Nezha car, a misunderstood counter-attack story

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In the just-released July sales ranking of new forces, Nezha Auto topped the monthly championship for the first time with over 14,000 units. In the first seven months of this year, Nezha sold more than 77,000 cars, ranking second in the total sales list of the new car-making force this year.

Even so, the Ne Zha brand and its helmsman still lack a presence at the mass level. The price of Nezha’s main model is around 100,000 yuan. It is not high-end, not high-tech, and lacks a label that makes consumers remember.

When Zhang Yong is mentioned in the business world, people will think which Zhang Yong is: Zhang Yong of Ali? Zhang Yong from Haidilao? “Oh, Nezha’s Zhang Yong”, he was not the first option that jumped out.

Founded in 2014, Nezha was unknown for many years before it attracted the attention of the auto industry with its sales growth.

The core team of Nezha is all from traditional car companies. Hezhong New Energy, the parent company of Nezha, was founded by Fang Yunzhou, the former deputy general manager of Chery New Energy. CEO Zhang Yong joined in 2018. He is Fang Yunzhou’s old colleague at Chery. Before coming to Nezha, he was in charge of sales at BAIC New Energy. Nezha’s co-president, CTO, general manager of the design center and other middle and high-level executives in charge of production also come from Chery, BAIC and FAW.

Investment institutions are not optimistic about companies with the background of traditional car companies making smart electric vehicles. Nezha has difficulty in financing in the early stage. Before 2021, Nezha has received a total of less than 7 billion yuan. At a dinner party in April 2020, Zhang Yong half-joked to Li Bin: Weilai is miserable, and it is famous anyway, no one knows that we have been miserable all the way.

Today, Nezha’s sales growth is regarded as a counterattack. The Nezha team doesn’t think so. They felt that Nezha just “survived” and was not out in the first knockout round, which was not a success.

There is no drama in the way of survival: the turning point of Nezha happened in 2020 after Nezha U and Nezha V were launched one after another, especially V sold well. The V is priced at around 80,000 yuan. Most of the cars at the same price are like an upgraded version of the old man, while the V is a small SUV. It uses the strategy of “big car to hit small car” to capture the size and cost-effectiveness that consumers are most concerned about in this price range.

The Nezha team correctly reused the experience of traditional car companies and did what it should do, selling cars to familiar people in the familiar 100,000 range market. As the penetration rate of new energy vehicles increases, the situation will approach the automobile consumption market, and cheaper and more cost-effective vehicles will be sold more.

In June this year, Nezha released the coupe Nezha S based on the new car platform. The limited edition with scissor doors was unveiled first, with a starting price of 338,800 yuan. Last Sunday, Nezha released a non-limited version of the S. Among them, the lowest starting price of the extended-range electric vehicle with a 310-kilometer range is 199,800, and the most expensive 715-kilometer LiDAR version is priced at 319,800.

Xiaopeng’s transition from G3 to P7 is an example of going up, but the jump is smaller than that of Nezha. The starting price of the P7 is nearly 41% higher than that of the G3. Compared with Nezha V, the starting price of Nezha S has increased by 150%.

Compared with companies such as Wei Xiaoli who are also still at the poker table, Nezha and Zhang Yong have been using extremely limited resources to survive in extremely small gaps. What’s more difficult is that now they are still trying to go to the mid-to-high end and grow bigger, not only to survive in the gap, but also to turn around continuously.

Whether a car with a price of 200,000 can be sold well will determine the second half of Nezha’s story: is there a greater possibility for a new company emerging from the traditional automobile industry after surviving?

not favored

Nezha is one of the first new carmakers in China. Its parent company, Hezhong New Energy, was founded in October 2014. Before the sales growth attracted attention, Nezha was almost unknown for the first six years. (For the convenience of reading, Nezha is collectively referred to as Hezhong and Nezha brands below.)

A lot happened in the year Nezha was born: Tesla officially entered China, Weilai and Xiaopeng were established, and Jia Yueting announced that LeEco would be a car.

The liveliness is someone else’s, Nezha has been out of the spotlight, and it was difficult to obtain capital support in the early days.

