Rebirth 08: Rise from copycat phones

Chapter 520 The Complex Global Automotive Market

When the global automobile market was stirred up by Hailan Automobile, other major automobile companies also followed suit.

Many domestic car companies are the most active in embracing smart electric vehicles. After all, the country already has a clear strategy to support electric vehicles. In order to support the electric vehicle industry, huge subsidies for electric vehicles have been provided for many years. Although subsidies for electric vehicles have declined in the past two years, they are still continuing.

In addition, many cities that have too many cars on the road and are forced to control the number of cars registered have also gradually released license plates specifically for electric vehicles.

At the same time, the domestic smart electric vehicle industry chain is very complete and leading.

For example, in the core areas of various types of vehicle-mounted computing chips and power batteries, China is technologically advanced in these two areas, and is even far ahead of overseas companies.

The main reason is that Zhiyun Semiconductor is so powerful in the field of computing chips, and Hailan Battery, a subsidiary of Hailan Automobile, and Ningdai Battery, which is highly related, have huge advantages in the field of power batteries, especially in the field of semi-solid-state batteries and the solid-state battery field that emerged this year.

The country also has a complete supply chain of various spare parts needed for other electric vehicles. Even though many of the spare parts suppliers are still foreign companies, these foreign companies have also set up factories in China.

China currently has the most complete, largest and lowest-cost smart electric vehicle industry chain in the world.

These have also led to the extremely rapid development of the smart electric vehicle industry in China!
The annual sales of various types of electric vehicles in China have now exceeded two million, and are still growing rapidly!
This is talking about domestic sales. If it is production, it will be even greater!

The production capacity of HaiLan Automobile's domestic automobile factory alone is over one million vehicles. The production capacity of electric vehicles of many other automobile manufacturers is also not small. Adding together, the total production capacity is close to over two million vehicles.

It’s just that a lot of it is exported.

In particular, HaiLan Automobile's exports are very strong. In the first half of this year alone, HaiLan Automobile exported more than 300,000 vehicles... This refers to the export of complete vehicles, not including the number exported in the form of spare parts.

Most of Hailan Automobile's overseas factories are assembly plants, which need to import a large number of core spare parts from China, and then assemble and produce a small number of local spare parts such as car shells and interiors that have little technical content.

For example, in the Thai factory, more than 90% of the spare parts cost of producing a Hailan car, such as power batteries, computing chips, and various important chassis parts, are shipped from China.

If these are also taken into account, then Hailan Automobile's export volume is actually even greater!
This is mainly because Hailan Automobile is a high-end model for the global market, and its share of the overseas market is relatively large, occupying more than 50% for a long time.

If HaiLan Automobile had only relied on the domestic market, it would not have been able to reach its current level.

However, HaiLan Automobile is trying to expand its domestic market, focusing on the HaiLan YEV model, in an attempt to further increase the proportion of HaiLan Automobile's domestic revenue.

It is better to rely on yourself than on others, especially for automobiles which are relatively special commodities in international trade.

If a country in an overseas market already has a certain automobile industry, and if you pose a serious threat to the local automobile industry, the local government will ban you!

This also leads to too much uncertainty in the overseas markets!

After all, you know that the automobile industry is important, and you do everything you can to support it, and you even try to overtake others by playing with electric cars. But others also know that the automobile industry is important, and they will do everything they can to protect it... Don't treat foreigners as fools!

Automobiles, a special industrial product that accounts for a huge proportion of the economy, can never be exported smoothly just because the product is good and the price is low...it is often accompanied by various restrictions.

Many countries with automobile industries, such as India, cannot sit idly by and watch a large number of cheap electric vehicles sweep the local market and drive local automobile companies into bankruptcy.

They will raise automobile tariffs, conduct anti-trademark investigations, impose fines, and generally try every way to restrict you...forcing you to either not come in or come in and build a factory.

This is also the reason why HaiLan Auto’s overseas operation strategy is diversified!

On the one hand, we focus on national markets where there is no local automobile industry. These markets are the easiest to enter because if there is no local automobile industry, there will be no fierce competition with the local automobile industry. These are all major multinational automobile companies fighting here, relying on the products themselves, as well as corporate marketing and other corporate factors.

This kind of national market, which has no automobile industry, is the main market for HaiLan Automobile. It invests in good car models and even sets relatively low prices in order to attract as many local consumers as possible.

Don’t be fooled by the small scale of each of these countries’ markets. When the markets of many countries are added together, they are very large... After all, the automobile industry is a relatively high-end industry. Most countries don’t actually have any automobile industry. The markets of these countries that don’t have any automobile industry are the high-quality markets in the eyes of Hailan Automobile.

Another part of the overseas market is that there is a certain automobile industry in the local area, but the scale of the automobile industry is very small. They themselves also hope to introduce new external forces to break the original pattern and try to develop a certain automobile industry. The local market has a relatively large overseas market.

