Shulou(Shulou.com)11/24 Report--

For some new car-building powers, the market is still chilling.

Recently, Weima CEO Shen Hui released a full-staff letter saying that in order to cope with financial pressure, it will reduce operating costs through a series of financial measures, including a voluntary salary cut for managers at the level of M4 and above, a 50 per cent basic salary for other employees, cancellation of bonuses such as year-end bonuses, suspension of car purchase subsidies, and so on.

Behind Weima's "reducing the cost for the winter" is the accelerated reshuffle of the new forces of car-building.

According to the data, in November, Ian took the lead in sales of 28700 vehicles, ranking first on the list of new car-building forces. Nezha, ideal, Ulay and Polar Krypton all sold more than 10,000 vehicles, ranking second to fifth, respectively. Ask the boundary, zero run, Xiaopengyue delivery volume failed to exceed 10,000, ranking sixth to eighth respectively.

When it comes to the new power of building cars, no one knows "Wei Xiaoli". Because of its early start, great fame, and all successful listings, Ullai, ideal and Xiaopeng were once called the new forces of front-line car building.

However, dismantling this report card, we can find that in recent months, the pattern of the top three of "Wei Xiaoli" has gradually become a "thing of the past."

Whether it is the new forces of second-line car-building, zero-running to accelerate the counter-offensive, or from the traditional automobile enterprises, such as Ian, Mengjie, polar krypton and other brands, the market pattern of new energy vehicles is ushering in a reshaping.

In this process, some of the new forces of second-line car building advance by leaps and bounds, and many of them leave the scene sadly.

In May, Sailin was put up for auction; in July, Singularity was filed for bankruptcy reorganization; just a few days after Weimar announced the pay cut, Evergrande, which pursues "buy, cooperate, circle, big, good" Evergrande also received bad news. On the morning of December 7, 10% layoffs were announced by travelers, saying that the first model, the NV, could not be delivered in the near future.

For the new forces of second-line car building, "differentiation" means new opportunities as well as new challenges. Around this topic, this paper attempts to answer the following three questions.

1. What kind of development has the new force of second-line car building experienced?

2. What pain points do they have to solve at present?

3. In the face of fierce competition, does the new force of second-line car building still have a chance to break through?

1. Start in the wind "A big collection of new car-building forces, you can count me as a loser!" In 2015, a LOGO collection of new car-building forces frequently appeared in the "moments" of Autobots. Nearly 50 "freshman faces" are put together, which makes some Autobots who have been in the industry for many years say helplessly that they are "foolishly confused".

But among the many new car-building forces, Weimar is definitely a star enterprise with a strong degree of identification.

Shen Hui, the founder of Weimar, is a famous figure in the automobile circle. Before founding Weimar, Shen Hui worked in a number of multinational companies such as BergWarner and Fiat China. In 2010, he led the team to facilitate Geely's acquisition of Volvo and later served as senior vice president and chairman of Volvo Automotive in China.

While some of the new car-building forces are still in the OEM stage, Weima took the lead in investing in a factory in Wenzhou and acquired the production qualification of new energy vehicles through acquisition.

To have talents, qualified Weima will soon become the focus of capital attention. In August 2016, Weimar completed its first round of financing, with a financing amount of US $1 billion, which was the largest round of A financing among the "new forces of car building" at that time.

After getting the financing, Weima has plenty of food. Build a team, pay attention to research and development. After intensive preparation, Weimar successfully completed the mass production delivery of the first model, EX5, in 2018. This time is earlier than Xiaopeng, ideal, etc., and only 3 months later than the delivery of Weilai's first model, ES8.

In 2019, with the advantage of performance-to-price ratio, the Weima EX5 became the top selling model in the power of new cars. From the enterprise level, Weimar Motor is the second highest delivery new car-building force after Weilai Motor.

It is worth mentioning that, apart from Weimar and Wei Xiaoli, those years were the opportunity period for the accelerated development of the new forces of car-building. Nezha, Zero, Aichi, Yundu and other newly created car enterprises have also taken advantage of the situation to compete in the new energy vehicle market.

Compared with Wei Xiaoli, although they have some gaps in financing capacity and brands, they have also stepped through the hurdle of large-scale mass production and delivery, so they are called the second echelon of car-building new forces.