People who believe that smart electric vehicles are a new species will vote for Weilai, Ideal, and Xiaopeng, and the unfortunate ones vote for LeTV. These founders are serial Internet entrepreneurs who have helped VCs make money, making it easier to get investment.

I hope that the money for hedging the Internet to build cars will also have a better destination. For example, Weimar and later Byton and Gaohe, the founders of these companies came from higher-end brands such as Volvo and BMW.

Fang Yunzhou, the founder of Nezha’s parent company Hezhong, and the original core team all came from Chery. Fang Yunzhou has worked in Chery for 15 years and was a member of the “Clean Energy Vehicle Special Group” established by Chery in 1999, which is one of the earliest new energy vehicle projects in China. Chery is an early bird in China’s new energy industry, but it produces about 100,000 mid-to-low-end models all year round, and its total sales have continued to decline since 2010, and it is no longer the first echelon of its own brands.

It is not easy to get VC money, Nezha chose to take the local government’s money and sold a large share. In Nezha’s first round of financing, the Tongxiang government, a county-level city in Jiaxing, Zhejiang, invested 75% of the shares, and the founding team’s equity was only 15%. Zhang Yong responded in June this year that the management team of Nezha holds about 20% of the shares. In comparison, Li Bin holds 10.6% of Weilai, while He Xiaopeng and Li Xiang both hold more than 20%. But the latter three raised a lot more money than Nezha.

There is more share dilution and less share of the founding team. Many investors do not like this shareholding structure and believe that the company’s core management is not deeply bound to the company’s interests. This brought more financing twists and turns.

At the end of 2017, Wang Wenxue, the founder of China Fortune Land Development, who is good at real estate projects in the park, obtained 53.4% ​​of the shares of Nezha’s parent company with personal funds and became the controlling shareholder and chairman.

The chairman of the board with a background in real estate failed to give Nezha extra points. Throughout 2018, Nezha met with more than 200 investment institutions and did not receive new financing. Even if it is so cheap – Wang Wenwen only spent 330 million yuan to acquire more than half of the shares, and it can be calculated that Nezha’s total valuation at the end of 2017 was about 600 million yuan. At this time, the valuations of Weilai, Xiaopeng, Ideal, and Weimar have reached around US$5 billion.

The cards are not good, Zhang Yong joined Nezha in February 2018. He told LatePost that it was a decision made in 2017. Since Fang Yunzhou started his business, he has met with Zhang Yong from time to time, “drinking and chatting together”.

Zhang Yong has a slender body, and his slender eyes are arranged in a slightly downward-pointing figure-eight shape, a bit like the middle-aged version of Li Ronghao. He entered the automobile industry after graduating from university in 1996. He worked in a company in Shandong for R&D for the first two years. In 1998, he joined Beiqi Foton and turned to sales. Since then, he has been responsible for sales in Chery and BAIC New Energy for many years.

In 2017, BAIC New Energy, where Zhang Yong worked, sold 100,000 vehicles a year, ranking first in China. He feels that continuing to be a professional manager is repetitive work.

“I can’t be the top one either.” Zhang Yong said that starting a business and letting one thing go from zero to one will give you a more sense of accomplishment.

Fang Yunzhou can give Zhang Yong enough space. The two are old colleagues and trust each other. Zhang Yong said that if they go to a new place, it takes time to get in touch and speculate on each other’s thoughts. “That thing can’t be done.” Since joining, Zhang Yong has been solely responsible for day-to-day operations.

Four months after Zhang Yong joined, Nezha’s first car, N01, was released in June 2018, and the Nezha brand was officially born. Zhang Yongqi’s “Nezha” received mixed reviews, some thought it was novel, some thought it was not like a car brand, and most agreed that it was easy to remember.

Nezha, a veteran entrepreneur, is no faster than a novice, and the N01 started delivery in October 2018. The brands delivered in the same year include Weilai, Xiaopeng and Weimar, which were established in the same time as Nezha.

N01 sales are not bright. From the start of delivery to the end of the year, 1,000 units were sold in 2 months. NIO, which started delivery in June 2018, sold 11,000 vehicles that year, and nearly 4,000 WM Motors, which were delivered at the same time as Nezha. In front of Ne Zha are Yundu, Xinte, and Dianca.

