2003: Starting with Foreign Trade

Chapter 976 This place has bad feng shui (Seeking monthly votes)
"Whether a product is self-developed or not is not that important to consumers. What consumers care about is whether they can buy the product they want."

After leaving the company, Tan Jincheng made a detour to nearby Xiaomi. Coincidentally, Lei Jun was in the company, and the two chatted for a while in Lei Jun's office. The chip shortage had also affected Xiaomi.

However, compared to Huawei, Xiaomi's supply chain advantages, built up over many years, have played a significant role. Huawei's mobile phone business is currently selling very well, but everyone knows this is like overheating a fire; as time goes on, Huawei's problems will inevitably surface.

By September 15th, the chip ban on Huawei will take full effect, and Huawei will inevitably face even greater trouble. Thinking about this, Tan Jincheng couldn't help but recall something.

"By the way, I heard Honor is going to be sold?"

Honor and Huawei are two brands, one focusing on the high-end market and the other on sales volume. This has allowed Huawei to forge ahead in the mobile phone market. However, if the chip supply is cut off, both brands will be greatly affected.

Compared to the sales volume of the Chrysanthemum brand, Honor's sales volume is much larger. Selling it to facilitate Honor's development is actually the best approach.

Lei Jun laughed and said, "There is such a rumor; what, are you interested?"

Tan Jincheng shook his head: "No interest, besides, this is not something I would be interested in."

Honor is said to have been sold, but in reality, it's just a bug fix. It's definitely still under Huawei's control. Once Huawei feels it can't control Honor anymore, they will immediately launch a new brand to replace it.

Buying Honor with money is simply a way to benefit Huawei. Just look at the acquirers involved in the Honor acquisition; apart from the Shenzhen State-owned Assets Supervision and Administration Commission, they are all Honor's suppliers, with the Shenzhen State-owned Assets Supervision and Administration Commission playing a leading role.

This is undoubtedly a way to solve Chrysanthemum's troubles; anyone who tries to covet glory at this time may suffer a backlash.

Besides these, Tan Jincheng now owns Meizu. Honor's sales are indeed very high, but compared with Meizu, it has no soul beyond sales volume.

"That's true. Continuing our previous topic, is this your view on self-developed technologies?"

In the second quarter, Xiaomi's stock price rose well, and it has now risen to around HK$15, nearly doubling from last year's low. The 7.9 million Xiaomi shares that Tan Jincheng personally invested HK$8900 million to acquire last year are now worth more than HK$13.35 billion.

In ten months, the increased holdings of Xiaomi shares brought Tan Jincheng an appreciation of HK$5.45 million. Based on Xiaomi's development trajectory this year and the current stock trend, it is expected to continue to rise.

Preliminary estimates suggest that Tan Jincheng's investment will generate at least HK$10 billion in profit once the lock-up period expires.

Tan Jincheng was in a good mood, and Lei Jun was in a good mood as well. Xiaomi's revenue in the first half of the year was 1032 billion yuan, an increase of 7.9%. Its mobile phone business remained firmly in the top four globally, and it entered the top three in Europe for the first time. Spain has held the number one position for two consecutive quarters.

Most importantly, Xiaomi's average selling price (ASP) has increased to RMB 1116.3 this year, with a significant increase in the proportion of mid-range models, significant growth in IoT and Internet businesses, and revenue growth overseas. This year's Xiaomi 10 is Xiaomi's first attempt to break into the high-end market.

However, with the presence of competing models like the Meizu 17, Xiaomi's path to the high-end market remains quite challenging. But overall, Xiaomi's development this year has been very good.

In addition, Xiaomi has already begun planning to manufacture cars.

The high-spirited Lei Jun has been making a series of astonishing statements this year, such as "If you're so capable, why don't you bring your own goods to sell?", "I'm not afraid of life and death, if you're not convinced, then fight me", "Our competitors are idiots", and "I'll crush your ass".

While the controversy has brought Xiaomi and itself a lot of traffic, the internet has changed from a battle between Apple and Android to a battle between Huawei and Xiaomi.

