Rebirth 08: Rise from copycat phones

Chapter 463 Xu Shenxue and Musk's meeting
Bao Yongyan attended the roll-off ceremony of the first assembly plant of Hailan Automobile Thailand Factory in Thailand, and presided over the launch ceremony of the tropical version of Hailan SLMC-L1 model.

He did not stay in Thailand for too long, but went to Indonesia to participate in the investment and factory construction negotiations between the local company and Hailan Automobile.

The local people welcomed Bao Yongyan's visit and gave him a high-level reception.

After arriving in the country, Bao Yongyan attended high-level talks and then attended a local automotive summit.

At a local automotive summit, Bao Yongyan expressed optimism about Indonesia's automotive market and its leading role in the automotive field in the ASEAN region.

And we hope to bring the world's top smart electric car, Hailan Automobile, to Indonesia!

The reason why HaiLan Automobile chose Indonesia as its second investment country in the ASEAN region is closely related to Indonesia’s own situation.

First of all, Indonesia has a huge population of 280 million. Its GDP of over one trillion US dollars ranks first in the ASEAN region. Its per capita GDP is also very good, about 4,000 US dollars, making it a typical middle-income country.

The GDP of the entire ASEAN is only about US$290 million, while Indonesia alone has US$1 trillion, accounting for about 35%.

In addition, Indonesia is relatively stable, which means that its economic potential is not small.

All these have made India a major economy in the ASEAN region and an important hub for many domestic companies to go overseas. The bilateral trade is estimated to be worth more than 70 billion US dollars. Indonesia imports a large number of various products from China every year, not to mention other ordinary trade products.

Let’s talk about some products related to Xu Shenxue. Among them, the more important ones are the three categories of smart terminal products, service trade, and smart electric vehicles.

Zhiyun Group and Weiku Electronics export a large number of various smart terminal products to the Indonesian market every year, mainly mobile phones, tablets, and computer products.

The Indonesian market is not very good for Zhiyun Group... because the smart terminal products under Zhiyun Group are all expensive products, and the prices are extremely high. The average price of its S series is more than one thousand US dollars. Such expensive mobile phones are too expensive for Indonesia, where the per capita GDP is only four thousand US dollars.

Although Zhiyun Group's strategy of promoting SX and SXL models in India, Indonesia and other emerging markets has brought certain sales, the sales volume is relatively average.

In the past year, Zhiyun has sold about 1.2 million mobile phones in the Indonesian market, but most of them are relatively low-priced SX and SXL models, as well as old S series and C series phones... and the sales of the new S series flagship are very low.

This year, the core product among Zhiyun Group's mobile phone products is the S17 series of mobile phones, with an average selling price of more than one thousand US dollars.

However, in the Indonesian market, the product with the highest sales volume is the S16X... not the S17 flagship series, nor the old S16 flagship series, nor even the S17X or S17XL series... but the S16X, a product launched in the spring conference last year to reduce inventory.

The average selling price of this thing in China is only about 3,300 yuan. In Zhiyun’s mobile phone product line, it is a typical low-priced mobile phone.

But for Weiku Electronics, this is different.

Because local people have limited incomes, the best-selling mobile phone models in the Indonesian market are not those priced at three to four thousand or even five to six thousand yuan, but those priced at one thousand yuan.

And this is the traditional advantage area of ​​Weiku Electronics!

The Little Blue digital series and Little Blue M series under Weiku Electronics have very good sales in the local market.

In addition to Weiku Electronics, several other domestic manufacturers, such as Dami, OV, and Huawei, also have good sales in the local market.

Considering the huge development potential of the local market, Xu Shenxue also returned the favor by establishing Zhiyun Group's overseas R&D center in Indonesia.

Therefore, the cooperation between the two parties is quite pleasant. Although the Indonesian market itself is not large and its consumption capacity is limited, Xu Shenxue values ​​their future potential... and the lack of competition.

In terms of potential, India has greater potential, but Xu Shenxue has never planned to invest in India because India is too ambitious.

As for Indonesia, its own strength is limited, so it doesn’t matter even if it has ambitions.

Finally, when Hailan Automobile considered developing the entire ASEAN market and choosing a second assembly base, it considered other ASEAN countries horizontally and finally chose Indonesia... Of course, in order to attract Hailan Automobile to invest, Indonesia also provided huge preferential policies and measures.

It is not just about direct construction and tax incentives, but also about promising to support the development of the smart electric vehicle field, including supporting the promotion of charging pile construction, various subsidies for the purchase of smart electric vehicles, and so on.

Various preferential policies and measures are basically similar to those in Thailand.

In this way, Hailan Automobile and Indonesia reached a consensus, which is why Bao Yongyan went to the local area to participate in the negotiations.

