2003: Starting with Foreign Trade

Chapter 856 A vast market with great potential!
PS: This chapter is a transitional chapter.

The issue of fraudulent vehicle sales has always been a topic that cannot be ignored.

"Those who are familiar with the automotive industry know that once a car is released, its sales will follow a gradual pattern, rather than experiencing a sudden surge."

From the moment a product is launched, whether it's a new model or a facelift, automakers will have a general idea of ​​whether it will be accepted by the market for a period of time. However, in a market that is not particularly standardized, this data may be distorted.

But by 2016, terms like big data and cloud computing were no longer new, and collecting specific data on a particular car model was not a difficult task for companies.

The Yuechi A1 was born in an era when the domestic SUV market was almost in its infancy. Its independent design, good quality, and excellent service were the prerequisites for its popularity, but its sales did not grow too fast in the early stages.

The real breakthrough came in 2015, during the period of market explosion after a good brand image was established.

After the Yuechi A1 broke the monthly sales record of 40,000 units for the first time in November 2015, and then increased that record by several thousand units in December, the pressure on the Yuechi A1 also came, and lowering the price was the best way to achieve this.

January is not a traditional peak sales season. Although there are factors such as price reductions and promotions, Weilai did not expect the sales volume of A1 to be too high. The internal expectation was around 3.7 to 3.8 units.

However, judging from the market feedback that has already concluded, the data from Weilai is still somewhat conservative.

The Yuechi A1's sales exceeded 40,000 units again in January, marking the third consecutive month with sales exceeding 40,000 units, and the total monthly sales exceeded 71,200 units.

In addition to the continued strong performance of the Yuechi series, the growth in new energy vehicles is also encouraging. In January, the monthly sales of Weilai new energy vehicles exceeded 8000 units for the first time, not including the 5000 units ordered by Uber.

B-end customers have increasing consumption potential. After Uber announced its financing and Didi announced its financing, orders for the Aion series gradually increased.

In addition, the ES8 has started pre-sales and will begin deliveries during the Beijing Auto Show in April.

"You also need to pay attention to the battery orders here, screen the car companies, and immediately stop new orders if you find anything wrong."

The main focus of the inspection at the Luzhou factory was the power battery plant. Zhang Xuhui, who has been in charge of the work in Luzhou for a long time, is becoming more and more impressive. In ten years, Zhang Xuhui has grown from a somewhat arrogant graduate to a management talent with a high reputation in the new energy field.

However, in front of Tan Jincheng, Zhang Xuhui, who was older, was like a younger brother. Zhao Xinyi was also an old acquaintance of his, and they were very friendly when they met.

"Does the boss mean he's worried some OEM manufacturers won't be able to afford it?"

"Yes, you should pay special attention to some emerging forces."

In fact, every year there are car companies that go bankrupt or face bankruptcy. It's just that in the past, the media was not developed enough, and the local government would try to cover it up, so not many people paid attention. For example, a number of car companies were shut down last year.

The entry of new players and the participation of internet companies have greatly increased the exposure of the automotive industry, and the failures of some companies have also been amplified.

Many emerging companies lack operational experience and rely on the same old internet model of spending money to buy data. While it's not entirely useless, it's not very effective in the automotive industry.

New people join every year, but there are also people leaving every year.

“Emerging companies like to use the internet financing model. They have money and marketing capabilities. If they want to raise more funds, rapidly increasing sales is the most effective way, but this often leads to a break in the capital chain.”

"To give a simple example, if a car company was ordering a few hundred battery packs per month on average a few months ago, but suddenly wants to order several thousand, then you should pay attention."

Being a supplier also has its own troubles. The biggest fear is that a host manufacturer will suddenly go bankrupt and you won't be able to get your payment back.

Currently, many large capital firms and cross-industry companies have entered the car manufacturing industry, including Tencent, Alibaba, Sequoia Capital, Gao Ling, Baidu, and Huawei, all of which have made substantial investments. New energy vehicle brands are also being established one after another.

However, as someone who had been through it all, Tan Jincheng knew that far too many of these new forces had gone bankrupt.

Even in their previous lives, Wei Xiaoli was always at risk of going bankrupt. Only Li sold well after it was upgraded and got rid of the risk ahead of time, while Wei Xiaoli was always in the process of losing money.

Zhang Xuhui nodded thoughtfully: "I'll pay attention to this later. I'll optimize the order system again and set up a risk warning. If any companies have abnormal orders, we'll have to pay close attention to them."

The boss has been in the internet industry for many years and is very familiar with the tricks of the trade in internet companies.

He had also been in contact with some internet companies, and it was indeed as the boss said: when it came time to raise funds, they would spare no expense to collect data, and he would probably do the same if they were in the automotive industry.

