Author: Mr.Yu

Chinese people have a characteristic when doing business: they love to gather together.

Do you remember in 2015 when Chongqing hot pot became the keyword of Beijing’s catering industry and more than 3,000 hot pot restaurants opened in the city in less than a year? In 2016, there was another trend: the beef hot pot from Chaoshan had not yet established itself in the city, but the industry price for a skilled meat slicer had already soared to an average of 30,000-40,000 RMB per person.

Today, it’s hard to say what’s trending anymore, as the market competition weeds out the weak everywhere.

According to a research report by a certain brokerage, there are more than 300 companies in China that have entered the field of new energy vehicles in various forms. In the fierce competition, only 1% of the players can enter the next round of the game. If a new player fails in the first one or two car models, they are likely to be eliminated.

To enter the top-tier companies, not only do they have to have good delivery data, but also clear product positioning and target customer positioning.

However, the gap between WM Motor and NIO, Xpeng, and Li Auto is widening as top-tier players.

Through the WM Mid-Year Media Communication Meeting last week, we see more complex information in addition to the firm commitment represented by the theme of “Embracing the Original Intention and Moving Steadily Forward.”

Shen Hui’s Unwillingness

Let’s rewind four months ago.

Before the 2021 Shanghai Auto Show, WM Motor’s third mass-produced car, the W6, was launched. The W6, touted as “the first mass-produced L4 autonomous driving car,” is equipped with Baidu Apollo’s intelligent driving product–Navigation Pilot and autonomous parking AVP (Apollo Valet Parking)–it is a pure visual L4 level city navigation assisted driving.

WM Motor’s founder, chairman, and CEO, Shen Hui, said on stage that “WM Motor must fight to the death.”

This determination is not only reflected in the partnership with Baidu to launch the L4 autonomous driving car, but also in WM Motor becoming the first car company in the industry to promise that the responsibility for an autonomous driving accident will be borne by the automaker.

As a media outlet that has been focusing on intelligent vehicles for a long time, we were originally pleased to finally see a car company that is actively taking on the responsibility of being the main body for AI technology application. We even imagined whether it could set a technical ethics paradigm for the industry. However, the bland reaction from the industry media and the industry community, and the sarcastic comments in the knowledge community have dampened our excitement:

We must admit that the vision is good and the responsibility is good, but there are not many car companies that dare to make such a promise.

We can see that Weima’s commitment today seems more like a statement to the industry, the market, and the users – it is also a statement of one’s own determination. Like the famous “those who face the enemy all stand in front of the battle line” mantra of the Japanese Warring States period ninjas, it reminds oneself of the determination to be on the battlefield at the spiritual level.

Weima is the first among all new forces to release products and deliver them in mass production. Founder Shen Hui has also held management positions in the energy industry, car company supply chain, and even Senior Vice President of Volvo Automobiles and Chairman of the Board for the Chinese region. With almost complete understanding of the entire industry chain, Shen Hui should know where the smooth roads are and where the pitfalls are.

But precisely because he knows too well, Shen Hui chose to start from scratch. Starting from scratch in the reform period of a traditional manufacturing industry with one’s own efforts, the difficulty can be imagined.

According to the latest data released by the China Association of Automobile Manufacturers, Weima sold 4,007 vehicles in June 2021, a year-on-year increase of 97.6%. The sales in Q2 of 2021 were 10,116 vehicles, a year-on-year increase of 105.6%. The cumulative sales in the first half of 2021 were 15,665 vehicles, a year-on-year increase of 103.8%.

It looks pretty good. However, compared with “We Xiaoli” in the same first echelon, it doesn’t seem so eye-catching. The data shows that in the first half of this year, Weima brand had a cumulative sales of 15,665 vehicles, while NIO, XPeng, and Ideal had sales of 41,956, 30,738, and 30,154 vehicles respectively.

On the other hand, Weima’s most popular main model is still the “first ever hot-selling model” Weima EX5, which was launched in April 2018. Currently, the Weima EX5 has been the champion of new forces’ single model sales for 20 consecutive months, and became the first hot-selling model among new forces with a cumulative sales of over 50,000 vehicles in April this year.

