What's wrong with me being a rich man?

Chapter 566 Why Did It Come to This? (4k)

April sales figures for Carbon Silicon Kyushu are out, and GAC Toyota's updated Highlander has also released its sales data.

From the start of the auto show until early May, the Highlander barely received 3000 small orders in a week and a half.

The moment this result was announced, Deputy General Manager Li Hui felt a sinking feeling in his heart.

The Highlander is not a new model; it has been a bestseller in China for many years. Compared to similar situations in the past, this number should be at least around 4000, and the total number of orders for the whole month should be around 1.

This is a direct 25% reduction, but considering all factors, it's at least a 20% reduction.

Li Hui returned to Guangzhou and had the data from the front-line stores analyzed in more detail. They found that the decline in orders in Beijing, Shanghai, Guangzhou, Shenzhen and new first-tier cities was more severe. The Guangzhou headquarters was relatively better, with a decline of 20% on average. Shanghai, where the carbon silicon headquarters is located, was the most severely affected, with a decline of more than 30%.

Beijing, Shanghai, Guangzhou, and Shenzhen can contribute 2% of Highlander's annual sales, while new first-tier cities can contribute 3%.

The Highlander's total sales last year were 8.5 units, with 1.7 units sold in the four major cities and 2.6 units sold in new first-tier cities. However, given the current situation with the facelifted model, sales may be 2 units lower this year.

What does 20,000 vehicles mean?
That means a loss of 60 billion yuan in annual revenue!
Li Hui was shocked, frustrated, and filled with doubt. How could it have come to this...?

Some people in the company were more optimistic: "It's not that bad. The carbon silicon car is very popular now, but how can this thing last? It's only relying on the new energy vehicle license plates in cities like Shanghai to boost sales. At most, it's in Shanghai, Shenzhen, Beijing, Guangzhou, plus Lin'an, which we just started developing. How long can that last?"

"Besides, the subsidies will start to decrease again next year, and carbon silicon cars will become less and less viable over time."

In May, in addition to the four departments jointly announcing a new policy on new energy vehicle subsidies, Lin'an also officially implemented the "Regulations on the Management of Total Number of Passenger Vehicles," which adopts a dual-track system of lottery and auction, with auction accounting for 2% of the total. The auction price in the first two days of the month was around 2.5 yuan.

The incentive of free license plates for new energy vehicles has a significant effect on cities where bidding is common. Although the Silicon Carbon Group has not released detailed data, judging from the actual situation pieced together by different media, these cities are indeed more popular.

From this perspective, it's unlikely that Carbon Silicon Kyushu will have a smooth expansion into other cities.

Li Hui listened to the discussion in the conference room but barely offered any feedback.

When the conference ended, he was questioned by his confidants.

"Mr. Li, what do you think of Mr. Liao's analysis of silicon carbide sales in different cities?"

Li Hui shook his head and sighed: "Carbon Silicon is located in Lingang. It is a car company launched by Shanghai and uses a lot of suppliers from Zhejiang and Jiangsu provinces. Now it also has publicity resources from above. It will have a very good influence in the Yangtze River Delta."

"Once the Yangtze River Delta region establishes a solid influence, it will likely have the ability to conquer the world."

The Yangtze River Delta region, encompassing Jiangsu, Zhejiang, and Shanghai, is an economically developed area and has always been a major source of mid-to-high-end car brands.

Li Hui does not believe that license plate factors alone can hinder Kyushu's development; at most, it's just a matter of speed versus even faster speed. And based on his observations and inquiries during his trip to Shanghai for the auto show, this is exactly the market strategy for silicon carbon.

For car owners in cities like Shanghai and Lin'an, cars like the Jiuzhou, which cost more to manufacture than to sell and come with free license plates, are a better deal. But for car owners in cities like Nanjing, even though they can't add the value of the license plates, does having a higher manufacturing cost than the selling price mean they're not worth it?
Li Hui was deeply worried.

Unlike him, GAC's management took an interest and even summoned Li Hui to a model analysis meeting, the theme of which was to modify their own models by benchmarking against cars like Kyushu.

Kyushu Carbon Silicon is not the only model to adopt the range-extended route. Regarding the exploration of new energy, both foreign and joint venture companies have tried different routes. For example, BMW made the i3 with a two-cylinder engine, GAC launched the Trumpchi GA5 REV with a 1.0L three-cylinder engine, and Fisker, which has gone bankrupt in the United States, made range-extended sports cars.

Leaving aside those that went bankrupt, companies like BMW and GAC, which were purely testing the waters or were on missions, didn't place much importance on the business, had limited resources, and their IPOs didn't make much of a splash, so they've never received much attention from the media or the market.