In the ocean of cars in the price range of 100,000, the sales of N01 are even a drop in the ocean. That year, China sold more than 28 million cars, of which 33.5%, or nearly 9.4 million, were between 50,000 and 100,000.

The sales structure of N01 is also not good, with half of the cars purchased by taxi companies, rental car companies and local governments. The outside world associates this with Zhang Yong’s BAIC New Energy experience. One voice is that he fell into the sales inertia of using the B-end to rush sales. The high proportion of the B-end is an important reason why BAIC New Energy once led the sales, but lacked stamina.

At the end of this year, because the main business of real estate was in crisis, Wang Wenxue withdrew from Nezha, and the shares were transferred to the government of Yichun, Jiangxi. Another “not optimistic” and not enough market-oriented proof.

Zhang Yong once recalled the market’s view of Nezha at that time: “From people, funds, past experience, and shareholders behind you, none of you have enough signs of success.”

not counterattack

With poor financing, Nezha must survive with limited resources.

In the process of developing the N01, Nezha obtained the automobile production qualifications from the National Development and Reform Commission and the Ministry of Industry and Information Technology in 2017 and 2018, respectively, and mastered the production qualifications by himself, which costs less but the speed is relatively slow. Other car companies with more money choose to acquire existing production capacity to obtain qualifications and exchange money for time.

Relying on the funds and support of the Tongxiang government, Wang Wenxue and other investors, Nezha built the first factory in Tongxiang, which started construction in 2016 and started production in 2018. By the time this work was completed, Nezha had raised only slightly more than 3 billion yuan in total.

N01 failed to make an instant hit, it just sold some, and did not directly sentence Nezha to death. However, the quality performance of N01 is relatively stable, and there is less turmoil that plagues its peers, which gives Nezha the potential to survive.

NIO recalled 4,803 NIO ES8s in 2019 due to battery fires. Ideal recalled 10,469 Ideal Ones in 2020 due to the “broken shaft” incident. In October of the same year, four spontaneous combustion incidents occurred in the WM Motor EX5, and WM Motor subsequently recalled 1,282 EX5s. Nezha has not seen a similar mass recall.

The shortcomings of N01 are also obvious: the selling point is vague, and the root cause is the positioning problem. This is the strength of Zhang Yong, who has been in charge of sales for many years and understands the needs of car buyers in the 100,000 yuan low-end market.

After Zhang Yong joined Nezha, the key work was to define the follow-up models. From the second half of 2018 to 2019, Nezha completed the development of Nezha U and Nezha V. The two cars will be released in March 2020 and November 2020, respectively.

The launch of the two new cars, especially the Nezha V, was a turning point in the development of Nezha.

Before that, Nezha struggled to survive, supported by the not-so-ideal N01. Throughout 2019, N01 sold a total of more than 10,000 units, ranking fourth in the new force, but it was more than 6,000 behind the former Xiaopeng, and the number one Weilai was more than twice that of Nezha. During this period, Nezha still needed to invest in the development of new cars, and the shortage of funds continued. Before the launch of the U and V new cars, Nezha raised a total of less than 7 billion yuan.

China’s new car-making forces are also going through tough times in the industry. The stock price of NIO, the industry leader and the earliest IPO, fell to a freezing point of $1.32 in September 2019. The capital chain was almost broken, and negative public opinion was engulfed. Nezha is equally miserable, but no one cares.

At a dinner party in April 2020, Zhang Yong half-joked to Li Bin: Weilai is miserable, and it is famous anyway, no one knows that we have been miserable all the way.

After V went public at the end of 2020, Nezha itself and the environment changed.

The V is the key model for Nezha sales to take off. On the surface, V and N01 have similar positioning. They are both A0-class small SUVs. The starting prices are also the same, but the sales volume is very different.

The change lies in a sharper insight and expression of “value for money”.

The core of cost-effectiveness that V captures is “big car to small car” and dislocation competition. Invited by Fang Yunzhou, the general manager of the design center who joined Nezha in 2018, Chang Bing, comes from FAW Hongqi and has designed a review car. He thinks it’s harder to design a classic economy car than a luxury car. Chang Bing told “LatePost” that Zhang Yong will not participate in the specific details of the product, and he is responsible for giving the general direction and definition of the product. When doing U and V, Zhang Yong’s most concerned indicators are level and size.