In places such as Thailand, Indonesia, and Brazil, Hailan Automobile's local strategy is to set up assembly plants locally, and then sell low-tech spare parts such as car bodies and interiors to local manufacturers, forming a vested interest relationship in the supply chain.

After finishing these, we will import core parts and components, assemble them locally and then start mass production and sales!
These places are also one of the main markets for Hailan Automobile.

Finally, for the more special region of Europe, the European Union is a relatively loose alliance. Some places within it have automobile industries, while others do not. There is room for exchanging interests here.

At the same time, several large European car companies, mainly those in Germany, France and Italy, also want to develop electric cars, but their technology is not good enough. They want to obtain some of Hailan Automobile's technology and the supply of core components, especially batteries and on-board computing chips.

At the same time, these car companies also have huge sales in China... They are also afraid of the consequences. If you dare to set up a barrier to block Hailan Automobile in the European market today, according to Xu Shenxue's temper, he will strike you in the Chinese market in a minute...

Back then, fruit pushed Zhiyun Group's smart terminals to be banned in the United States, but Xu Shenxue immediately kicked fruit out of the Chinese market.

Previously, HaiLian Automobile was subject to a 100% tariff in the US market. Xu Shenxue immediately pushed for a 100% tariff on imported vehicles from US automakers such as Ford and GM, and stopped the supply of advanced in-vehicle computing chips and semi-solid-state batteries to GM and Ford's various car brands.

It's a situation where you hit me and I hit you back.

The Chinese market is the world's largest smart terminal market today... Similarly, China is also the world's largest automobile market, with annual sales of more than 25 million vehicles.

The US auto market is only around 17 million, while the entire EU has only around 15 million vehicles!
Although the market share of European car companies in China has declined in recent years due to the impact of domestic electric vehicles, the Chinese market is still one of their most important markets and they will not give it up easily.

At the same time, they also find it difficult to tolerate HaiLan Automobile's direct entry into the European market through low-tariff orders... HaiLan Automobile is too competitive in the European market with low tariffs, and they can't bear it!

It has a lot of black technology, advanced techniques, and is also known for being environmentally friendly. As for the price, it is not expensive for the mainstream developed country markets in Europe. The two models, Hailan SLMC and Hailan MEV, are still quite popular among European middle-class families.

After weighing many interests, these European car companies finally exchanged interests with Hailan Automobile, set up a Hailan Spanish factory and a Hailan Hungarian factory, obtained some spare parts supply orders, and shared part of the profits.

At the same time, it also obtained the supply of core components, such as semi-solid-state batteries, computing power chips, etc.

In exchange, Hailan Automobile successfully entered the European market, making the European market the second largest market for Hailan Automobile!

As for the Japanese market and the Korean market, these two markets are relatively special. They both have extremely strong automobile industries, public opinion from all walks of life is not very friendly to imported cars, and the acceptance of electric vehicles is also low.

This has resulted in a very low sales share of electric vehicles in the local area, and Hailan is not selling well in these two places... However, at the local official level, even local car companies dare not restrict the sales of imported Hailan cars in the local area, because they themselves are still counting on the Chinese car market.

This is an act of market exchange, and everyone competes based on their own abilities... As for consumers not accepting it, that is the car companies' own problem!

In addition, HaiLan Automobile has to compete with BMW, Mercedes-Benz, Tesla and other imported car brands in the Japanese and Korean markets, which puts a lot of pressure on it.

Although HaiLian Automobile is the absolute leader in electric vehicles in the local area, accounting for more than 50% of the local new energy vehicle sales for many years, the problem is that the total sales volume of local new energy vehicles is too low!

When it comes to specific overseas markets, the sales volume of HaiLan Automobile has actually never been high... There is no way around it, the sales volume of high-end models is originally low. The huge sales volume of HaiLan Automobile overseas does not rely on a single overseas country, but on the sales volume of more than 100 countries around the world combined.

After all, HaiLan Auto is a multinational automobile company targeting the global market. Even in Africa, you can see local dealers of HaiLan Auto.

Even in the US market, which has a 100% import tariff, there are still tens of thousands of vehicles sold each year... There are many wealthy people in the US, and many people are willing to spend 100% of the tariff to buy a Hailan car.

After all, this black-tech smart electric car with L4 level autonomous driving is the only one of its kind in the world, and the local wealthy people have no choice. If they want to experience L4 level autonomous driving and the world's top smart driving cabin, they can only buy Hailan cars.

To be honest, Zhiyun and Hailan, the two brands under Xu Shenxue, are very well-known in the United States and are highly recognized among middle-class families, especially the upper class.

Who made the United States blow the Zhiyun threat theory and Hailan threat theory every day, saying that it is necessary to raise tariffs to prevent Zhiyun and Hailan products from entering the country?