Once the cash flow is cut off, it becomes difficult to get subsequent payments.

“We currently have advantages in both price and technology, and we have the right to choose suppliers and payment methods. While we won’t squeeze the hosting manufacturers, we can’t let some hosting manufacturers take advantage of us.”

Top-tier suppliers have pricing power and the right to choose payment methods. When Flash Technology and Weilai were first established, they had little bargaining power when cooperating with suppliers, especially top-tier suppliers. In fact, some top-tier suppliers did not want to take their orders.

Some suppliers even require advance payment, because they don't trust the capabilities of small companies.

Luzhou was the last stop on the inspection tour before the New Year, so Tan Jincheng was relatively free and not in a particular hurry. Zhang Xuhui took Tan Jincheng on a good tour of the factory in Luzhou.

Weilai's factory in Luzhou consists of three parts: a self-developed engine factory, a power battery factory, and a new energy vehicle production base. The Aion series is basically produced and assembled in Luzhou.

Zhang Xuhui was in charge of the day-to-day management of the battery business, and the places he took Tan Jincheng to visit were mainly battery factories.

With battery orders increasing, the Luzhou base also has the task of expanding recruitment this year. This year is an expansion year for Weilai. Not only is Tan Jincheng very busy this Spring Festival, but the management team is also very busy. There is not much time to really celebrate the New Year.

The old buddies who started out together at Flashpoint and went through tough times are now all fathers. They've lost some of their passion but gained more composure.

When introducing the battery factory, Zhang Xuhui spoke fluently and eloquently. Judging from the attitude of the grassroots employees, they were quite familiar with Zhang Xuhui, which suggests that he frequently interacts with them.

"Speaking of which, housing prices in Luzhou have been changing daily in the past two years, especially in the Binhu District. Does the company have a plan?"

The housing prices in Luzhou rose abnormally between 2015 and 2016, especially in 2016, when the rate of increase was comparable to that of Shenzhen, ranking among the top four in the country. Tan Jincheng was stunned at the time.

"That's right. The housing prices in Binhu District at the beginning of last year were much higher than at the beginning of this year. The price difference between last month and this month is huge."

Most of Weilai's factories are now located in Binhu District. When they built their factories there, no one wanted the buildings. They were cheap, costing two or three thousand yuan per square meter, but now they have risen to more than ten thousand yuan per square meter.

In Tan Jincheng's memory, the peak housing price in this area should have been close to 30,000 yuan per square meter.
Anyway, it has scammed a lot of people.

"Two years ago, nobody cared about houses in Binhu District. But in the last two years, I don't know how they've been speculating on them. Everyone is proud to own a house in Binhu District. Owning a house in Binhu District is a status symbol. It's unbelievable."

Zhang Xuhui shook his head. There is plenty of land in Binhu District, and many areas where houses can be built. He couldn't say more about who was involved in the hype.

"There are some things we can't say publicly, but the company's cash flow is good right now, and we can build more employee dormitories when the time is right, so that the employees' morale will be more stable."

Luzhou is a rapidly developing city. From its initial focus on home appliances to its current new energy vehicle industry chain, and then to the semiconductor technology industry, it has been able to accurately predict emerging trends, leading to a rapid increase in the city's competitiveness.

However, the living conditions of ordinary workers have not changed much, especially with the rapid rise in housing prices, their lives are becoming increasingly difficult and the pressure is increasing.

The overall income of employees in Weilai is not bad, but it can't keep up with the rise in housing prices in Luzhou. Prices increase every month. Which company can offer salaries at this rate?
"We noticed this problem in the middle and late part of last year. With the increasing number of orders and the need to recruit employees, we started to have this plan at that time and were just waiting for the head office to approve it."

“Okay, then I’ll stay in Luzhou for another day. You can organize all the documents that need to be approved by the head office, and I’ll handle the ones I can.”

"That's great! I was thinking that if you went back today, I wouldn't be able to entertain you. I was even thinking of inviting you to my house."

Zhang Xuhui's wife was his college classmate and is now a university teacher at Anhui University. Originally, the two were just classmates, and if Zhang Xuhui had stayed in Beicang to work, they wouldn't have had much interaction.

However, after Tan Jincheng transferred him back to Luzhou, Zhang Xuhui's connection with his alma mater deepened, and the two gradually became acquainted under these circumstances, until they got married and had children.

"Haha, speaking of which, I haven't even met your child yet. If it's not too much trouble, how about we have dinner together tonight? I'll also give my niece some lucky money."

Zhang Xuhui's daughter was born at the end of 2014. He has never taken her out since she was too young. Tan Jincheng's visits to Luzhou are always for official business, so he has never had a chance to see her.