In the price range of 70,000 to 80,000 yuan for Nezha V, most electric cars are miniature cars like Changan Benben and Chery Ant, which look like an upgraded version of “Old Man Le”. The Nezha V is a small SUV with a length of 4 meters, which is significantly larger than other cars at the same price, 20cm longer than the N01, and has more riding and storage space.

Picture: Nezha V (left) and Chery Ant (right)

To realize the big car and the small car, the path is to manage the supply chain and control the cost. Nezha does not have the resources to burn money to sell cars, and the cost comes from trade-offs.

The whole Nezha U series sold from 117,800 is equipped with an electric trunk. This configuration is an optional or high-end feature in U’s main competitors such as GAC Aian Y and BYD Yuan Plus. Frameless doors, hidden door handles, etc., which are commonly used in “electric vehicles”, also do not appear on the U and V, which pursue practicality rather than “like electric vehicles”.

The screen resolutions of V and U are only 720P, and they do not have much intelligent capabilities, which are not the most urgent needs of consumers in this price segment.

In terms of sales strategy, Zhang Yong chose the uncommon “vertical switching”: that is, once V is listed, N01 will be delisted immediately, leaving no transition time.

Zhang Yong came up with the idea at a regular meeting of presidents before V was released. Many management think this is difficult: what about the old supply contracts? What about purchased parts? How to explain to the sales channel? How to protect the after-sales spare parts of customers who have purchased a car? A bunch of problems to deal with. The company also has to bear the loss of buying more parts.

Kong Fanlong, co-president of Nezha in charge of production, used to be the head of the painting technology of FAW Car Company, and later served as the head of the production management department at Chery. Kong Fanlong recalled that the situation at that time was “very urgent and troublesome”.

For Zhang Yong, this is not a difficult decision. The cost and benefit are clear: N01 is relatively outdated and no longer suitable for representing Nezha. For Ne Zha, who was short of money and voice at the time, producing fewer cars was also beneficial to supply chain management and cost reduction.

“If only V can be sold for 5,000, and V and N01 together can be sold for 6,000, I will only sell V.” Zhang Yong told LatePost.

Deliveries of the V began in November 2020, with 1,337 units sold in the first month and 3,846 in the sixth month. Nezha’s total monthly sales also exceeded 4,500 units that month, making it the first time to enter the top three of the new forces.

Building channels in the main market of around 100,000 is what Zhang Yong is good at. In low-tier markets, traditional agency channels such as 4S stores can be used to quickly spread; in first- and second-tier cities, direct sales models are adopted, and they can enter shopping malls to increase exposure. There is a clear distinction between Jing and Wei, and there is no fight between channels. Zhang Yong once said in an interview that if a city has both direct management and agency, conflicts will arise, and it will be difficult to get through.

By the end of 2021, Nezha Auto has 331 offline channels, including 70 directly-operated stores and 261 urban partner franchise stores. Among them, 57 directly-operated stores and 125 franchised stores are newly opened in 2021.

With the expansion of sales, the proportion of B-end sales that Nezha was not optimistic about in the past has been diluted. In November last year, Zhang Yong disclosed that Nezha’s C-end users had reached 91%, and the proportion of direct sales to B-end customers such as taxi companies was 9%, slightly lower than the industry average of 12% according to the statistics of the Passenger Federation.

At the same time that V went public at the end of 2020, the industry environment has changed dramatically.

With Wei Xiaoli out of the trough, the stock price hitting a new high and the penetration rate of new energy vehicles rising rapidly in 2020, it has nearly tripled, and more people and money have accelerated to enter the game.

Some people choose to do it themselves, such as Xiaomi and Niu Chuang; some people choose to cooperate, such as Baidu and Geely’s Jidu, Huawei and Xiaokang’s Celis; some people consider investing, and Zhou Hongyi, the founder of 360 who once failed to make mobile phones, is one of them. .

