about its expansion pace, otherwise it may end up like BYD back then, except that now it has reached the point where it has no choice but to expand.

Otherwise, it's not even a question of whether the latest sales target of 80 can be achieved.

"By the way, what was your employee number at Flashpoint back then?"

There were no problems with the financial review and signature submitted by Zhao Xinyi, but Tan Jincheng was still a little alarmed by the employee recruitment plan from the human resources department.

In previous years, major companies would make specific employee recruitment plans at the beginning of the year based on changes in orders and social needs. However, the maximum increase in employees in the past was no more than 15% per year. This time, however, it is different.

Zhao Xinyi blinked: "I can't remember, anyway, there didn't seem to be many of us back then."

She must have read the employee recruitment plan report beforehand and roughly understood why the boss was asking her.

Having worked for the boss for so many years, Zhao Xinyi believes that the boss is a very practical businessman who never expands recklessly for the sake of appearances or boasts about how many employees he has.

Take Flash Technology, a listed company, as an example. With its main business stable, the number of employees has hardly changed from year to year. There are new recruitment plans, but at the same time there are also personnel optimization plans.

To put it bluntly, for every new person hired, a group of older employees will be laid off to ensure company staff stability and reduce unnecessary financial expenditures.

The boss also faced some pressure as a result.

“My original idea was to own a factory with about a thousand employees, make a stable profit every year, and then I could relax. Who knew that it would turn into such a behemoth? Once this plan is implemented, we will be responsible for the livelihood of 100,000 workers.”

In developed coastal cities, a company with around a thousand workers can barely be considered a medium-sized enterprise. The local government won't neglect it, but it also won't attract the covetousness of some people. To put it bluntly, they look down on it, and these are indeed the people who live a relatively comfortable life.

The boss's words were quite amusing, and they immediately made Zhao Xinyi laugh: "How so? Boss, you are definitely a millionaire."

It might be an exaggeration to say that there are millions of workers in the entire "FlashCar" industrial chain, but their influence is far more than that.

Taking Beicang District and the boss's hometown as examples, nearly one-third of the urban population in these two districts and counties is directly or indirectly affected by the two major groups, Shanchi and Weilai.

The situation is even more exaggerated in Langya District of Chuzhou, where Yangzi Motors' influence is at least half.

A joke has been circulating in Beicang District recently: Wei Lai's year-end bonus caused the entire ShangK system to raise prices. The young ladies even decided to stay home later for the Chinese New Year, just to wait for Wei Lai's employee year-end bonus.

Currently, Weilai has approximately 5.9 employees. According to the Human Resources Department's plan, by 2017, Weilai plans to recruit 6.38 new employees, including 2800 managers and 2000 R&D personnel.

The 2000 R&D personnel listed separately here are clearly not just a simple, unrelated number; they are mainly doctoral and master's degree holders, with 110 doctoral degree holders planned for recruitment.

This recruitment of 2000 people can be considered a talent introduction program, primarily serving the power battery business segment.

"Take it to the human resources department and tell them to implement it as soon as possible."

Tan Jincheng signed the largest recruitment plan since the establishment of Weilai. If successfully implemented, it would mean that by 2017, the number of Weilai's direct subordinates would directly exceed 10.

100,000 people! According to the latest data we have, as of December 2015, there were approximately 74 companies nationwide with more than 100,000 employees. Most of them are central and state-owned enterprises, and emerging companies include SF Express, Huawei, and Jingdong, among others.

As for the automotive industry, the companies with the most employees are still the same few large state-owned enterprises and central enterprises. Among domestic brands, Dizi currently has the most employees, but it does not exceed 10.

"Hehe, boss, are you having a headache? Let's just talk about Wei Lai. From now on, every time you open your eyes, you'll be owing wages to more than 10 people."

This employee recruitment plan is very important to Wei Lai, and it has also generated a significant response in society.

As one of the fastest-growing independent brands in recent years, Weilai's business system is described as a combination of Great Wall and BYD, achieving rapid development through its technological accumulation, quality service, marketing, financing and mergers and acquisitions.

Both automobile manufacturing and power battery systems are industries with large cash flow. A model that sells well can be a concern, but it can also be an advantage, as it allows you to focus your efforts on bigger projects.

"Stop being so glib. Let's approve this R&D funding plan as well."

尉来整体的研发费用目前大致在4%到5%之间，2015年营收爆增的同时也意味着2016年研发经费可以进一步提升，根据初略的营收来计算，尉来2016年研发经费在30亿元至35亿元之间。

They earned a lot but also spent a lot. A year-end bonus and a 2016 R&D funding approval wiped out more than half of their 2015 net profit.

Of the more than 3 billion yuan invested in R&D, about 200 to 300 million yuan is allocated to power batteries, which is also planned according to the revenue ratio.

Currently, the biggest investment in the power battery business is still in infrastructure construction. 2015 was the first year of new energy vehicles, and it can also be considered the first year of power batteries. Unlike traditional energy, power batteries, like new energy vehicles, can only be considered an expectation for the time being.

Therefore, the funding for technology investment will not be particularly high.