This has been said many times. Americans from middle-class and even elite families naturally know that Zhiyun mobile phones and Hailan cars are too good. If they are allowed to enter the market, Apple, GM and Ford will all die...

Therefore, many rich people, while saying that Zhiyun or Hailan cars should not be allowed to enter the country, are using smuggled Zhiyun phones and driving Hailan cars that are imported with 100% tariffs.

Therefore, Hailan cars continue to be sold in the US market, but compared with tens of thousands of cars per year in the early years, the sales volume has dropped to tens of thousands, which has no impact on the overall situation of the local car market.

It sells tens of thousands of vehicles in this country and tens of thousands in another country. With so many countries around the world, Hailan Automobile's overseas sales total nearly one million vehicles when added together.

This is not an easy task, after all, Hailan Automobile is a high-end model, and it is not easy to achieve sales of millions of units overseas. Hailan Automobile has never been a low-end car brand that plays with cost performance. It has been a high-end car brand from the beginning.

That is, it is cheaper in China, but very expensive overseas.

In China, the entry-level version of the Hailan YEV can be purchased for RMB 250,000... This is because costs in all aspects are relatively low in China, resulting in low overall costs.

The overall cost is low, so the selling price is naturally cheap.

In addition, the selling price of 250,000 yuan has to include tens of thousands of subsidies. If the subsidies are not counted, this car would have to be sold for around 300,000 yuan even in China.

In overseas markets, Hailan Automobile's costs in all aspects will increase. For example, if the entire vehicle is exported, there will be local tariffs and transportation costs. At the same time, establishing a marketing and after-sales system in the local area will also require higher costs.

These costs will eventually be calculated into the comprehensive cost and added to the terminal selling price.

Then a very important point is that in most overseas markets, there are no subsidies for electric vehicles, and only a few countries have subsidies.

This also leads to the fact that the prices of Hailan cars in overseas markets are generally higher than those in China!

For example, in the Japanese market, the HaiLan YEV model launched locally by HaiLan Automobile has an entry-level version of the cheapest imported vehicle, which is priced at about 400,000 Chinese yuan... The price is about 150,000 yuan higher than that in China.

The iconic Hailan car model, Hailan SLMC, is an imported top-of-the-line four-wheel drive long-range version in the Japanese market. It can be equipped with an optional L4-level automatic driving. The price is about Chinese yuan, which is yuan more expensive than the domestic landing price of about yuan.

The cost increases here are caused by increases in tariffs, marketing, administration, transportation and many other costs, as well as subsidy factors.

The overly high price is also the main reason preventing Hailan Automobile's overseas sales from continuing to increase significantly.

This is also the main reason why Hailan Automobile launched the sub-brand "Amy" for the mid-to-low-end market... If the price of the car is too expensive, sales will not increase.

If you want to expand sales, especially if you want to achieve annual sales of several million or even tens of millions, you can only enter the mainstream market with a price of more than 100,000 yuan.

Car models priced around 100,000 or more than 100,000 are the mainstream models in the current automobile market, occupying the majority of sales in the automobile market... This price has nothing to do with the performance and configuration of the car, but is determined by people's wallets.

If Hailan Automobile wants to become one of the world's top automobile companies and achieve car sales of several million or even tens of millions, then it must have core flagship models priced between one hundred thousand and two hundred thousand.

The Hailan brand is unable to undertake this task, so its newly launched Amy brand has taken on this task and started to use backward technology to open up the mid- and low-end markets. However, it is hard to say whether it can succeed as the competition in the low-end market is too fierce.

To be honest, in the low-end market, Hailan Automobile has no advantage over BYD...

You say that your HaiLan Automobile's technology is awesome, but your advanced technologies such as L4 or even L3 assisted driving technology, solid-state batteries, and even semi-solid-state batteries cannot be used in models that cost hundreds of thousands of yuan... The cost is there, and models that cost hundreds of thousands of yuan cannot afford them.

If you use lithium iron phosphate batteries and L2+ assisted driving technology and still want to maintain a certain profit, it will be very difficult. You can only go the route of adding value to the brand through brand and workmanship.

At least the cost-effective model cannot be adopted!
If the Amy brand wants to play the cost-effective model... BYD said that I can beat you with one hand, and I will lose even if I use both hands!

BYD is able to maximize the cost-effectiveness, and also has plug-in hybrid models with very good technology. How can you compare with a plug-in hybrid model worth 100,000 yuan? You can't compare...

Moreover, almost none of the companies under Xu Shenxue are concerned with cost-effectiveness, and they are not good at doing these things.

Even the mid- and low-end mobile phones produced by Wecoo Electronics have never been about cost-effectiveness... Wecoo Electronics has many mobile phones priced at thousands of yuan, but although they are cheap, their configurations are also low.

