When did WEILAI start to "fall behind"?

Wen | Zhengning

Source| Bowang Finance

On December 18, 2021, at NIO Day, NIO officially released the latest coupe model ET5, priced at 328,000-38.6 million yuan, if the use of NIO's rental battery solution, the lowest price can be reduced to 258,000 yuan, which is the first model of WEILAI to touch the 200,000 yuan range.

However, compared with the debut of Weilai ET5, on the press conference, founder Li Bin's speech seems to be more spreading, Li Bin said, "I don't understand why everyone still buys oil trucks? Aside from being able to smell gasoline, what else is good? ”

This remark caused a heated discussion among netizens, and even some netizens joked that even if they did not buy gasoline cars, they might not choose Weilai, after all, the negative impact suffered by Weilai in the "Lin Wenqin Incident" in August this year has not yet receded, and sales have been declining since July.

In the past year, in the domestic new car industry, "Wei Xiaoli" has been led by Weilai, but in the second half of this year, Weilai has repeatedly missed the top three positions.

01

Didn't win the sales championship, what happened to Weilai?

In July this year, Weilai's delivery volume was surpassed by Xiaopeng and Ideal for the first time, and then, Weilai did not win the monthly sales champion for many consecutive months, just this past November, in the sales ranking of new energy manufacturers, Weilai fell to 11th, And Weilai's "falling behind" seems to have become the norm.

As a result, Xiaopeng and Ideal, who have been suppressed by Weilai, have caught up, and in the new car sales list in October 2021, Xiaopeng, the second oldest of 10,000 years, won the championship, and even Nezha Automobile and Weima Automobile, which have always been regarded as the "second echelon" of new cars, have also surpassed Weilai, not to mention new and old opponents such as Eian, Euler, and BYD.

However, Weilai's fall behind is actually a clue.

Since last year, Weilai has begun to have a "production capacity crisis", the delivery of many models has to be postponed, and some car owners have feedback that they placed orders at the end of last year, and they have to wait for 10 weeks after locking orders.

All along, Weilai has been using the model of foundry to build cars, which signed an OEM agreement as early as 2016 and renewed it in May this year, although JAC has expanded the annual production capacity of FOUNDC Weilai Automobile to 240,000 vehicles, but due to the lack of core problems, jacque's actual production capacity is only 10,000 units per month.

For major new cars, monthly deliveries of more than 10,000 are the norm, and the problem of Weilai's insufficient production capacity has long been exposed. In September this year, due to the phased upgrade of the production line of JAC Weilai Hefei Advanced Manufacturing Base, the delivery volume of WEILAI in October was only 3667 vehicles, which was less than half of the ideal ONE sales.

In addition to being dragged back by production capacity, Weilai's marketing methods have long been buried with "thunder". In August this year, Lin Wenqin died in an accident while driving the ES8 and using the auxiliary driving function, which plunged NIO and its automatic driving function into a huge controversy.

In addition to the question of Weilai intelligent driving, the reaction of Weilai car owners also surprised everyone, first 500 Weilai car owners issued a "joint statement" saying that Weilai did not say to the owners that NOP is automatic driving, and since then, thousands of car owners have issued an "anti-owner joint statement", refusing to be represented, and said that in the process of buying a car, Weilai did not give a professional introduction and publicity for the driver assistance system.

The "reversal" performance of car owners in turn can't help but be reminiscent of Weilai's "MLM-style" car sales model. All along, car owners have been very important to NIO's brand promotion and product sales, because NIO's owners have a high degree of support and recognition of the brand.

A large part of Weilai's marketing expenses are used to support its offline center, car clubs and other activities, and these contents will also be more closely linked together by Weilai car owners, until the "Lin Wenqin incident", Weilai's sales model began to be questioned.

02

Why Weilai's high-end strategy is becoming more and more unpopular

If Weilai's production capacity and marketing methods have laid a "thunder" for its development, then Weilai's high-end strategy has always been a "catalyst" for Weilai to fall behind.

Before ET5, NIO's three medium- and large-sized SUVs - ES8, ES6 and EC6 - started at 468,000, 358,000 and 368,000 respectively, and the ET7, which was also a sedan, also had a starting price of 448,000, and in the same model, Weilai's price was the highest.

Even if NIO launches a cheaper ET5 today, compared with NIO's competitors, such as Model 3, BYD Han, and Xiaopeng P7, the starting price of several models is as low as about 200,000 yuan, which is lower than ET5.

