Introduction: The most valuable quality of a brand is to maintain strategic determination, because one can attack and defend, and there are many cards to play.
On July 15th, a 2021 WM Motor mid-year media communication conference with the theme “Embrace the original intention and steadily move forward” was held in Beijing. Facing the question of “lagging behind” from the outside world, WM Motor founder, chairman and CEO Shen Hui did not evade the question. He responded positively in two aspects: Firstly, WM’s sales have doubled, proving that WM is still doing well and has not fallen behind; secondly, the new energy field is a long-distance race, and the strategic determination of WM will ultimately become a leading company.
According to Shen Hui, focusing on the mainstream market and maintaining strategic determination without involving the recently popular micro and mini car market is WM’s current core strategy. In the eyes of the outside world, the market being overtaken by small players like Wei Xiaoli and “Lingna” due to this strategy is also the internal logic that led to WM being “left behind”.
So, is the persistence of WM, and the likes of it, valuable? From the perspective of industry development, the answer is yes. Behind every high point in the development of the Chinese auto industry is a focus on and persistence in strength, such as Geely Emperor, Great Wall Haval, BYD new energy vehicles, etc. Even the closest new forces to WM, have also demonstrated the quality of sticking to their strategic plan.
Looking back at the development of the three companies under Wei Xiaoli, maintaining strategic determination has been the key to their current achievements, including NIO being initially questioned about battery swapping, Ideal being questioned about extended range, and XPeng being questioned about intelligent play. But under their persistent efforts, these have already become their core competencies.
Therefore, for WM’s strategic determination in the mainstream market, short-term pressure may be faced, but the long-term prospects are undoubtedly favorable.
Without strategic determination, there is no future
The new forces in car-making, which started in 2014, have mostly died out, but nearly 10 have survived. If you ask about the best qualities of these surviving new forces, none can compare to their strategic determination.
Three years ago, at the NIO headquarters in Anting, Shanghai, when asked by this journal’s reporter about why they persisted in the C-end market against the trend and did battery swapping, Li Bin said, “Battery density is not good enough, the electric vehicle’s range is not enough, to solve NIO users’ range anxiety, the energy supplement problem must be solved, there is no other way.”
Similarly, three years ago on the brand day, He XPeng said, “In the future, the most important thing about smart cars is operation rather than manufacturing itself.” Unexpectedly, He XPeng’s perseverance and thinking on intelligent cars actually led to doubts from the industry about XPeng’s adherence to their intelligent strategy.Last year, Li Xiang vented his anger towards the industry’s extended range technology, accusing the technicians of being a group of people who lacked “user thinking” and completely ignored the interests of the users. He mocked their research of technology routes, saying it’s all nonsense. As the representative opposing voice against extended range technology in the industry, CEO of Volkswagen China, Feng Sihan, challenged Li Xiang by calling his ideas the worst, environmentally-unfriendly, and nonsense.
As for WM Motor, the reason why it is facing industry scrutiny today is that its sales not only lag behind Wei Xiaoli but also have been overtaken by two other emerging brands in the 150,000 to 250,000 yuan mainstream intelligent electric vehicle market. With subsidies decreasing, this market is rapidly shrinking.
Every automaker will face challenges in their development; traditional car manufacturers like Volkswagen and Toyota have the task of transforming, while emerging brands such as NIO and WM Motor have the desire to survive. It is difficult to judge which decision each automaker made in the face of the changing times was right or wrong. The market and users are the only ones who can make such a judgement.
Speaking of why users choose NIO, Shen Fei, vice president of the power management division at NIO, stated, “Many users tell us that the reason they chose NIO is because of our battery swap mode.” He added, “Many Chinese drivers cannot install home charging stations, and battery swapping has become our core competitiveness.”
On July 9th, the first NIO Energy Day was held in Shanghai. This was not an ordinary press conference. This time, NIO’s battery swapping station has been upgraded to the second generation, and NIO’s battery swapping network has also begun to expand from domestic to foreign markets. Li Bin’s persistence in battery swapping has not only been recognized by consumers but also continues to grow.
XPeng and Li Xiang are the same as NIO. Although their intelligent strategy was questioned before, it cannot be denied that XPeng is now a representative of Chinese intelligent car brands, and its high-end flagship model, P7, has sold nearly 5,000 units in July, while G3 and P5 have also become strong players in their respective sub-markets.