From the end of 2020 to the beginning of 2021, Zhou Hongyi began to look for specific investment targets. The 360 ​​investment team sorted out several new car manufacturers that have mass-produced except Wei Xiaoli, including Gaohe, Leapao, Nezha, Weimar, etc. After the Spring Festival in 2021, Zhou Hongyi visited these companies intensively.

People close to the transaction told LatePost that Weimar was excluded due to high inventory; Zhou Hongyi had been in contact with Leaprun in 2018 and was dissatisfied with Leaprun’s first product, and behind Leaprun already had security giant Dahua this important shareholder.

360 and Nezha need each other. With the increase of car software functions and the popularization of car networking, cars have become an important scenario for network security. Nezha needs money and wants to be endorsed by the Internet.

Zhou Hongyi recognized the work philosophy and product positioning of the Nezha team. In a recent interview with “Chinese Entrepreneur”, he said that he and Nezha’s team hit it off right away, “Nezha spends the least, I believe in doing more with less.”

Zhou Hongyi told “LatePost” that when he was considering investing in 2021, he took two Nezha cars for a test ride. The first feeling when he sat in the back row of the U was that the space was about the same size as his own Toyota domineering SUV; Zhou Hongyi was deeply impressed: “The domestic oil trucks costing 60,000 to 70,000 yuan don’t even have airbags, let alone install a big screen for you.”

Before the Shanghai Auto Show in April 2021, Zhou Hongyi is more inclined to Nezha. Nezha invites 360 to become the second largest shareholder. The 2.9 billion yuan investment announced in June last year is to protect the position of the second largest shareholder. People close to the deal said it exceeded Zhou’s initial investment expectations, but he agreed.

After 360, Nezha has successively received investment from well-known industrial parties and institutions such as CATL and Ping An. Last year, the total financing amount was nearly 10 billion yuan, and the capital situation has been greatly improved.

Nezha also began to address the shortage of core team shares in its shareholding structure. 360 issued an announcement in June, giving up the 1 billion yuan quota that had not been actually invested in the 2.9 billion investment, and transferred 3.532% of the equity to the other two funds. The market interpretation 360 is not optimistic enough for Nezha. Zhou Hongyi said that the Nezha team is behind these funds, and the Nezha founder team has too little equity, so the founder team must lead the company’s development.

Zeng Yuqun attended the investment and cooperation signing ceremony of Nezha and Ningde Times. A person at the scene recalled that when Zeng Yuqun signed the contract, Fang Yunzhou and Zhang Yong said that when the Ningde era was just starting to make power batteries, it was Chery and BAIC who gave them the opportunity to enter the industry: “Thank you for giving us the opportunity again.”

“Nezha’s people are a group of qualified and recognized veterans.” A Nezha investor told LatePost that many stories describe Nezha as a counterattack. Zhou Hongyi exaggeratedly said in an interview that it was the first time When I saw Zhang Yong, I thought he was a production line worker; in fact, Zhang Yong and the Nezha team were not “Nobody who came out of nowhere, but a Proven Guy”.

The investor commented that Zhang Yong is one of the best 4 or 5 sales leaders that can be counted in the low-end market of China’s automobiles of around 100,000 yuan. He has insight into the demand and knows how to connect the demand with the product. .

The rapid growth of Nezha after 2021 is due to the fact that there were no major flaws in production, quality, and channels in the past, and the U and V cars have found cost-effective longboards. They reused the experience of selling cheap cars in Chery and BAIC in the past, and used the positioning of “building cars for the people” to earn living space in the 100,000 yuan range with the most sales.

Nezha, who has limited resources for a long time, can only do the most important and basic things, which are also in line with the common sense of car building and car sales.

Zhang Yong knows that cheaper cars should be sold more, which is also common sense. In an interview with Caijing at the end of last year, he said that what he did was 6 or 70 points, and Li Bin could score 8 or 90 points, because Nezha’s market was several times larger than that of Weilai, and only 2-3 times of its sales can be achieved. Just as excellent. Zhang Yong told “LatePost” that Nezha is only “surviving” now.

In terms of process and status quo, this is not a dramatic counterattack story.