Gu Qingqing, on the other hand, had met him once or twice.

"Hehe, that's exactly what I've been waiting for. How about I make a call home and ask everyone to come over for a casual meal?"

"I'm fine, Xiao Zhao, what about you?"

"I have no problem with that at all. I'd be happier to have dinner at Mr. Zhang's house. It must be tiring to put on an act with you at the dinner table every day, okay?"

"Alright then, let's go and bother Mr. Zhang at his house for a while, so we can have some peace and quiet."

There's no way to avoid a little leisure time. Zhang Xuhui also owns a house in Binhu District, but because of his wife's work, he usually lives in the staff dormitory of Anhui University. They had just finished eating and hadn't even cleaned up the table when someone knocked on the door.

Zhang Xuhui's wife looked embarrassed when she opened the door. It was her department head, who had arrived right on time. Clearly, Tan Jincheng's car had been noticed as soon as it entered the staff quarters.

"Sorry, boss."

The department head didn't say anything, just offered a routine greeting; being an educated person, he certainly wouldn't show it so obviously.

"It's alright, I understand. It's getting late, so we'll head back now."

It was clearly inconvenient to sit for a while after dinner. Once there was a first, there might be a second. Tan Jincheng understood the ins and outs. It was obvious that Zhang Xuhui's wife had unintentionally or intentionally leaked the information.

Zhang Xuhui was also a little embarrassed. How could he not understand his wife's little scheme? However, he couldn't say anything in front of his boss.

"Don't try that next time. You're not familiar with the boss, and he doesn't like that kind of thing."

"I didn't mean to, but your colleagues in the office heard you on the phone, and then the department head asked me a few questions. Will it affect you?"

Zhang Xuhui shook his head: "It's not that bad, the boss isn't that unreasonable."

Even so, Zhang Xuhui sighed inwardly, knowing that it wouldn't be so easy to invite his boss to his home again next time.

He had nothing to say about his wife's actions. Whether what she said was true or false, in a society based on personal connections, the department head wanted to get to know this big spender from Anhui University, and as long as she was still working in the department, she couldn't refuse.

Over the years, Tan Jincheng has donated a lot of money to universities in Anhui Province, including Yicheng Normal School, which has no connection with his hometown, to which he donated tens of millions of yuan. Several engineering universities in Luzhou have been the focus of his donations.

However, donations definitely have a focus. In the first two years, the focus was on Luzhou University of Technology, but starting in 2015, the focus shifted to Zhongshan University of Science and Technology. A lot of donations were also received from universities in Anhui Province, but they were definitely not the focus.

Most importantly, Tan Jincheng, who originally received an admission notice from Anhui University but did not attend, never publicly promoted his relationship with Anhui University. Instead, he always emphasized that he had a low level of education and limited cultural knowledge.

This makes it difficult for universities in Anhui Province to exert any effort in their recruitment efforts; they can easily gain an advantage by mentioning even a single word about it.

"Really?"

"Really, although I've been working in Luzhou all these years and haven't had much contact with the boss, I still know him quite well. He's not that stingy. He probably left in a hurry because he was worried that other people would come to visit later. He's just afraid of trouble."

The department head's casual greetings and few words were most likely just a way to test the waters.

Of course, the most important thing is that there is nothing wrong with his work and there is nothing wrong with his loyalty to the boss. If these two points are not a problem, the boss will not have any objections to him.

After thinking for a moment, Zhang Xuhui said, "The child is a bit older now. Let's go to Ningbo for the Spring Festival this year. Grandpa and Grandma are there too, so we can bring Mom and Dad over."

He also has a house in Beicang, which is usually unoccupied, but Zhang Guolong and his wife, who have settled in Beicang, will hire someone to clean it for him.

"Is this appropriate?"

“There’s nothing wrong with it. If you go to Beicang for the New Year, you’ll get to know the boss’s personality better. He’s actually quite easy to talk to in private. It’s much better to ask him directly than to play tricks in private.”

As Zhang Xuhui suspected, Tan Jincheng didn't think much of it, but he was still a little uncomfortable about Zhang Xuhui's wife revealing his itinerary, whether she did it intentionally or unintentionally.

Although the factory inspection tour that began on the 24th of the twelfth lunar month was public, and everyone knew that Boss Tan would come to Luzhou, the local government knew that he was handling official business for the company, so no one disturbed him.

Did the Luzhou municipal government not know that he had come to Luzhou? Obviously not. It is safe to say that someone knew as soon as Tan Jincheng entered Luzhou territory. Li Yaohui discovered this a long time ago.

"Boss, we're also going to Beicang for the Chinese New Year this year. We'll come to your house to wish you a Happy New Year then."