This is a mutually beneficial thing, and both sides are actively promoting it... Of course, when some people laugh, others cry!
Who is crying?
Of course it’s the Japanese automobile companies!
Here, we must emphasize the volume. Almost the entire ASEAN market is the backyard of Japanese automakers. In countries such as Thailand, Indonesia, Malaysia, and Vietnam, Japanese auto brands are the leading brands in the local area.

In Indonesia, Japanese automakers have an extremely obvious dominant position, with their market share reaching about 90 percent.

Therefore, Japanese automakers are very wary and even worried about HaiLian Auto's entry into ASEAN and its expansion into Thailand and Indonesia.

Of course, as I said before, they are not actually worried about HaiLan Automobile itself... No matter how awesome HaiLan Automobile is, it is still a high-end car brand, and the prices of its models are too high... The cheapest model currently on sale costs more than 300,000 yuan after subsidies.

This is different from the market in the ASEAN region which is dominated by cheap and inexpensive models.

Here, entry-level models with a price of around 100,000 yuan are the mainstream...

In fact, cars priced around tens of thousands of yuan are also the mainstream models in most countries around the world.

Luxury models have never been the mainstream in the automobile market!
Global automobile sales can reach 70 to 80 million per year, while sales of luxury cars priced above 300,000 or 400,000 yuan are only a few million, accounting for just over 10%.

And there is another characteristic of the luxury car market, that is, China is the most important luxury car market in recent years... Its growth rate is very fast, which is also an important reason for promoting the rapid development of Hailan Automobile.

You should know that 68% of Hailan Automobile's sales are contributed by the domestic market. The overseas market was very important in the early days, but with the improvement of the domestic economy, Hailan Automobile has transformed from an expensive toy to a traditional luxury car brand, especially after Hailan SLMC was launched on the market, the domestic market has become Hailan Automobile's most important and core market.

But no matter what, Hailan Automobile is a luxury car brand, which is a huge difference from Japanese car companies.

So even though HaiLan Automobile has been conquering the ASEAN region in recent years, it is now setting up automobile assembly plants in Thailand and Indonesia, trying to build the ASEAN market into its own backyard.

However, this will not cause much damage to Japanese automakers... The biggest victims of the rise of Hailan Automobile have always been the three major brands of BMW, Audi and Mercedes-Benz.

What Japanese automakers are more afraid of is that after HaiLan Auto has carved out a path for itself in ASEAN, a large number of Chinese automakers will follow suit...that would be a more serious matter.

Many senior executives of Japanese automakers feel their scalps tingling at the thought of BYD, BAIC, GAC and other domestic automakers launching cheap electric vehicles into the ASEAN market and other emerging markets!
Based on this concern, Japanese automakers are paying close attention to the developments of HaiLian Automobile, and are wary of the actions of more Chinese automakers behind it.

On the other hand, some actions have also been taken to actively save the company, such as Toyota further strengthening the research and development of hybrid systems.

They try to combine their huge advantages in traditional fuel vehicles with some features of electric vehicles to achieve a balance between oil and electricity...

It’s just that the idea is beautiful, but the reality is very cruel.

Especially when Hailan Automobile officially launched its pure electric vehicles equipped with semi-solid batteries to the market last year, the range of the vehicles was directly increased to 600 to 700 kilometers, which greatly solved the range anxiety of pure electric vehicles.

Not to mention, the extended-range model of Hailan Automobile can easily achieve a comprehensive range of more than 1,000 kilometers.

In addition, the plug-in hybrid technology route represented by BYD is also quite competitive in the market, and this plug-in hybrid does not have any range anxiety, and pure electricity can be used for short-distance driving in the city.

If you don't drive long distances and it's convenient to charge on weekdays, a plug-in hybrid car may even last from the beginning of the year to the end of the year with a tank of gas...

Under such circumstances, the three major technical routes of pure electric and plug-in hybrid or extended-range are developing very rapidly, posing a huge challenge to the hybrid technology route dominated by Japanese automakers.

The above only talks about the technical differences in the power system part... and we haven't even talked about the intelligent part and battery management technology, and the gap between Japanese automakers in these areas is even greater.

In this case, it is natural for Japanese automakers to feel anxious... They see the threat, but they can do nothing about it!

----

Bao Yongyan stayed in Indonesia for a few days and negotiated with the local authorities, then his private plane headed for Europe.

Europe is also an important market for Hailan Automobile and its largest market outside of the domestic Chinese market. The local residents have relatively high incomes and can afford the high prices of Hailan Automobile.

Although Hailan cars need to bear certain tariffs when entering the local market, and the local operating costs are relatively high, the prices of Hailan cars in Europe are relatively high.

However, it still conquered a large number of local consumers with its excellent and top-notch technology.

Last year, Hailan Automobile sold more than 200,000 cars in Europe, among which the Hailan SLMC sold very well.