Yang attack should be early

Selling a car worth 100,000 yuan is not bad, which is what the Nezha team and Zhang Yong have done in the past. The launch of the Nezha S, which doubled in price this year, is a key leap for the company.

This is a more risky decision than imagined, because its starting point is 2019, when the sales of Nezha have not improved, and the industry is also full of sorrow.

Zhang Yong told LatePost that in the second half of 2019, when V and U were nearly completed, Nezha launched the second-generation platform Shanhai, which meant to support Nezha’s products to go up.

At that time, Nezha had very little capital, and the accumulated financing amount was less than 7 billion. The money was to be used to build the factory and produce and develop three models. The research and development of the new platform requires 2 billion yuan, which will occupy nearly half of Nezha’s funds. Internal doubts are “wanting to run before learning to walk”.

Zhang Yong felt that the development of Nezha would be limited if he kept selling a car of 100,000 yuan. Chery, the old owner, had this lesson. To make a higher-end, better-performing car requires a new platform, which can put down a larger battery, and feature an updated electrical and electronic architecture and suspension design.

The investment in the new platform seems to be large, but it actually saves money in the long run. Zhang Yong said that Shanhai Platform has considered the generalization of batteries, motors and chassis from the beginning, and the molds do not need to be re-developed, and the development cost of the later models will be lower.

Funds were tight, Zhang Yong persuaded the team and shareholders to invest in batches. The first phase required 1 billion, and the first investment of 500 million was “do it and see”.

Many companies are making platforms. Zhang Yong explained that there are real and fake platforms. The difference is the degree of generalization. If it is not defined at first, when a certain car is developed, the mold will need to be temporarily changed. This seems to reduce the development time of the platform. It is the launch point of the replacement products, but the back-and-forth logistics and supply chain management are all costs, there is no scale effect in the long run, and ultimately it costs money and time.

Weimar, who faced a similar decision in 2017, chose another path. At the end of 2019, the mid-to-high-end SUV EX6 Plus launched by WM Motor follows the old platform of EX5, with similar shape, slightly longer body, and improved interior and intelligence. The official price starts at about 280,000 yuan. In the first year after delivery, less than 500 EX6s were sold.

Half a year after the development of the new platform, in March 2020, at a regular meeting of the president shortly after the release of Nezha U, Zhang Yong proposed to start specific planning for the first model of the Shanhai platform. He already has a general direction: to make a sports car. This was a niche decision at the time. Kong Fanlong, co-president of Nezha, told LatePost that many management think that the first mid-to-high-end model should be an SUV.

Zhang Yong believes that it is the most correct thing to do SUV in the Chinese market, and there is no pressure on decision-making, but because of the large number of people doing it, the market competition is saturated; there are fewer self-owned brands to do mid-to-high-end coupe.

During the development process, some uncontrollable situations occurred. In Zhang Yong’s original vision, the price of the main model of the first car on the new platform could be controlled within 200,000 yuan, so in an interview in 2020, he said that Nezha “doesn’t make a car of more than 200,000 yuan”.

However, as the prices of batteries, chips and other components continue to rise or be out of stock, Nezha found it difficult to make a new car below 200,000. Zhang Yong also felt that in the price range above and below 200,000, consumers’ demand for intelligence exceeded his expectations. Some configurations that were originally intended to be put on the follow-up models of the new platform, such as lidar and high computing power chips, were brought to the S in advance. The cost of the whole vehicle has further increased.

Zhang Yong immediately adjusted the development idea of ​​S, and clearly chose the former between “good and cheap” and “cheap and good”. This is because in the range of 200,000, the Nezha brand is not strong enough and needs to impress consumers with product strength. Zhang Yong has said many times internally that if Nezha S’s products are only 20% better than those of friends, then there is no need to do it, because no one will buy them, “at least 50% better”.

In terms of product definition, Nezha S continues the strategy of “big car hits small car”, with a body length of 4.98 meters, a width of 1.98 meters, and a wheelbase of 2.98 meters, which has reached the C-class standard and is a large-sized car at this price. Classic C-Class sedans include BMW 5 Series, Audi A6 and so on.