Even GAC itself has made an internal decision to discontinue the Trumpchi GA5 REV, which was only launched last year, by the end of the year, and instead switch from a range-extended route to a hybrid route.

However, the emergence and hot sales of Silicon Carbon Kyushu suddenly reminded GAC Group that they had such a product.

Huh? If silicon carbide can be made, why can't GAC Group?

If Kyushu can become a hit, why can't Trumpchi become a hit after some modifications?

Li Hui felt extremely uncomfortable attending meetings based on this theme.

He certainly knew about the range-extended Trumpchi GA5, but he never thought that car could truly compete. Not to mention that its pure electric range was only labeled as 80km, its 0-100km/h acceleration was almost 12 seconds, and the price was close to 200,000 yuan...

After seeing Kyushu's carbon silicon technology, and then coming back to look at this range-extended GA5...

Li Hui felt that this car was unethical, no wonder it sold dozens of units a month.

"Mr. Li, could you give me some feedback? If we give this car a facelift and make it an SUV, could we position it similarly to the carbon silicon car?" Jiao Xingwei, senior director of GAC, asked cheerfully. He added, "I've read Yu Xing's analysis; this family-oriented positioning is indeed interesting. Mr. Li, we're family, so don't worry about us taking market share from the Highlander. We don't need to target the 30 yuan market; targeting the 20 yuan market would be good enough."

Li Hui resisted the urge to roll his eyes. Even though they were family, not just any Tom, Dick, or Harry could try to steal the Highlander's market share.

He didn't look at Jiao Xingwei, but instead looked directly at Wu Song, the executive director who was chairing the meeting, considering how to better express his opinion.

Li Hui is the vice president of GAC Toyota and also the vice president of GAC Group. He is directly responsible for GAC Toyota's sales business and controls the marketing system of GAC's most profitable joint venture, making him a powerful figure.

However, although he holds a position in the group, his real power is mainly concentrated in the business segment of GAC Toyota. The person who truly carries more weight in GAC Group is Wu Song, who is standing right in front of him.

Wu Song oversees the entire chain of R&D, production, and sales of GAC's own brands, making him the head of the own brands and the only executive director in the group who holds positions in both business lines, which breaks GAC's management conventions.

He was the one who made the final decision to reverse the decision to discontinue the Trumpchi GA5 extended-range version.

Wu Song noticed Li Hui's gaze and nodded, saying, "President Li, please give me your feedback. Don't hold back. We're family, so what's there to be shy about talking behind closed doors?"

Upon hearing this, Li Hui slowly said, "I saw the actual car from Carbon Silicon Kyushu. They really put their heart into making this car, and the materials they used are top-notch. Their sales have exceeded 5000 for two consecutive months. This is not luck; it is the result of their solid and practical products."

"If GAC Motor wants to make a more cost-effective six-seater SUV, it's not that we don't have a chance, but it definitely needs a major overhaul."

"The engine used for power generation in Jiuzhou is a 2.0T from Shenyang Aerospace Mitsubishi, and its efficiency is quite good. That car truly combines the advantages of pure electric and fuel-powered vehicles. It's very quiet to drive, has good space, and doesn't have the range anxiety that pure electric vehicles have. Our engine depends on which one we use, and we also need to add batteries. Wanxiang's is quite inferior. I don't know if CATL has signed an exclusive agreement with silicon carbide batteries, but even if they have, it's fine. I heard that CATL really wants to develop ternary lithium batteries." "If GAC Motor wants to facelift its SUV, it needs to do surgery from the inside out. It's not that the lower the price of the car, the easier it is to win the market."

"Car owners in the price range of around 20 yuan are actually more discerning. They want both value for money and higher quality. I heard Yu Xing talk about this with the media at the Shanghai Auto Show, and he said something very insightful: you have to target potential car owners as the most discerning customers."

Li Hui spoke at length, but he couldn't fully express the shock and reflections he had about Carbon Silicon Kyushu. The company's hot sales and the Highlander's decline were like a sharp sword piercing his heart, instantly sobering him up.

Wu Song pondered and digested Li Hui's words.

Jiao Xingwei then raised a small objection: "Silicon carbon is a small workshop. If they can make it, we certainly can too. However, we don't necessarily have to replace the battery. Wanxiang's batteries are also good. I asked CATL, and their prices are much higher. We should save money in this area if possible."

He thought for a moment and then said, "Also, Trumpchi is going to make 20 units, not brag about competing with the X5. I've done my research, and family users don't have that high demand for speed, so there's no need to make the power too strong."