Xiaomi has successfully snatched the traffic gateway from Apple.

“Our two companies have different marketing approaches, so self-developed versus non-self-developed technologies are very important to Xiaomi, but not so important to Wei Lai.”

Xiaomi is essentially the same as Huawei; they rely on their fans, or their core customer base, for business. It's like a livestreamer who needs to continuously provide emotional value to their fans. If the emotional value is provided effectively, then sales will naturally follow.

Since 2018, the term "self-developed" has appeared frequently on the internet. Most companies across various industries use the term "self-developed" to emphasize their technological reserves and increase consumers' sense of pride.

This is one of the marketing methods that has been prevalent in the present and even for the next few years, especially in the mobile phone industry, which is a major target of this marketing method. And now the automotive industry is also showing this trend.

However, in reality, there is not much difference for consumers whether a product is self-developed or not.

"From a consumer's perspective, it's not really necessary to care which company's parts are used in the products you buy, as long as they are cheap and easy to use. However, I can understand the current trend, and it's difficult to change this trend in the short term."

Consumers love this kind of thing right now, so businesses have no choice but to market in this direction, which is undeniable. However, it's actually very difficult to define what constitutes "self-developed" technology.

For example, take chips. Weilai Auto's self-developed chips are designed and manufactured by Horizon Robotics. Does that count as self-developed?

It could be considered as such, but it could also not be, because it was provided by a supplier, even though this supplier was also under the control of Tan Jincheng. And what about Weilai's in-vehicle infotainment system? Is it completely self-developed?

If we really want to be precise, it can't be entirely considered as such. It's the result of collaboration with a series of suppliers, including Meizu. Any large company's so-called self-developed technology is inseparable from the cooperation of its suppliers.

Take chips as an example. BYD Semiconductor is a model of self-developed automotive-grade chips, but it still cannot do without the support of suppliers.

"However, while consumers may enjoy hearing about it, we won't do much marketing in this area, and we will highlight the achievements of our suppliers."

After saying that, Tan Jincheng stared intently at Lei Jun and said, "Cars are different from cell phones."

Xiaomi has already secretly initiated a car manufacturing project internally. Tan Jincheng understands the marketing methods in the mobile phone industry, and whether it's Xiaomi or Huawei, their entry into the automotive industry will definitely bring many changes.

"What? Is Mr. Tan afraid that we'll bring the marketing methods from the mobile phone industry into the automotive industry?"

In front of Tan Jincheng, Lei Jun couldn't possibly say that the rumors about Xiaomi making cars were false. In fact, Tan Jincheng is still one of Xiaomi's directors, so it wouldn't be difficult for him to find out Xiaomi's true thoughts on making cars.

"It's not that I'm afraid, it's that you definitely will, but I hope you can still exercise some restraint and keep the safety of consumers in mind."

The models that Huawei is currently collaborating with Sokon on have not made much of a splash, and Huawei doesn't seem to be focusing on marketing its cars at the moment. However, once Huawei has properly streamlined its mobile phone business next year, it will inevitably strengthen its marketing efforts in the automotive sector.

At that time, Xiaomi officially entered the automotive market. These two companies, which currently have the strongest marketing capabilities and a huge fan base, had a significant impact on the marketing methods of the automotive industry.

Faced with Tan Jincheng's request, Lei Bus smiled but did not give a specific answer.

Seeing this, Tan Jincheng said no more. The two chatted casually about the current state of the industry before Tan Jincheng left.

"Let's go."

The moment Tan Jincheng stepped out of Xiaomi Group's headquarters, he looked back one last time. From that moment on, Weilai Group and Xiaomi Group were two completely independent companies, no longer strategic partners.

"After we go back, we need to renegotiate the contracts for the research institute and key technical personnel, and raise their salaries, especially for experts in intelligent chips. We need to not only retain our own staff, but also find ways to recruit more outstanding technical talents."