This data looks good. The follow-up performance of the W6, which has been highly anticipated by WEY, remains to be tested by the market.

No wonder this veteran of the automotive industry emphasizes “WEY must fight to the death.”

In Chinese history, more than one military commander who attempted to recreate military miracles by bearing down while being surrounded and overcoming difficulties through perseverance, similar to the way Xiang Yu did, but only a few succeeded.

After all, the essence of miracles is a small probability event caused by many factors interacting with each other, rather than a realistic projection of human subjective will. It cannot tolerate one-sided idealism.

The anxiety of WEY

Mr. Yu had a good friend working for a leading international luxury car brand, who under various circumstances chose the WEY EX5 500 Extra Innovative Edition as his own car.

“Do you have any concerns about your car?” Mr. Yu asked him during a casual chat.

“To be honest, when it comes to the car itself, I have no problem with the range, driving feel, and so on. The aftersales service here for WEY is in partnership with the DAS group, which is a well-known brand, so I have no worries about that. But these new energy vehicle brands have sales that are not as high as traditional fuel vehicles. What if the funding chain breaks someday, and the after-sales service and parts supply are not reliable, where can I get help?”

In the era of the experience economy, business is no longer a simple model of you selling me buying without any connection. The concerns of this friend represent the voice of some new energy vehicle owners regarding new players in the automotive industry.

Even for Haidilao, the first stock in China’s catering industry, the core competitiveness is not the service experience that people enjoy most, but the human resources system mentioned by founder Zhang Yong, which is, in other words, the loyalty of employees to the corporate spirit and the belief in the value of “changing fate with two hands.”

In other words, what is WEY’s core competitiveness? Who is the target audience?

Is it the vision that has been emphasized since the inception of WEY to “create smart electric vehicles that are affordable and enjoyable for consumers?”

“Our difference with NIO is that we are not about expensive domestic brands. Compared to smart phones, we are like OPPO, vivo, and Huawei,” said Shen Hui, founder, chairman, and CEO of WEY.

• NIO has targeted the high-end passenger car crowd and invested heavily in the ongoing promotion of their charging and swapping system, service system, and even upgraded their own lifestyle brand.- OPPO and vivo have clear product strategies, a huge offline channel, and precise marketing targeting young people.
• Huawei has a strong technical innovation system, a healthy funding chain, and an open developer ecosystem.
• WM Motor, positioned in the 150,000-250,000 yuan market, aims to be the Toyota and Volkswagen in the fuel vehicle market. However, even in the fuel vehicle market, this segment is fiercely competitive.
• “We have a big advantage over all the new forces in this team because we have experienced the bloody battle of the gasoline car wave,” said Shen Hui, who has a rich background in the automotive industry.
• WM Motor has established a “three-step” strategy from the outset:
  1. Creating smart electric vehicles;
  2. Building a full-cycle R&D system for smart electric vehicles;
  3. Establishing a new energy intelligent mobility ecosystem.
• We cannot simply answer the question of which step WM Motor has reached currently in the eyes of Chinese consumers who pursue brand recognition and value. As a durable and bulk consumer product, the most unacceptable feature of a car is having no feature.
• The spacious and comfortable IDEAL ONE has won the favor of many family users; the Wuling Hongguang MINI EV is dubbed by many young car owners as “particularly easy to maintain”; and Great Wall’s ORA Black Cat has accurately positioned itself as a new energy vehicle model for young female users in terms of aesthetics and practicality.
• WM Motor, led by Shen Hui, has always emphasized that it is not an internet carmaker. As several industry insiders have told us, WM Motor’s performance from online marketing to offline sales still resembles a relatively conservative traditional car company.
• However, this is an era that values traffic, and what the internet can bring to a business far exceeds that of sticking to tradition.
• This is consistent with the logic of the start-up team from the host plant background, and it indirectly proves why WM Motor has made self-built factories a top priority from the very beginning.# WmAuto’s Public Listing

WmAuto’s two self-manufactured smart factories, Chengdu’s global research and development center, and the construction of the Mianyang battery factory are still in need of a large amount of funding to maintain the healthy operation of the business chain. While watching Wei Xiaoli’s three companies’ gross profit margins have turned positive and have escaped the embarrassment of buying one and losing one, WmAuto’s concerns about its own capacity for self-financing and the PTSD of being a “man still here, but no money” entrepreneur cannot help but become the biggest anxiety.