“If we enlarge the shell and give it more space, after the subsidies are used up, the car owner will only have to pay around 160,000 to 170,000 yuan, which is pretty good.”

Li Hui's lips moved, and seeing that many people were actually nodding, he immediately lost the will to argue.

Seeing that Mr. Li remained silent, Jiao Xingwei continued to share his thoughts on the role of family at length.

Li Hui could tell that Director Jiao must have carefully studied Yu Xing's remarks on different occasions, because he had also studied them. Many of the contents sounded very familiar, but the other party was doing it based on the product. Now you even think that the battery that has been verified by Kyushu is too expensive. How far will the market decline in the end?
The meeting lasted a long time and ended in the evening.

Li Hui suddenly felt pain as he walked out of the conference room.

The setbacks in the Highlander's market launch were painful, but watching a foreseeable failure unfold without being able to prevent it was even more painful.

However, he could tell that Mr. Wu had already made up his mind.

GAC Group has a dual-core, multi-element structure, and Mr. Wu is one of the "elements" in this structure. Moreover, he is on the side of independent brands. Li Hui also needs to consider his wording and stance during the communication.

When Li Hui arrived at the parking lot, he leaned against the car door, lit a cigarette, and began to blame someone.

The extended-range Trumpchi GA5 is about to be discontinued, all because the carbon silicon-based Kyushu is too dazzling!
……

Yu Xing took advantage of the Labor Day holiday to go to Lin'an.

Although it's called a holiday, the increased customer traffic actually makes the silicon carbide business even busier.

However, Yu Xing is a person who is willing to push forward once he makes a decision. This trip was to talk with Zhejiang Province about the possibility of future cooperation. Last time, they came to Lingang for inspection, and this time he went to Lin'an for a round trip.

Silicon Carbon has a planned second-phase factory in Lingang, which will begin construction at the end of the year. The project he wants to discuss is a new factory outside of the existing first-phase production and the planned second-phase.

Both Phase I and Phase II will produce six-seater SUVs. According to the carbon silicon assessment, this model still has a lot of space. It will not only take away market share from the Highlander, but also from first-tier SUVs. Users of the latter will also consider this factor in cities with license plate policies, thereby increasing the conversion rate.

As for how much room there is for sales growth, it depends on three factors: the type of vehicle, the industry as a whole, and the demand for SUVs.

Vehicle quality, the new energy vehicle industry, and the ever-increasing SUV penetration rate.

Yu Xing came with great uncertainty, merely wanting to hear about Zhejiang Province's policies, but he immediately received a certainty.

He swore he never mentioned car subsidies, but the Zhejiang provincial authorities directly discussed the impact of the new subsidy policy and expressed their willingness to postpone the proportion of local cash subsidies next year.

According to the latest policy, only 50% of the subsidy will be available next year, but local governments have some autonomy.

Based on its support for carbon and silicon, Shanghai has confirmed a six-month policy extension to help carbon and silicon mitigate the impact, while Zhejiang Province has expressed its support for new energy companies.

The leaders have said that regardless of whether silicon carbide plants are built in Zhejiang Province, the subsidy ratio will be increased again.

Yu Xing couldn't help but be moved, at least in his demeanor.

He sat in the provincial conference room, looking at everyone's smiling faces, when suddenly he saw a message on his phone from Xiao Ying about the latest situation at Toshiba. He thought to himself, "They're all good people. This whole room is full of good people, except... except for me, who's the only bad person."

Yu Xing did not immediately finalize the cooperation agreement; such matters usually require further discussion.

However, after he finished his day of communication, his secretary, Zhang Yangxu, suddenly reported some new information.

"Mr. Yu, the leaders from Changzhou would like to schedule a chat."

Yu Xing also saw the local leaders who came to Lin'an today, and knew that they wanted to win over the direction of the factory's establishment. If silicon carbide decides to cooperate with Zhejiang Province, then the choice of where to go will also be necessary.

He was about to nod when he suddenly asked, puzzled, "Wait, Changzhou? That's not right, isn't Changzhou in Jiang Province? Are you sure you're not mistaken?"

Zhang Yangxu confirmed, "That's right, it's over there."

Yu Xing felt something was off. It was rather unusual for local leaders from a neighboring province to come to Lin'an for exchanges.

He hesitated for a moment, but before he could speak, he received a call from IDG.

"There's some movement in silicon carbide. Can you persuade them?" Xiong Xiaoge asked directly.

Yu Xing replied, "I can't swim."

Xiong Xiaoge completed the task: "Okay, let's chat sometime."

After hanging up the phone, Yu Xing felt it would be more appropriate to finalize a memorandum of understanding as soon as possible.

(End of this chapter)