Not only in Europe, in fact, Hailan cars have good sales in many other countries... Although limited by the high price, its share in the local car market is very low, but for a luxury car brand, a low share is a very normal thing.

Hailan Automobile's approach is to sell cars all over the world. If they sell a few thousand cars in one country and a few thousand cars in another country, then when the sales in so many countries are accumulated, the sales volume will be quite impressive. Of course, among so many domestic automobile manufacturers, and even among many automobile manufacturers around the world, only Hailan Automobile can do this...

Because HaiLan Automobile is backed by Xu Shenxue and Zhiyun Group, it has huge fame and brand appeal all over the world, even in primitive tribes in Africa.

Speaking of HaiLian Automobile, everyone knows that it is a smart electric car developed by the world's richest man, Xu Shenxue. It is full of black technology.

The world's only L4 level autonomous driving technology, the world's only semi-solid-state battery technology!
These two points alone are enough to defeat all major automobile manufacturers in the world.

The inherent high-tech attributes of the Hailan car make many people regard it as a high-tech product rather than a traditional car!
Therefore, it is normal for many people to think that Hailan Automobile's smart electric cars cost hundreds of thousands or even millions of yuan... As a black technology product, it is normal to sell it at such a high price, not to mention that this is a product made by Xu Shenxue.

None of the high-tech products made by Xu Shenxue are cheap...they are all extremely expensive, and people have long been used to it.

But if other car brands come up with electric models that cost hundreds of thousands or even millions...you'd be awesome if you could sell tens of thousands of them, but if you still want to sell hundreds of thousands or even millions of them per year...consumers will think you're crazy!

Consumers will also be treated differently...

The core reason for this different treatment is that people do not regard Hailan cars as traditional cars, but as future intelligent cars full of black technology!

This difference in consumers’ perception directly determines their ability to bear prices!

Therefore, you can see the sea blue cars of the local rich people in the poorest places in Africa...

After all, just because a place is poor doesn’t mean the rich people there are also poor.

Of course, even though Hailan Automobile is sold all over the world, the European market is still its largest overseas market, so Hailan Automobile still attaches great importance to it.

After negotiations with several European consortiums, the two sides reached a cooperation agreement. According to the cooperation agreement between the two parties, Hailan Automobile will invest in building a factory in Europe. In addition to core components, other spare parts need to be purchased locally, but a certain proportion must be achieved.

This is a very typical market-for-employment behavior.

Both parties take what they need.

According to this agreement, Hailan Automobile invested in building a factory in Spain. Although the construction of the factory in Spain encountered many difficulties, after subsequent negotiations with the opposing consortium, the other consortium stepped in to resolve many environmental protection, animal protection and other problems.

Subsequently, the construction entered its normal progress, but due to work efficiency issues in Europe, the construction progress of the Spanish factory is still relatively slow.

According to the current progress, it will take two years for the Spanish factory to go into production, which is about 20 years.

Because the progress of the Spanish factory is relatively slow, and the European market is relatively important and has huge potential, it is also to diversify risks and balance the distribution of interests among the cooperative consortium.

So last fall, Hailan Automobile and several old European consortiums reached a new agreement and decided to build a car factory in Hungary with a designed annual production capacity of 100,000 vehicles.

The subsequent Spanish factory will serve the Western European market, while the Hungarian factory will serve Eastern Europe and parts of Central European markets.

The two factories have a combined designed production capacity of 200,000 vehicles, which is an important layout for Hailan Automobile in the future for the European market.

Although the Hailan cars produced by these two factories need to share part of the profits with the European consortium through various means, Hailan cars can still take about 70%, and can still keep the core technologies and component production of batteries, motors, intelligent driving, etc. in the country.

Not transferring core technology departments and spare parts manufacturing is the bottom line strategy for HaiLan Auto's overseas investment formulated by Xu Shenxue.

If Hailan Automobile's sales in Europe continue to rise, Hailan Automobile will continue to expand its investment in Europe and further increase the production capacity of local factories to assemble vehicles.

Just when Bao Yongyan went to Europe to promote smart electric vehicles and at the same time boasted about how many jobs and tax revenues Hailan Automobile had brought to the local area.

Xu Shenxue also welcomed Musk and his party in the country!
Musk came to inspect Tesla's Shanghai factory as part of the strategic cooperation between Tesla and Hailan Automobile.

Tesla's Shanghai factory is 70% owned by Tesla and 30% by HaiLan Auto. Correspondingly, HaiLan Auto has set up a factory in Mexico, with 70% owned by HaiLan Auto and 30% owned by Tesla!

The two sides also reached a cross-exchange agreement on supply chain and patent technology.

At the same time, they jointly pledged to assist each other's vehicles in entering their respective markets.