One of the biggest problems of Weilai's high-end strategy is that its price and quality are not directly proportional, that is, its quality does not match its high price.

Before the launch of ET5, Ma Lin, senior director of corporate communications at WEILAI, posted in the circle of friends to emphasize that "5 is greater than 3", and the industry understands that the 3 here refers to the BMW 3 Series that sells best in high-end mid-size cars and the Tesla Model 3, the champion of electric vehicle market sales.

In Wei's view, the configuration of ET5 is completely beyond the BMW 3 Series and Model 3, in terms of power performance and endurance, ET5 can achieve 4.3 seconds of acceleration of 100 kilometers, the maximum endurance of 1000 kilometers, 100 meters acceleration is faster than the 5.9-9 seconds of bmw 3 series, and the endurance also exceeds the 590 kilometers of Model 3.

From these configurations, the quality of WEIO ET5 is not bad, including several models in the past, in fact, they all have the mainstream configuration of the market at that time, but the market still believes that the quality of WEILAI does not match its high price.

Compared with traditional BBA brands such as BMW with a century-old history, the strength in terms of brand, technology, scale, supply chain, etc., is obviously not an order of magnitude; even compared with young brands such as Tesla, the influence of international brands is far greater than that of domestic brands, just as Apple mobile phones have always surpassed many domestic mobile phone brands in word of mouth.

Weilai's high pricing undoubtedly includes a large brand premium, but whether consumers have such a high degree of recognition of its brand, there is still a question mark.

However, although the market has questioned NIO's brand premium, NIO still insists on maintaining its own brand tone through prominent user rights. Li Bin once responded to the question of whether ET5 can reduce the price to less than 250,000, saying that "it is not impossible to get below 250,000, if you do not engage in so many user rights." ”

However, Weilai's face project also did "burn money", and the third quarterly report showed that Weilai's marketing expenses reached more than 1.8 billion, while the research and development expenses were less than 1.2 billion. Weilai chooses to build a brand and then build a car first, but consumers ultimately want to use it, after all, the car is not the brand, whether the quality of the car is important, or the so-called brand face is important, Weilai still has to think about it.

03

Weilai "sinks", what challenges will it face?

With the addition of more and more new energy vehicle brands in recent years, Weilai adheres to the "high-end market" and does feel a lot of pressure. To this end, the launch of Weilai ET5 can also be regarded as an attempt on the road of "sinking", but can Weilai "go down" lead the brand out of the "falling behind" swamp?

First look at the challenges that ET5 may face, the price issue has been mentioned above, even if Weilai has put down its body "sinking", but the pricing problem is still not low, relying on the rights of car owners, the blessing of the Weilai brand, it has become more and more difficult to please users. With the continuous influx of more new brands, the moat built by Weilai with the help of brand effect has also been continuously diluted in the market.

On the other hand, it is the emergence of ET5, or the pressure to give Weilai a "left hand to right hand". After the release of ET5, there are media reports that many owners who have booked ET7 have "turned" to choose ET5, after all, compared to ET7, ET5 has more advantages in price, and the overall competitiveness of the model is OK, the mileage is longer, the lidar is installed, and the concept of meta-universe is also rubbed, equipped with the application of AR/VR technology.

In addition to Weilai's "own people to fight their own people", for Weilai's new models, competitors have also made different degrees of optimization of their models, such as Tesla Model 3 or will be in next year's revamp will be delegated to some model S high-end configurations; and Xiaopeng P7 will also be equipped with lidar next year, all in line with Weilai's ET5.

Therefore, for Weilai, although it has invested new models in the market and made new attempts in car prices, on the whole, Weilai still gives up the market below 300,000 yuan, only in the high-end strategy, tearing open a small opening, after all, the purchase plan of renting batteries, for many car owners, the acceptance is still not high, just like renting and buying a house, domestic consumers are naturally more inclined to "buy a house".

In this way, Weilai wants to keep up with the team of new cars, on the one hand, to cultivate internal strength, in addition to launching new models, equipped with more functions, improving product quality, reducing technical failures, and increasing production capacity, in order to regain market reputation, it is the key.

On the other hand, in the brand promotion strategy, Weilai or still have to make trade-offs, with the continuous addition of new car brands, Weilai's moat has become weaker and weaker, but the marketing investment is still a lot, blindly maintaining the status quo, sometimes it is also the performance of "lazy government".

The new car market is no longer the era of "Wei Xiaoli" domination, and Weilai must understand this.