Figure: Nezha S Yaoshi version (left) and lidar version (right)

Chang Bing, vice president and general manager of the design center of Nezha, analyzed the difference between Nezha S and competing products: Compared with BYD Han, which is similar in size, Nezha S is more sporty and young, and it is cheaper than Zhiji L7 and NIO ET7. Compared with the Tesla Model 3 and Xiaopeng P7, which are similar in price, the Nezha S has a longer wheelbase, so it has more space in the rear and a more refined interior.

For better, Zhang Yong can tolerate spending more money. Chang Bing told “LatePost” that the first version of Nezha S had a major revision a month and a half before freezing, and the front face was adjusted to be more “fierce” and more aggressive. The initial posture of Nezha S was not low enough. When it came to the prototype, the front suspension structure was re-modified. These modifications cost tens of millions of extra dollars.

However, if the revision will slow down the pace of listing, Zhang Yong will consider it carefully. It is acceptable to delay for 2 months, and there is a high probability that the functional improvement that is delayed for half a year will be transferred to the next model.

The logic behind this is that it is sooner rather than later that new brands move towards the high end.

Zhang Yong believes that now the consumption upgrade is very fast, and Nezha has to change accordingly. He can’t wait until he is completely ready to move, and he has to aim while running.

Zhang Honghan, deputy general manager of Nezha Brand Center, told LatePost that Nezha’s sales have increased in the past year or two, but not many in first- and second-tier cities. This is an opportunity instead: consumers have not yet recognized the Nezha brand. Solidification, we must hurry up and launch high-end cars before this.

Wei Xiaoli has proven that when it comes to smart electric vehicles, consumers are willing to accept a new brand if the products and services pass the test. This trend is more pronounced in the high-end market. A luxury brand in the traditional sense is better than cultural accumulation and the creation of a sense of luxury. Now the new forces of 40,000 to 500,000 cars feature services, autonomous driving, and smart cockpits, which are also accepted by the market.

Before and after the release of S, Nezha’s marketing, channels and manufacturing were all adjusted for it.

Zhou Hongyi told “LatePost” that the Nezha team was “clumsy and clumsy” before and only knew how to work. In the past, Zhang Yong only routinely forwarded some official blog content on social networks, and now he has begun to “scream”. Inspired by Li Xiang, after the S Yaoshi version was released in June, he said on Weibo that the Nezha S was “the best coupe within 1 million yuan”. He made some rare rhetoric. When evaluating the sales target of Nezha S, he said that 10,000 were qualified and 20,000 was excellent.

It is also a marketing method to release the Yaoshi version before the S main model. The Yaoshi version has a cool scissor door and is limited to 999 units. This idea was proposed by the marketing department in the early stage of development to attract attention and discussion.

In order to match higher prices and enter first- and second-tier cities, Nezha has expanded the proportion of direct sales channels. As of July 2022, Nezha Auto has opened 105 directly-operated stores in 30 cities, covering all first-tier and new first-tier cities. There are 6 or more directly-operated stores in Beijing, Shanghai and Guangzhou, and they are basically located in densely populated business districts.

Zhang Yong told LatePost that he is not particularly worried about the sales of S now, but the supply chain is a checkpoint and a part that Nezha cannot fully control. The shortage of parts and components is a common dilemma in the industry. In order to ensure the supply of Nezha S, Nezha has sent employees to work together in the supplier’s factory, and is also developing a second supplier for some parts that are in short supply.

Nezha already has three factories in Tongxiang and other places. This year, a new production line has been built for the S, which can support technologies that have not been used in several Nezha models in the past, such as the panoramic canopy.

Nezha S is the starting point of the second stage of the company. From an external perspective, this car is so powerful that it cannot be missed.

If S fails, what is the cost? Zhang Yong’s answer is that the monthly sales of S has not reached the 10,000 pass line, which does not mean the end of the high-end Nezha itself. The cornerstone of high-end is not the S, but the Shanhai platform on which the S is based. The platform capability has been formed, and two new cars of the Shanhai platform are under development. Within this year, Nezha will release the second model of the platform after the S.

“Objection is void”

Zhang Yong, who joined the company four years after its establishment, sees himself as an entrepreneur who has enough say and is responsible for almost all front-office operations.