As for Li Xiang’s ONE, it sold 8,000 units in June and has become one of the world’s best-selling high-end hybrid cars. Seeing the success of Li Xiang’s ONE, brands such as Sitech, Voyah, Tianji, Neta, and LeapMotor have all put in more effort into extended range technology.
It is not difficult to conclude that although these three emerging brands were scrutinized in the early stages, they were not distracted by external noise, but rather refined their craft in their chosen fields with users as their main objective, ultimately winning the favor of users and the recognition of the industry.
As for WM Motor, if it persists in its user and market orientation, its achievements may be greater than those of the previous three. This is because WM Motor’s mainstream intelligent electric vehicle market can be seen as the entry-level market for current intelligent electric vehicles, positioning itself similar to the traditional A-level car market. The market prospects are undoubtedly unlimited.
The battle of intelligent cars has just begun, and it is too early to talk about dropping out.
有人可能会问，为什么威马不跟哪吒、零跑一样，发力小微型车市场，把量做起来，先活下去，然后再谈梦想？客观来说，这确实是一个务实的选择，但却不是明智的选择。
Global Auto Chairman and CEO, veteran marketer Wu Yingqiu recently summarized the transformation of the century-old automotive industry, stating that “new four modernizations + sustainability are restructuring the auto order.” Indeed, without the new four modernizations, there would be no Tesla, NIO, and other cutting-edge companies, nor would traditional giants such as Volkswagen and Toyota be eager to come back and win.
Different from NIO’s pursuit of high-end brands, WM Motor hopes to find opportunities in the mainstream market. However, just like Geely’s struggle in the A-level car market years ago, WM Motor can also capture a share of the smart electric vehicle entry-level market flawlessly, but this requires a deep accumulation.
The micro-car market has already exploded, while the mainstream market is still waiting to be excavated, making it difficult for every new force to choose. For Shen Hui, he has been involved in the fuel car market for many years, and breaking through from the micro-car market like Chery is not what he wants, but breaking through from the A-level mainstream market like Geely is his obsession.
From an enterprise perspective, it is more important to follow the original intention from the past and not change direction abruptly. The above-mentioned Wei Xiaoli is a typical example of this. For every company, especially startups, resources are limited, and the most effective strategy is not to invest in scattered ways but to maintain strategic determination.
Regarding the strategic choice and future of WM Motor, Shen Hui said, “We are not wavering in our strategy, focusing on products, focusing on mainstream smart electric vehicles, and technology popularization. It may be a little quieter in the short term, but in the medium and long term, we can become a leading company, and we are very confident of that.”
Shen Hui’s words actually remind us that we are still in the early stage of the development of smart electric vehicles. If 2015 was defined as the first year of China’s new energy vehicles, then 2020 is considered the first year of China’s smart electric vehicles by industry insiders.
Therefore, the future of smart electric vehicles, how the pattern will change, and which company will finally come out on top are all unknown. Similarly, since the development of smart electric vehicles is still in its infancy, it is somewhat arbitrary to declare that WM Motor is lagging behind.
In fact, if we compare WM Motor’s sales performance longitudinally, its performance is still good. According to official data, WM Motor sold 4007 new cars in June this year, a year-on-year increase of 127.1%, and its sales in the first half of this year totaled 15665 units, a year-on-year increase of 103.8%. Therefore, WM Motor’s development is still in a period of rapid growth.
In addition, if we make a horizontal comparison of the sales of “Lingrao” and “NETA,” we will see that WM Motor’s sales have more “value.” In June, WM Motor had 3723 insurances, with EX5 accounting for 3250 units of sales, while Zero Run had 3905 insurances, and T03 had 3792 units of sales. On the other hand, NETA had 4587 insurances with NETA V accounting for 3576 units of sales.Yes, although the performance of “Lingna” and “NETA” terminals has surpassed that of WM Motor, their core strength lies in low-end products. As for WM Motor itself, its sales volume is quite good, especially its EX5-Z, which has taken the lead in the 150,000-level smart electric vehicle market, giving WM Motor more strategic flexibility, even though its sales volume has been surpassed by the two aforementioned companies.
Regarding market performance, Shen Hui candidly stated that “compared with some companies with higher overall sales, our network layout is relatively small, and our speed of launching new products is not so fast. It is not easy to achieve sales growth of ‘doubling compared to the same period last year’.”
Therefore, for WM Motor, which has finally broken through the qualifying competition, it may be worthwhile to let the bullet fly a little longer and give it more time. The most valuable quality for a brand is to maintain strategic composure, because it can attack as well as defend, and there are still many cards to play.
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.