Therefore, accelerating the pace of going public has become the best solution for WmAuto to get rid of its financial difficulties. Shen Hui admitted that the “financiers understand WmAuto very well, and they pointed out that one of WmAuto’s problems is that its actions in the capital market are a bit slow.”

“Because some work is currently being done in the capital market, according to the rules, we are in a silent period, and we cannot decide on these capital factors, so the information we share externally will be relatively scarce,” Shen Hui responded to the outside world’s doubts about the decreasing noise of WmAuto at last week’s media communication meeting. Shen Hui said that the new car game is still in the first 15 minutes of the match and has not yet reached the point where the victory or defeat is determined.

At present, the orders for WmAuto W6 have exceeded 10,000, which has made Shen Hui somewhat pleased.

As one of the highlights of WmAuto W6, the installation of HAVP parking function can achieve low-speed L4-level automatic driving within the region. After the user completes a parking process, the vehicle will remember the route. When the user drives into the parking lot for the next time, he/she can get off at a convenient location and use the mobile APP. WmAuto W6 can complete the parking process according to the previous route by itself.

In the fourth quarter of this year, WmAuto will also upgrade the PAVP high-precision map parking function through OTA. Based on the high-precision map, the vehicle can achieve unmanned parking even without studying the route. The first batch of open parking locations includes Beijing Wucailou, Beijing Cuiwei Yingxiangcheng, Chengdu Dayuecheng, Shanghai Zhongshengshijie Square, and Shenzhen Xinghe Coco Park, totaling five parking lots.

In our opinion, while it is good to solve parking problems from a technical service perspective, before the commercial model of automatic parking becomes clear, AVP can only be regarded as an added value to the product, rather than the core competitiveness.

However, these do not affect smart car users’ high expectations for improving parking efficiency.

In addition, WM also confirmed the existence of a new model, the WM E5 – a pure electric sedan for the travel market that will be launched in the second half of the year.

Shen Hui stated that in the future, some young users will no longer buy cars. Therefore, WM launched products targeting the travel market to serve this group. The WM E5 is the first product for this market.

To distinguish different product lines, WM announced the launch of a dual-logo strategy. The prototype logo is aimed at the travel market, while the rectangular logo is aimed at the individual market.

In our view, Shen Hui’s appearance is more like a small-scale brand upgrade and new product preheating launch event than a “setting the record straight” response to the rumors of being left behind. Based on the product plan released during the event, WM seems to have abandoned the plan to gradually achieve a three-step strategy and is instead focusing on being the pioneer of new energy vehicles while laying out the travel market in advance.

Early action is in line with our understanding of Shen Hui and the WM brand.

During the media communication session, we noticed that compared to the spirited Shen Hui when he founded the WM brand, his hair has turned white at a heart-wrenching speed.

Final Words

Shen Hui’s English name is Freeman Shen.

There are two other famous people with the same name: one is the Hollywood veteran Morgan Freeman, and the other is the protagonist of the famous sci-fi game IP “Half-Life,” Dr. Gordon Freeman, wielding the “physics sword” (crowbar).

Freud believed that dreams were the fulfillment of people’s suppressed desires that could not be realized in reality.

Mr. Yu agrees with this view: every good dream is usually related to flying up and down, while nightmares are usually about exams during adolescence.

Shen Hui, who has a background in South China University of Technology and UCLA, surely does not have Mr. Yu’s concerns. This industry veteran probably just wants to be a true “Freeman” in the wave of new car manufacturing.# Keep, the fitness platform, has a well-known slogan among marketers: “Discipline gives me freedom”.

Will Shen Hui, who was once like a ascetic, and his company, WM Motor, be able to achieve the ideals of “freedom in car-making” and “freedom in travel” in the current era?

Only time will tell.

This article is a translation by ChatGPT of a Chinese report from 42HOW. If you have any questions about it, please email bd@42how.com.