2. Matthew effect in 2020, the situation of Weimar took a sharp turn for the worse. Due to the fire caused by the battery mixed with impurities, the Weima EX5 had spontaneous combustion problems one after another, resulting in a crisis of confidence; at the same time, the second model, the EX6, failed and sales fell short of expectations.

A series of problems caused Weima to stall abruptly in the sales competition with Wei Xiaoli.

In 2020, Weilai, ideal and Xiaopeng delivered 43700, 32600 and 27000 vehicles respectively, while Weima delivered 22400 vehicles in 2020, slowly widening the gap with the first three. In 2021, Weima's annual sales volume was 44200, ranking fifth behind Xiaopeng, Weilai, ideal and Nezha.

More importantly, under the background that "Wei Xiaoli" has been listed in the United States one after another, Weimar failed to seize the beach "Science and Technology Innovation Board New Energy first share" in 2021. In June this year, Weimar formally submitted an application for listing of Hong Kong shares, which has not been followed so far.

According to the prospectus, Weimar's net losses over the past three years were 4.145 billion yuan, 5.084 billion yuan and 8.206 billion yuan respectively, with a total loss of 17.435 billion yuan over the past three years. Weima, which has invested heavily in R & D and sales, is in urgent need of funds to "quench its thirst", but the indefinite future of IPO has made it lose an important way of financing. Therefore, it is not difficult to understand that Weimar finally chose to make a living at a reduced cost.

To some extent, the uncertain future of Weimar reflects the survival pain points faced by some new second-tier car-building forces.

First, financing channels have narrowed. Li Bin, founder of Xilai Automobile, has said that due to heavy assets, large investment, and it is difficult to make a profit in the short term, 20 billion yuan is only a "starting point" for building a car. Abroad, Tesla made his first profit in 2020 after 15 years of losses. In China, "Wei Xiaoli" has not got rid of the loss so far.

In the case of insufficient self-hematopoiesis in the early stage, the new forces of car building still need to support their operation through external "blood transfusion", and the financing ability of enterprises is undoubtedly one of the key factors that determine their success.

However, with the hindrance of global economic development, the enthusiasm of investors to invest in new energy vehicles has receded. Compared with Wei Xiaoli, who first landed in the capital market and tasted the first wave of dividends of new energy vehicles, it is more difficult for the new forces of second-line car building who missed the "window period" to obtain financing.

Many new second-line car-building forces lament that "it is easier to burn money than to find money," and trying to survive has become their top priority.

Second, the transformation of traditional car companies is accelerated to enter the bureau. At present, with the help of scientific and technological research and development, large-scale manufacturing and perfect supply chain, brands such as Ian and Mengjie, which were born from traditional automobile enterprises, are gradually developing their strength in the new energy vehicle market. At the same time, compared with the new forces of car building, traditional car companies have more abundant capital reserves and more financing channels, and they are more favored by funds because of their high certainty.

For example, in October, GAC Ean completed round A financing, with a total financing amount of 18.294 billion yuan, setting a new record for the largest private equity financing in the domestic new energy vehicle industry; on November 17, Lantu Motor announced the completion of the signing and delivery of round A financing agreement, raising nearly 5 billion yuan.

Third, the profitability is weak. The new forces of second-line car building are mostly rooted in the sinking market, the price range of models for sale is low, and the gross profit of vehicle sales is also limited. "small profit and quick turnover" is the secret of their competition. However, in the past two years, the rising cost of batteries and chips has offset the profit space of the vehicle terminal, resulting in the general poor profitability of the new forces of second-line car building, falling into the quagmire of "selling one and losing one".

Relevant data show that in 2021, the gross profit margin of zero running is-44.3% and that of Weimar is-41.1%. Correspondingly, in 2021, the gross profit margins of Weilai, ideal and Xiaopeng all reached 20.1%, 20.6% and 12.5%. It can be seen that although the head enterprises of the new forces of second-line car building have achieved a counterattack in terms of sales volume, the profit problem remains to be solved.

In an interview with the media, Zhang Yong, co-founder and CEO of Naha Automobile, said bluntly that before 2025, Naga cars should reach the annual sales threshold of 500000 units and break even before they can really gain a foothold, otherwise they may be eliminated.

Especially in less than a month, the national financial subsidy for new energy vehicles, which has lasted for 13 years, will officially withdraw from the historical stage. No longer rely on subsidies, new energy vehicles will gradually shift from policy-driven to market-driven, and compete head-on with mainstream traditional fuel vehicles.