While handing the documents to his boss, Zhang Xuhui casually mentioned it.

“Sure, it’s perfect for our families to have a reunion dinner. Your grandparents are over there too. I met them once before I came to Luzhou.”

Like Tan Lihua and his wife, Zhang Guolong and his wife have also retired early and are living a retired life. Zhang Xuhui's parents are the same. It is no longer appropriate for these elders to continue working in their hometown.

Zhang Guolong and his wife now reside in Beicang, where they keep each other company with Tan Lihua and his wife.

Like Tan Lihua, this couple also manages some money and helps their relatives in their hometown start businesses, living a carefree life.

"Yes, it's been a long time since I've seen my uncle and aunt."

After signing several documents in Zhang Xuhui's office, Tan Jincheng strolled around the Weilai factory area for a while.

He arrived in Luzhou on the 26th of the twelfth lunar month. The factory was closed for the holiday today. Although there were still some employees on duty, the entire factory area was relatively quiet.

"Most of the employees here in Luzhou are from the surrounding area, so it's convenient for them to go home. Employees from other cities in the province have also been taken care of."

Tan Jincheng nodded: "You can arrange these things. Our business will continue to expand this year. You must pay close attention to the grassroots employees."

January's sales figures are enough to demonstrate the rapid development of new energy vehicles. In 2015 alone, the sales of just three new energy vehicles—the Aion series and the Weilai ES6—reached 6.83 units.

Including commercial vehicles, the total sales of the new energy vehicle series exceeded 70,000 units.

The sales volume of 100,000 vehicles in 2016, with a growth rate of over 30%, is not just empty talk. According to data from the Weilai Research Institute based on large-scale model statistics, the production capacity of new energy passenger vehicles and commercial vehicles in 2016 was likely to reach 500,000 vehicles.

Weilai's production capacity plan for new energy vehicles this year is 12 to 15 vehicles. Compared with 2015, Weilai's market share has been reduced to a certain extent.

"In my opinion, it is enough for the whole vehicle business to maintain a market share of more than 10% in the new energy vehicle field. The focus is still on power batteries. Our goal for power batteries is very ambitious."

At its peak, Ningwang's market share exceeded 50%, which is a global market share. Even with intensified competition, it was able to maintain a market share of over 30% for a long time. Dizi was also able to maintain a market share of over 10% for a long time.

The market is vast and there's much to be done.

Because of the delay in Luzhou, Tan Jincheng canceled his trip to Suzhou. Although Wang Qinghua was somewhat disappointed, he was still quite happy that Tan Jincheng expressed his support for his plan to go public.

Starting this year, he needs to focus on improving performance in preparation for the IPO.

"Technically speaking, the A-share market has entered a bear market phase. For the time being, it is not a good time to raise funds. My suggestion is to increase customer development efforts in the next two years and improve performance."

The Shanghai Composite Index plummeted by more than 22% in January, and IPOs were suspended again, with no certainty on when they would resume.

Weilai Co., Ltd.'s stock performance in January was mediocre, closing at 91.89 yuan at the end of the month, barely maintaining a market value of around 2000 billion yuan. In February, due to the Chinese New Year, the stock price did not fluctuate much.

Given the current market situation, it's unlikely that they can secure much funding through financing.

"No rush, let's prepare slowly. It's not a big project, it's normal to prepare for a few years."

It's perfectly normal for a company to prepare for an IPO two or three years in advance. Bafang Electric doesn't have a large fundraising scale if it wants to go public, and it's not a star project, so it will definitely wait in line patiently.

In addition, the biggest obstacle to IPOs at this stage is that the business of a single customer accounts for too large a proportion, so it is necessary to speed up the development of new customers.

The journey back to Ningbo was indeed less congested, and Tan Jincheng and his group arrived back in Beicang on the evening of the 27th of the twelfth lunar month.

"Phew, it's finally over. I'm exhausted."

Four days spanning three provinces, four cities, and one municipality, the schedule was packed so tightly that even the energetic Tan Jincheng felt a bit exhausted.

"If you're tired, stop teasing the kids and get some rest. You'll have a lot to do later."

"That's right, there's an event tomorrow."

Besides the usual activities during the Lunar New Year, Tan Jincheng also has an important plan to discuss with the company's management, but that will have to wait until after the New Year.

Let's enjoy the New Year first and then talk about it.

"You should come with us tomorrow, we can take the kids and go get a free meal; oh, and Lao Zhang will be there too."

The atmosphere at the Spring Festival gathering for entrepreneurs in Beicang District was quite relaxed, and it was fine to bring family members along; it was a good way to unwind.

(End of this chapter)