When the negotiations between the two parties were reached, Musk naturally attached great importance to it and would come over to check on the progress of the Shanghai project whenever he had time.

He has been eyeing the Chinese market for a long time, especially since Tesla's operations are not going smoothly at present, and it has been greatly affected by the US auto supply chain. At the same time, the local support for the electric vehicle field is not very strong, so Tesla's car sales are actually not high.

Last year, Tesla sold just over 100,000 vehicles in total. In the field of new energy vehicles, its sales volume is not even as high as BYD... and the gap with Hailan Automobile is even greater.

But they also have their own natural advantages, that is, the American market belongs to them... There are not many competitors in the American market, especially when Hailan Automobile is exported to the United States and the tariff rate on wages reaches an astonishing 100%.

Therefore, if they are given some time, they will be able to develop the American market sooner or later.

The problem is that they have big supply chain issues and it is very difficult to control costs.

This is also one of the main reasons why Tesla set up a factory in Shanghai: to take advantage of the mature, large and cheap supply chain of China's smart electric vehicles led by HaiLian Automobile, thereby controlling Tesla's manufacturing costs, and then supply cheap Teslas to the Chinese market and other overseas markets.

Doing this also means that Tesla will adopt an almost 100% Chinese supply chain... including battery packs, motors, chips and almost all other parts will be purchased domestically.

This means that taxes and jobs remain at home.

This is very important for China's automobile industry!
You can come to make money, but you have to stay for jobs, taxes and supply chains!

Even so, this factory is still very important to Tesla.

If all goes well, the factory will start trial production this year.

This time when Musk came to inspect, he also visited Xu Shenxue. His purpose was very simple, which was to finalize the strategic cooperation between the two parties in the field of smart electric vehicles.

Especially cooperation in the fields of semi-solid-state batteries and computing chips.

Previously, Xu Shenxue had a conflict with the American consortium and directly canceled the supply of semi-solid batteries and new-generation computing chips to traditional American automakers such as General Motors and Ford. Tesla was granted exemption because of its cooperative relationship with both parties.

However, this exemption is not stable, so Musk still attaches great importance to maintaining his relationship with Xu Shenxue.

Xu Shenxue gave the other party a positive answer: Don't worry, we will continue to sell semi-solid batteries and computing chips to you, and the cooperation between the two parties will continue and it will be a long-term cooperation.

Xu Shenxue’s idea is that it is already difficult for Hailan Automobile to enter the US market on a large scale, and the subsequent Mexican factory is probably just a short-term business and will also face some troubles in the future.

In this case, how to take over the American automobile market?

If I can’t sell complete vehicles, I will sell core components such as power batteries, chips, and motors!
The power battery accounts for about 50% of the cost of the entire vehicle. The money earned from selling batteries is no less than that from selling the car directly.

Selling batteries also requires a carrier. Tesla, an emerging car company, has a financial group whose interests are inconsistent with those of American car companies, so this becomes a good choice.

It's also good to make money by selling advanced semi-solid batteries to Tesla and then indirectly entering the US market!
And if Tesla obtains semi-solid-state batteries, computing chips and other leading core components, it will become more competitive in the US market, and will subsequently cause greater damage to traditional US automakers such as GM and Ford.

Xu Shenxue is really looking forward to seeing this kind of thing!

If you impose tariffs on me, I will support your competitors to deal with you...

If Tesla and traditional car manufacturers in the United States start a fight, it means that the new and old financial groups within the United States are fighting each other, and Xu Shenxue, an outsider, can just watch the show while eating melon seeds!
Therefore, Xu Shenxue expressed his respect and welcome for the arrival of Musk and his party, which also made Musk feel very honored... He also felt very happy that Xu Shenxue, the world's richest man and technology tycoon, gave him so much face.

On social media, he excitedly expressed his admiration for Xu Shenxue.

Xu Shenxue is said to be the greatest entrepreneur of the 21st century and his role in promoting technological progress is irreplaceable.

Xu Shenxue also reciprocated by praising Musk, and both sides seemed to have met each other too late.

In the field of smart electric vehicles, especially in how to develop and expand the U.S. smart electric vehicle market, the two sides still have a lot of common topics. After all, they have the same enemy: the traditional American automobile industry chain represented by General Motors and Ford!
Both of them wish that the traditional American automobile industry chain would be destroyed as soon as possible!
Afterwards, many financial media reported the meeting between Xu Shenxue and Musk. Some media said that the cooperation between the two parties was a typical example of global cooperation, but not all media were optimistic about the cooperation between the two parties, and there were also many critical voices.

But there is no doubt that the meeting and cooperation between the two will have a huge impact on the global smart electric vehicle industry and even the automobile industry!
Because the core goal of both parties is to promote the continued expansion of the smart electric vehicle market and ultimately end the era of traditional fuel vehicles.

(End of this chapter)