In the past two years, there has been frequent talent mobility in the field of intelligent chips. Many companies have offered generous compensation packages to attract talent, including some with annual salaries of over one million yuan. Companies such as Horizon Robotics, National Technology, and BYD Semiconductor have all offered generous compensation packages to attract talent.

According to a job posting on a well-known recruitment website, a prominent Shanghai-listed company is seeking a senior automotive-grade chip expert to be responsible for defining the requirements and specifications of automotive-grade IC chips and promoting the improvement of the automotive-grade development system. The salary offered is between 100 million and 150 million yuan per year.

This does not include stock options, bonuses, and other benefits. In addition, Xiaomi has been recruiting more and more people with automotive expertise recently.

"Is the boss afraid that Xiaomi will poach our talent?"

Judging from the boss's expression, Zhao Xinyi knew that the conversation between the boss and Lei Jun did not go well. She estimated that it wouldn't be long before ByteDance's advertising platform would start reducing its holdings in Xiaomi, and the time before the last promise not to reduce its holdings was approaching.

"Yes, when it comes to poaching talent, our CEO Lei's reputation is definitely worse than mine."

Tan Jincheng also made no secret of the fact that he used some unconventional methods to recruit talent in the early stages of his business, which left him with a bad reputation. But at that time, he had no choice because he had limited personal connections and could only resort to unconventional methods.

However, in recent years, Weilai has also poached people and offered high salaries, but these are more aimed at overseas technical experts. For domestic talents, it still follows the same path as Huawei, which is to cooperate with universities and scientific research institutions.

Since Shanchi became a leading two-wheeled electric vehicle company in China, Tan Jincheng has intended to cooperate with major universities and research institutions across the country to cultivate talent for his companies through such collaborations.

Take Luzhou University of Technology as an example. Both Flash and Weilai have strategic cooperation with Luzhou University of Technology, investing more than 10 million yuan every year. They have majors that are specifically designed to train talents for enterprises. After completing their studies, students will go to relevant cooperative research institutions for an internship for a period of time, and then rotate through different positions within the group.

This is a talent training program targeting relatively high-end talents. For the training of grassroots technical personnel, Tan Jincheng's companies also have many cooperative colleges and universities, such as Ningbo Vocational College and other major professional colleges in Ningbo, with many cooperative majors.

Although Ningbo has limited university resources, it has abundant resources in specialized vocational colleges. As long as companies are willing to invest, they can establish majors that align with their business development and cultivate talent specifically for their needs.

Although this cooperative model is somewhat commercialized, it can bring great benefits to schools, businesses, and students. Schools can solve part of their education funding problems, and businesses can meet their labor needs at a lower cost.

In the current challenging job market, students no longer need to worry about finding employment after graduation.

Nanjing. After leaving the capital, Tan Jincheng stayed in Nanjing for two days to attend the Series A funding round of SemiDrive Technology. This automotive-grade chip company, founded in 2018 by a former NXP executive who returned to China, has attracted attention from venture capital, industrial funds, and state-owned capital since its inception.

In just 16 months, SemiDrive Technology successfully taped out China's first 16nm automotive-grade SoC chip and officially released three chips this year: X9 (intelligent cockpit), V9 (intelligent driving), and G9 (central gateway).

The development has been extremely rapid.

"Mr. Tan has many businesses in Jiangsu Province, but it seems he doesn't have many in Nanjing. Online, Nanjing is referred to as the 'Huijing' (a city in ancient China). Don't you have any thoughts on that?"

Zhang Qiang, one of the two founders of SemiDrive Technology and in charge of market expansion and financing, chatted with Tan Jincheng with a smile in the lounge after signing the agreement.

"Mr. Zhang, is there anything you'd like to say? Did Jinling send you here as an intermediary?"

This investment in SemiDrive Technology was facilitated by Kuang Ping, another old friend of Tan Jincheng and Tan Jincheng's first investor. Many of SemiDrive's venture capital rounds included old friends such as Sequoia Capital.

To be honest, if the name hadn't already been registered, Tan Jincheng would have really wanted to change National Technology to ChipDrive Technology, since the name suits him so well.