A person close to 360 Investment Nezha concluded that Fang Yunzhou mainly solves 0 to 1, “to give birth to a child”, and Zhang Yong takes over from 1 to 10.

In general imagination, the CEO of “halfway airborne” is more like a professional manager and dare not make a decision. In fact, Zhang Yong’s internal management role is more like a typical startup company CEO. He is the final decision maker.

The vertical switching of Nezha V, the first car on the Shanhai platform is a coupe rather than an SUV, and there are internal discussions and even objections. In the face of such important decisions, Zhang Yong’s usual practice is to throw out the issue first, think of the answer, and let everyone investigate, judge, continue to discuss, and build consensus. “.

“Startups need efficiency, and I don’t have time to convince everyone.” Zhang Yong told LatePost, “If (other executives) don’t understand it, go ahead and execute it, and you will understand if you do it.”

Kong Fanlong and other business line leaders trust Zhang Yong. He told LatePost: “If the boss decides the direction, then we will help him check, solve the problem, and minimize the cost. It is not a characteristic of Nezha to be unable to make a decision late.”

Zhang Yong can also be persuaded and will change his mind if the information and circumstances have changed. At the end of 2021, Zhang Yong wanted to make a large SUV with a height of more than 5 meters. The team has been busy for half a year, and the shape has taken shape. By April this year, similar models of competitors were released one after another. Zhang Yong felt that Nezha could no longer differentiate himself by making this car, and the project was cut off.

This type of organization is very efficient when the No. 1 is sufficiently familiar with the business and has sufficient judgment, and the team is well-knit and trusting. Many people in Nezha are veterans of the auto industry, and many of them are old colleagues. They used to be good at building cost-effective models.

As Nezha enters the 200,000 mid-to-high-end market, it needs to add new people and capabilities to meet the needs of consumers in this range for intelligent and software functions. This is the unproven part of Nezha.

According to LatePost, Nezha has attracted some talents from technology companies such as Baidu and Banma Zhixing (a joint venture between Alibaba and SAIC). However, none of them have become the core management. A Nezha investor commented that Zhang Yong is picky in employing people, and cross-border talents need to work in the company for a period of time, make achievements, and prove that they can integrate.

Zhang Yong told LatePost that Nezha has established a research and development team of 700 to 800 people for autonomous driving and intelligent cockpit. In comparison, Xiaopeng’s autonomous driving R&D team has more than 1,500 people. Nezha’s pursuit of autonomous driving is to “be at the head”, but not to chase after the first. “This is not my strategic direction.” Zhang Yong said.

Nezha S will be a test of Nezha’s intelligent performance. It only depends on the configuration – Huawei’s lidar and MDC computing platform, Qualcomm 8155 cockpit chip, “very cost-effective”. How to use it, the product will finally speak.

A Nezha investor described Zhang Yong in his eyes: He does not offend or step on people. He occasionally jokes, but he never lets himself fall into verbal arguments. He has a good relationship with Wei Xiaoli as a family member, and he is very concerned about what he discloses. Does information and words count?

In Chery, BAIC and Nezha before 2021, Zhang Yong has proven that he can lead a team to fight when resources are limited. Ne Zha’s current situation is much better than before, with more abundant funds and a more organized team. Ne Zha, who has come all the way through misery, finally got a good card. They’re going to fight better resourced battles, challenges beyond experience.

Nezha’s immediate goal is to reach 500,000 sales in 2025 and achieve profitability. Zhang Yong believes that this is the ticket to the qualifying tournament. After 500,000 yuan, Zhang Yong’s bigger ambition is that Nezha can become the first company among the new forces to sell more than one million a year, which is a goal that has not been mentioned internally.

At the end of July, Zhang Yong asked a series of questions on social media: “I have been reviewing myself recently, is it inflated? Are there too many things I want to do? Should I continue to focus on subtraction today and tomorrow, or can I do something appropriately? The day after tomorrow?”

In the past few days, he may have a phased answer to his own review. This Monday, Nezha won the first monthly sales of the new force for the first time. Zhang Yong updated his social media: “Our goal is the stars and the sea. Before that, we must solve the problem of food and saturation.”

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