On January 14, Uber China announced the completion of its Series B financing round, raising $2 billion. Investors included HNA Capital, Vanke, Minsheng Bank, Baidu, and Weilai Group, among other large enterprises.

The investors involved in Uber's latest round of financing have attracted much attention. In addition to Baidu, which has been investing in the company, the investors all have strong backgrounds. The entry of Weilai Group was somewhat unexpected.

Previously, Tan Jincheng made investments using the guise of ByteDance's advertising platform, ByteDance Engine, rather than the actual company.

"This investment is actually the same as FlashTech's investment in Meituan. In principle, we still want to sell more cars."

I invested $100 million in Uber, of which $48 million was calculated using 5000 Aion series cars. In an era of severe inflation, it was still quite worthwhile.

Didi's shareholding is a legacy issue. Starting with Meituan, Tan Jincheng has always planned to use the company as the main entity to invest in any business that has a direct business relationship with the company.

Most importantly, the investment is made through the listed company, so the investor doesn't need to put up his own money.

If a company is already listed on the stock exchange, it would be unprofessional for it to use money from its own investment company to invest in other businesses with business needs. The major shareholder shouldn't have to handle everything.

Of course, Tan Jincheng will still use the ByteDance engine as a front for equity investments. For example, regarding Ning Wang's shares, although Ning Wang's development has not been as smooth as in its previous life after Tan Jincheng stole its fortune, Ning Wang, which has developed in an emerging market and is backed by Xiao Rizi Capital and American technology, is still not to be underestimated.

Similar to his previous life, after moving the company to his hometown, the founder of Ningwang began to separate from the original major shareholders of Xiao Rijia.

TDK, a giant in the electromagnetic field, has never been optimistic about the development of power batteries, which is one of the reasons why they want to sell Ningwang shares. As a major automobile country in the world, Ningwang has always been unclear about the prospects of new energy vehicles.

This isn't entirely wrong. In fact, even in 2023, the year of the explosive growth of new energy vehicles, their share of the global market was still only a minority.

Despite the booming development of new energy vehicles in China, their sales share is only around 30%.

It's understandable that Xiaolai is unwilling to give up its existing profits because traditional gasoline vehicles are selling well, and it will not give up the market for traditional gasoline vehicles in the future.

Tan Jincheng got in touch with Li Hua, one of the founders of Ningwang, through a CEIBS EMBA class. Through Li Hua's matchmaking, Tan Jincheng was able to acquire Ningwang shares, which he had been eyeing for a long time.

The 15% stake in Ningwang shares cost only 89 million yuan, which is incredibly cheap. This investment was completed in 2015 and was one of the several investments that Tan Jincheng personally participated in that year.

It attracted quite a bit of attention at the time.

Tan Jincheng's explanation was also quite formal. His investment strategy is actually based on the internet model: "If I'm interested in a company, I'll invest in it as long as they're willing. What if it develops into a successful business?"
However, for Prince Ning, Tan Jincheng's ambitions went beyond just investment.

In 2015, the global power battery market was still dominated by Panasonic, AESC, and LG Chem. Even after losing Tesla as a customer, Panasonic still held a 38% market share in global power battery installations, maintaining its leading position.

Weilai's power battery industry has developed rapidly. With the surge in sales of Tesla and its own new energy vehicles, its market share has risen to 13.75%, surpassing BYD to rank fourth globally and first in China.

When it went public in 2014, the capital market touted Weilai as the leader in China's new energy industry, which was somewhat exaggerated. However, after its rapid development in 2015, Weilai officially took over the leading position from BYD.

However, the gap between the two sides is not large at present. Weilai New Energy Vehicles sells well, and BYD also sells well. In addition, their years of customer accumulation is also a major advantage.

Investing in Ningwang was another of Tan Jincheng's backup plans.

In January 2016, Weilai made quite a splash in both sales and the investment market, but its performance in the secondary market was not as good as expected.

Two circuit breakers brought market sentiment to a freezing point. From the 4th to the 14th, in the nine trading days of the new year, the Shanghai Composite Index plummeted by 15.02%, falling to a low of 2867.55 points today, and the topic of market rescue has been raised again.

The share price of Weilai Co., Ltd. also hit a low of 90.09 yuan today, the lowest since last year's National Day holiday, showing a sluggish performance.

"These institutions are hilarious, they're just trying to scam you out of chips."

It's quite funny, really. The reason for Weilai's sluggish stock price is still the price reduction at the beginning of the month. Institutions interpreted this price reduction through the media as a negative factor, believing that it would lead to a significant decline in Weilai's net profit in 2016.

You might say he's being unreasonable, and there's some truth to that. Price reductions certainly mean lower profit margins, but using that to interpret the sharp decline in Weilai's net profit in 2016 is a bit of a stretch.

However, this logic is perfectly fine for fooling clueless newbies.

"Was today's rebound orchestrated by the national team?"

Today's rebound was quite strong, with the market rising sharply from a low of 2867.55 points in the morning's opening auction to above 3000 points. Only the national team's intervention could produce such a situation.