Aside from the relationship between Shen Nanpeng and Kuang Ping, there was indeed a reason for choosing to invest in this company, based on its name.

In its Series A funding round, SemiDrive Technology was valued at 5 billion yuan. SemiDrive Technology offered 10% of its shares to raise 50 million yuan. ByteDance led the investment, acquiring 5% of SemiDrive Technology's shares for 2.5 million yuan.

"Haha, I can't hide it from President Tan. He really does have the intention of acting as a persuader."

Zhang Qiang laughed. An investment of the magnitude of ByteDance's Engine didn't require Tan Jincheng to stay in Nanjing for two days. The reason Zhang Qiang had Kuang Ping personally invite Tan Jincheng to come and sign the documents was because...

On the one hand, Weilai is currently building its own chip industry chain and has plans to raise funds and cooperate with many companies. ChipDrive needs to get on Weilai's bandwagon. It is said that Mr. Tan is quite willing to invest when introduced by friends.

Now it's clear that this is indeed the case. Of the 5 million yuan Series A funding, ByteDance's advertising platform took half of it. With the addition of Kuang Ping and another institution, SemiDrive's Series A funding couldn't have been smoother.

However, there were indeed other reasons for letting Tan Jincheng stay in Jinling.

"Hehe, he's an insider, how could we possibly hide it from him?"

Kuang Ping chuckled.

"To be honest, Jinling has a lot of things, but it doesn't seem to fit in with the automobile industry. It feels a bit strange."

Tan Jincheng did not give a direct answer. In the traditional automotive industry, car companies like Fiat in Jinling have not done very well, and Jinling itself has not created a proper independent brand.

After Nanjing Automobile was acquired by SAIC, it became an industrial base, but it didn't really make a name for itself. If we're talking about the most impressive car company in Nanjing, it's probably Iveco.

This brand used to sell very well, but it was relentlessly attacked by its competitors, and then it faded away.

As for emerging forces, Jinling is the most ridiculous. Among the emerging forces and new energy companies facing bankruptcy this year, there are four in Jinling alone!
Bordrin, which has already declared bankruptcy; Zhidou, which is facing difficulties; Qiantu Motors; and Byton, which claims to be the domestic Tesla.

Oh, right, there's also the Yinlong project, the one Ms. Dong owns.

The pressure on Nanjing, where so many new energy vehicle companies have collapsed in a short period of time is unimaginable.

Zhang Qiang was taken aback: "Uh, Mr. Tan actually believes in this? But when you think about it, it does seem to be true."

He was the mediator, and Tan Jincheng's ambiguous words left him unsure how to proceed. To be honest, he didn't really want to be the middleman, but he was under someone else's roof and had received subsidies from the local government. Since the local government asked him to help make connections, he couldn't just refuse outright.

The main reason is that Tan Jincheng has a very strong ability to restructure bankrupt and distressed companies, such as Yangzi Automobile, Meizu mobile phones, Lifan Automobile which is currently undergoing restructuring, and Guomin Technology which was wholly acquired.

Apart from Lifan Motors, other companies have entered a period of smooth transition and rapid development. Yuechi Motors' acquisition of Yangzi Motors even indirectly saved Changfeng Motors.

Meizu needs no introduction; it now firmly holds the position of a leading second-tier domestic mobile phone brand, a stark contrast to its performance during Huang Zhang's tenure. Guomin Technology, after being acquired, has successfully weathered the challenges of the first quarter this year with the support of strong shareholders and is now diligently working to improve its business.

Tan Jincheng smiled and asked, "Which one?"

Kuang Ping, who was standing to the side, couldn't help but chuckle, pointed at Tan Jincheng, and didn't know what to say.

This old friend has always been so outspoken in private. If the local government heard this, it would be a real slap in the face. In terms of emerging forces, Nanjing has indeed been a joke this year.

Zhang Qiang almost couldn't hold back either, but he managed to restrain himself as much as possible.

"Byton, their factory is actually quite impressive."