Weiku Electronics' low-priced mobile phones take the low-spec and low-price route, rather than the high-spec and low-price cost-effective route.

There is a big difference here.

The Amy brand under HaiLan Automobile is similar. Although it plans to focus on mid- and low-end models, it does not intend to play with cost-effectiveness. In fact, HaiLan Automobile is not good at cost-effectiveness.

Therefore, we must work hard in brand operation and other aspects, and have some unique technological advantages to support a certain premium and maintain a certain gross profit in the low-end market.

This is still very difficult!

To this end, in addition to testing the Amy brand in overseas markets, Hailan Automobile also has plans for several other low-end sub-brands internally. If the Amy brand fails, a replacement plan will be quickly launched.

No matter what, a part of the mid- and low-end market must be taken, which is related to the overall development plan of Hailan Automobile.

Similarly, the continued explosion of the mid- and low-end markets in the electric vehicle field has also completely ignited electric vehicles, especially the domestic electric vehicle market.

In the period of explosive growth in the domestic electric vehicle market in recent years, not only the leading electric vehicle company HaiLian Automobile has taken a big bite of the pie, but many other domestic car companies' independent electric vehicle brands have also more or less taken a bite of the pie.

Even many foreign automobile manufacturers are worried and jealous after seeing this!
They also want to get a piece of the electric car pie in China, the largest automobile market!

However, apart from Tesla, other traditional car manufacturers have weak technological accumulation in the field of electric vehicles. At the same time, it is very difficult to develop electric vehicles because of many difficulties such as large companies having difficulty turning around.

It’s not that they don’t want to do it, but they can’t do it, or if they do, the performance is not good or the price-performance ratio is too poor, which leads to them not being able to sell.

Ford’s failed attempt at electric vehicles is a typical example.

Today's traditional large automobile manufacturers are facing similar problems as Nokia did back then... The new era has arrived, but they are unable to keep up for various reasons.

Weak technology is one aspect, and limitations in the industrial chain are another.

Behind every large traditional automobile manufacturer is a huge industrial chain!
It is difficult to give up just like that. Even if the management of this automobile manufacturer wants to abandon these traditional industrial chains and switch to electric vehicles, it will encounter great resistance!
If you develop electric cars, what about the hundreds of thousands or even millions of people employed in the related industry chain?
Besides, although the current electric vehicle industry has shown great potential, global sales are only more than 4 million vehicles, and more than half of the market is still concentrated in China!
Global automobile sales are around 70 to 80 million.

If you give up the fuel vehicle market for the sake of the electric vehicle market of several million vehicles, wouldn’t that be stupid?

As a result, the management of many traditional large automobile manufacturers are in a dilemma... Everyone has a premonition that the future belongs to electric vehicles, especially after Hailan Automobile developed solid-state batteries this year. The high safety and high energy density of solid-state batteries have almost proved the huge future potential of electric vehicles.

It may not be possible to completely replace fuel vehicles in the future, but replacing more than half of them will not be a problem!

The future is already clear and everyone can see it.

But on the other hand, there are also various obstacles. The existing fuel vehicle industry chain has huge obstacles. The people in the industry chain are trying to stop you from doing it for the sake of their jobs...

On the other hand, the technical difficulty of developing electric vehicles is very high, and cultivating an industrial chain is even more difficult. This requires huge investment, and where the funds for this investment come from is also a problem.

They were caught in a dilemma and wanted to struggle, but it was too difficult!

But even if it's difficult, we have to do it. We can't just sit there and wait to die!
There is neither a relevant electric vehicle industry chain in their local area nor enough high-tech talents in the field of electric vehicles, especially R&D talents. They can't even set up a R&D center in their local area... and there is not enough market for cultivation.

But all these problems do not exist in the Chinese market.

As a result, starting this year, many large foreign automobile manufacturers have unanimously taken the same path, increasing their investment in China and setting up research and development centers for electric vehicles.

First, they use local talent and industrial chains in China to develop good electric vehicles. After they have passed the test of fierce competition in the Chinese market, they will then sell the tested models back to their local European or Japanese and Korean markets.

This is a very interesting phenomenon in the global automotive industry this year: major global automakers have flocked to China to develop electric vehicles!

Xu Shenxue welcomes this!

The electric vehicle market still needs everyone to work together!
The larger the entire electric vehicle market is, the better HaiLian Automobile will sell, and the greater the benefits will be to the Huaxia Automobile industry chain, which dominates the electric vehicle industry chain.

The more China's automotive industry chain benefits, the better the power batteries of Ningdai Battery under his control and the various automotive chips under Zhiyun Semiconductor will sell!
This is a win-win approach to collaboration!

He Xu Shenxue won twice!
As for traditional large automobile manufacturers, this is an opportunity and a challenge, but it is hard to say whether they can successfully transform.

(End of this chapter)