"I think so. Our stock closed up more than 2% at the end of the day, which is not bad."

Tan Jincheng attended Uber's financing press conference. He was brought there by Li Dashuai, which can be considered as him supporting Uber. The contract had actually been signed long ago.

Of the $2 billion in funding, he only invested $100 million, and the remainder was converted into cash in kind. Normally, that amount wouldn't even be enough to be considered. If it weren't for Lao Li's invitation, he really wouldn't have bothered to come.

That said, this was his first time meeting Uber's management. It seems they haven't given up yet. Despite suffering heavy losses in the Zhongguo region, they still seem to want to fight one more time.

It's unclear how long they can burn through that $20 billion.

Hehe, Tan Jincheng knows that Didi is also raising funds, and the scale of the fundraising is no less than that of Uber this time. The initial plan is to raise 30 billion US dollars.

As for the investors, it's simple: China Investment Corporation (CIC) and BAIC Industrial Investment Fund.

Uber has deep connections, and Didi is no less so. Just look at the names of its two major shareholders: China Investment Corporation (CIC) goes without saying, and BAIC Industry Fund is no ordinary company either. Just search online for the names of its subsidiaries and you'll understand.

The ride-hailing subsidy war has escalated to this point, making Tan Jincheng somewhat alarmed. Too much capital has been involved, to the point that it's practically being manipulated.

After rounds of financing, the management team has very little say in the matter. It's worth noting that Didi's next round of financing is Series F, and it's extremely rare for an internet company to reach Series F without going public.

However, it was this round of participation that made Tan Jincheng realize that although ByteDance has its own reputation in the capital field and has invested in many companies, it is still a nobody in the face of real capital.

"Forget it, let's go back and tighten our screws. We can't keep playing with this thing any longer."

The initial investment was 10 billion US dollars, and each participant had a powerful background.

To put it bluntly, if it weren't for the convenience of selling a few more cars, and the fact that Gaode's development also requires these ride-hailing companies, he would genuinely want to transfer his shares, even if it were just for free.

Stay away from this place of right and wrong.

It's a bit of a pity that he can't transfer his shares for the time being, but these people seem to welcome his joining.

"When an industry develops to a certain stage, there really is a sense of powerlessness."

After returning from the capital, Tan Jincheng invited Zhang Xupeng to his home for drinks. Zhang Xupeng seemed to sense that Tan Jincheng was preoccupied, and he didn't seem particularly happy when talking to his good friend about Wei Lai's large-scale personnel expansion plan.

Tan Jincheng replied with that sentence, and Zhang Xupeng understood.

"It's alright, let's work hard and there won't be any problems. Let's reduce the investments in the future, anyway, we have more money than we can spend in several lifetimes."

Zhang Xupeng is now a father; like Tan Jincheng, he also has a son.

A man's state of mind can be roughly divided into three stages: the first stage is when he is single, the second stage is after he gets married, and the third stage is after he becomes a father. Each stage has its own characteristics.

"Speaking of which, Meituan is about to raise funds. Wang Xin informed me that they are preparing to raise 33 billion US dollars this time, and our shares will start to be diluted."

“I know, he called me too, and I agreed.”

This round of financing for Meituan can actually be understood as a private placement by Tencent. Tencent probably wants to acquire 20% of Meituan's shares. Wang Xin and Pony Ma have both expressed their intentions. Tan Jincheng can also participate, but he certainly won't get a large share.

After thinking it over, Tan Jincheng decided against it. After this round of financing, Meituan's valuation had exceeded 160 billion US dollars. Although there was profit to be made before the IPO, Tan Jincheng still did not want to make too much investment considering the future reputation of these local service companies.

Having fewer shares is fine; isn't it better to quietly make a fortune while remaining out of the public eye?

The specific amount and Tencent's shareholding have not yet been determined, but Wang Xin probably disagrees with 20% and his words suggest that he wants to keep it below 19%.

Pony Ma is indeed a very interesting person; he's really willing to spend money on the companies he sets his sights on.

He couldn't remember exactly when the group went public, but he believed that the shares he held in FlashTech should have been able to be cashed out before the IPO. As the rounds of financing led to a larger and larger share capital, there must have been a buyback process before the IPO.

This is also the usual practice and routine of internet companies; not all capital or individuals want to wait until the IPO.

February 2, 2016, the 2th day of the twelfth lunar month, is the traditional Little New Year in southern China.

On this day, the various industrial bases in Weilai were packed with people, and the walls of cash on site were particularly eye-catching in their bright red.

"How long will this take? I'm starting to regret doing something so extravagant."

When a boss distributes bonuses to employees, he has to be present. Tan Jincheng chose to distribute the bonuses to employees at Chunxiao Industrial Park, but now he's a little worried.

Showing off comes at a price.

"Haha, it'll probably take a few hours to send. Did you have a big breakfast this morning, boss?"

"What are you laughing at? You have to post it too, and you're even wearing high heels."

Zhao Xinyi, the assistant standing to the side, was a little gloating, but Tan Jincheng shut her up with just one sentence.

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(End of this chapter)