Speaking of Byton, Zhang Qiang was a little embarrassed. This pure electric vehicle company, which claimed to be the domestic Tesla, truly amazed the market when its concept car was released. The custom screen in the car's infotainment system was dazzling.

In addition, in terms of appearance design and other aspects, Byton is indeed aimed at Tesla. The two concept cars echoed the Model S and Model X on the market at that time.

"Byton, is it possible that the money from FAW is not being received?"

When it comes to which new energy vehicle startup has the deepest background, Byton is absolutely amazing. It has a senior management team from BMW, well-known technical talents from all over the world, top venture capital institutions such as Tencent and Foxconn, as well as funding and policy support from FAW, overseas and local governments.

Their debut was stunning, and their concept cars were incredibly impressive. However, after several years, they haven't produced a single mass-produced car, and all the market remembers about them is their money-burning behavior.

For example, there are work uniforms costing tens of thousands of yuan per set for all employees, first-class travel for senior executives, and tens of millions of yuan in snack expenses per year.

That's right, they spend tens of millions of dollars a year on snacks. The North American office has 300 employees, and the annual snack expenses are 5000 million yuan, which is 457 yuan per person per day. It's really just burning money.

With such a serious waste, it's no wonder that the shrewd Pony Ma chose to run away with the buckets during the Series A funding round.

"The funds haven't arrived yet, so we're looking to bring in new investors."

FAW is actually preparing to save Byton. SAIC is making great strides in the field of new energy vehicles, not only with its own models, but also with a deep layout in the industrial chain. But what does FAW, which is on par with SAIC, have in the field of new energy vehicles?
It's not an exaggeration to say that Byton has nothing to offer. FAW still has a reason to save Byton. Besides, Byton isn't a shell company; they still have factories.

"Byton is out of the question, but we can talk about Zhidou."

This company is even more bizarre than Accountant Jia and Belt Xu; at least those two managed to produce a few mass-produced cars. They, on the other hand, haven't produced a single mass-produced car. In terms of wastefulness, Li Bing is like a primary school student compared to them.

Zhang Qiang was stunned again: "Zhi Dou?"

He came as a lobbyist and learned about Tan Jincheng's style from Kuang Ping. He wasn't surprised that Tan Jincheng directly refused to invest in Byton. However, Tan Jincheng mentioned Zhidou again. Did he complete his mission?

"Yes, Zhidou, if you want to talk about it, I can."

Zhidou is one of the earliest companies in China to enter the new energy vehicle field. Founded in 2006, they focus on the micro electric vehicle (A00 class) market. Their first new energy vehicle was launched only four months later than Tesla's Model S.

Initially, it focused on the export market and even obtained EU E-Mark certification in Europe. After being acquired by Zhongtai, Zhidou enjoyed a period of glory during the new energy vehicle subsidy war, with its sales once ranking among the top three.

However, now that the parent company, Zhongtai, is almost finished, Zhidou is not much better off.

Of course, the most important factor is the reduction in subsidies for new energy vehicles, which has severely impacted its sales. In 2018, Zhidou only sold 1.53 vehicles, and this year it has completely disappeared from the sales statistics of the China Passenger Car Association.

"If Zhidou is willing to discuss this, we wouldn't mind."

Weilai does not have a market for A00-class cars, and neither the Weilai brand nor its sub-brand Exeed has any plans to enter the A00-class car market. However, this market is actually quite large, and most importantly, it can be exported.

In terms of exports, Zhidou has a wealth of experience. Combining with Weilai and other brands through distribution channels in both lower-tier and export markets is a good option.

It's not very meaningful to only have exams held domestically.

Tan Jincheng had made his point clear, and Zhang Qiang had no other choice but to nod and say, "Alright, I'll talk to them about it. But as far as I know, Geely seems to have its eye on Zhidou as well."

"It's okay, let's talk."

Geely's interest in Zhidou stems from its understanding that while the microcar market may not offer high profit margins, it is a good way to boost sales and a promising avenue for technology transfer.

(End of this chapter)