Some analysts believe that the withdrawal of the "national subsidy" of new energy vehicles will cause certain cost pressure to new energy vehicle enterprises in disguise. Especially for medium-and low-end models, choosing to increase the price will reduce the competitiveness of the model, and selling price insurance means higher cost. Under the dilemma, the profit test of the new forces of second-line car building will be more severe.

The competition in the future will be fiercer than today. In the next five years, only 5 Chinese brands in the Chinese market may survive, while 6 to 10 may survive, but they will not live well. " With regard to the competition in China's automobile market, Zhu Huarong, president of Changan Automobile, once made such a judgment.

At the beginning of 2020, Wang Xing, founder of Meituan, also predicted that China's automobile market would show a "3-3-3-3-3" pattern in the future-- 3 central enterprises, 3 local state-owned enterprises, 3 private enterprises and 3 new car-building forces.

For the new forces of second-line car building, in addition to obtaining capital market recognition through various ways, the choice of enterprise strategic direction is equally important. According to che Bai think tank, facing the future, there are two directions worth paying attention to.

First, upgrade to the middle and high end. With the sharp decline in the value of double points, as well as the withdrawal of new energy vehicles "national subsidy", the rising cost of batteries and chips and other reasons, the cost of electric vehicles continues to rise. Therefore, upgrading to the mid-and high-end market with higher profits has become a new choice for the new forces of second-tier car building.

Take Zero running as an example. Jing Hua, Senior Vice President and Secretary of the Board of Directors of Zero running Technology, revealed at the financial report meeting that the Zero running T03, as an A00-class car, is difficult to achieve positive gross profit. To this end, Zero tries to adjust the sales structure, improve profitability and enhance brand strength by introducing mid-and high-end models.

One of the most direct proof is that in September this year, Zero launched the C01 model with a price of 193800-286800 yuan, which also means that Zero has entered the medium and large sedan market for the first time.

This year, it has repeatedly declared that it is "focused on doing a good job in the market segment of less than 200000 yuan". It has also begun to announce that it will enter the market of 200000-300000 yuan, with the price of its Nezha S model reaching 199800-338800 yuan.

In the words of Zhang Yong, co-founder and CEO of Naxi Automobile, with the high sales of Naxi U and Naxi V models, the problem of survival is basically solved. The launch of the Nezha S model means that the Nezha car has entered the 2.0 stage.

"whether we can make a profit, whether we can achieve the sprint price of 300000 yuan and whether we can sell 500000 units is the key to the 2.0 era. when the sales of S go up, my gross profit margin will become positive all of a sudden." Zhang Yong said.

Second, in addition to the upward layout, overseas markets may become a new continent of new second-tier car-building forces. The latest sales figures show that in October 2022, the export of new energy vehicles was 109000, a month-on-month increase of 1.2 times and a year-on-year increase of 81.2%. From January to October 2022, the export of new energy vehicles was 499000, an increase of 96.7% over the same period last year.

At present, the new forces are speeding up their process of going out to sea and embracing a broad space for growth. From the European market to the ASEAN market, the new power of car building has been explored in different directions.

For example, Aichi recently signed a strategic cooperation agreement with Thailand's Phoenix EV to reach a procurement plan for 150000 new energy vehicles. It is reported that this is by far the largest cooperation plan for the new forces of Chinese car-building abroad.

There is no doubt that building a car is a survivor game. However, from the division of the new power of second-line car-building, it is not difficult to find that although many people cast a "vote of no confidence" to the new power of car-building, those companies that are not for the purpose of financing and "seriously crazy" to build products and services still have a chance to win.

The new forces of second-line car building need not be too pessimistic, but they must be vigilant and be ready to deal with a new round of knockout stages at any time.

[full text reference]

[1] "looking at the living situation of the new forces in the second line from the storm of salary reduction in Weima", Automobile Commune, Li Sijia

[2] "the new force of second-tier car building that set off a wave of listing on the market, who can smoothly enter the first line? ", Institute of value, Hernanderz

[3] "put down" to catch up with Tesla, zero running needs to increase the program "support", deep dive atom

This article comes from the official account of Wechat: che Bai think Tank (ID:EV100_Plus), author: Cheng Honghe, Editor: a Feng, typesetting: fat Tiger

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