Recently, Nezha Automobile announced that Tongxiang State-owned Capital Investment and Operation Co., Ltd., Yichun Jinhe Equity Investment Co., Ltd., Nanning Minsheng New Energy Industry Investment Partnership (Limited Partnership) and representatives of Hezhong Automobile jointly signed the "Joint Agreement on the High-quality Development of Hezhong Automobile". Representatives of Beijing Huading New Power Equity Investment Fund, Chengdu Hongjing Technology Co., Ltd. and Ningbo Meishan Bonded Port Area Winning Investment Co., Ltd. witnessed the signing.
According to the agreement, the signatories will further enhance the financial strength of Hezhong Automobile, jointly provide a total investment of no less than RMB 5 billion to Hezhong Automobile, coordinate relevant resources, support Hezhong Automobile to achieve IPO as soon as possible, continue to increase investment in product research and development and technological innovation of Hezhong Automobile, expand the intelligent network R&D center, and promote the expansion of Hezhong Automobile's export scale.
"Timely rain" is coming
At present, poor sales + expansion of losses is a true portrayal of Nezha.
In July 2018, Nezha launched its first product, Nezha N01, with a starting price of 59,800 yuan, focusing on the online car-hailing market. Subsequently, Nezha gradually adjusted its strategy, enriched its product matrix, and gradually expanded the C-end market. From 2018 to 2022, Nezha's sales increased year by year, with 1,206, 10,000, 15,100, 69,700 and 152,100 respectively. In 2022, Nezha will surpass "Wei Xiaoli" in one fell swoop and become the annual sales champion of the new car-making force under the condition of a poor environment.
In 2023, Nezha's sales will begin to decline, with annual sales of only 127,500 units, a year-on-year decrease of 16.16%, to half of the sales target of 250,000 units. This year, Nezha still failed to reverse the decline, with deliveries of 10,000 units, 6,085 vehicles and 8,317 vehicles from January to March, respectively.
While sales are declining, Nezha's losses are also expanding year by year. According to its financial report data, from 2020 to 2022, Nezha Automobile's revenue will be 1.297 billion yuan, 5.735 billion yuan, and 13.329 billion yuan respectively, and its net loss will be 1.321 billion yuan, 2.908 billion yuan, and 6.919 billion yuan respectively. The cumulative loss in three years was 11.148 billion yuan. In the first half of 2023, the net profit loss of Hezhong Automobile will be 2.833 billion yuan.
Under financial pressure, Nezha has also been trying to IPO. In June 2022, it was reported that Nezha had started a pre-IPO round of financing with a target valuation of about 45 billion yuan, and planned to launch an IPO in Hong Kong within the year.
However, until today, Nezha has not been able to successfully IPO. Daniel Zhang, CEO of Nezha Automobile, once told the media: "Everyone thinks that from people, funds, to past experience, and the shareholders behind you, none of them have enough signs of success and the cards are not good enough." ”
For Nezha, this investment of no less than 5 billion yuan can be described as "timely rain". On March 20, Nezha also signed a contract with the Hong Kong SAR government to become a key enterprise partner. According to the agreement, the Hong Kong SAR government will provide a subsidy of 200 million Hong Kong dollars for Nezha Automobile and assist in the investment of 200 million US dollars in the cornerstone round.
Two investments in a row are of great significance to Nezha. In the short term, it can give Nezha a certain respite in the current fierce price war, and in the long run, the injection of multiple funds will enhance Nezha's core competitiveness in the new energy vehicle knockout competition and increase the participation time.
Moreover, the three parties of this investment have state-owned backgrounds, Nezha's investor strength has been enhanced, and the fund-raising channels have been expanded, which will help accelerate the follow-up IPO process and provide a guarantee for Nezha to face a more fierce competitive environment.
What's the problem?
After the decline in sales in 2023, Nezha started a personnel change at the end of the year, and the personnel adjustment specifically involved 13 people, and Nezha's entire marketing system was almost a "big change".
After the personnel appointment was announced, Daniel Zhang also immediately made a "review" on social platforms: including the switching between new and old products was not well connected and the rhythm was chaotic; the price of new products on the market was too high, and although the adjustment was in place in the second half of the year, it lost the opportunity; the loss-making product line greatly reduced production; the communication method was old, and there were good things that could not be said; and the marketing headquarters centralized power and weak management. He also said that in 2024, "the entire marketing system will stand up and return to work".
Zhou Hongyi, the founder of 360 Company, also bluntly said in the live broadcast in March, "The pronunciation of the letters used in the naming of Nezha cars is very strange, which makes consumers feel awkward and makes consumers unable to remember." You're always talking about yourself from marketing to product planning, and that's not okay. ”
Although Daniel Zhang frequently posts reflections on "marketing" on Weibo, in the author's opinion, the root cause of Nezha's poor sales may be the company's lack of core competitiveness, and the brand and products do not have a clear label, and can only be used as a selling point for cost performance.
In the field of intelligence, the cooperation with 360 Group has improved Nezha's strength in the field of Internet and intelligent hardware, but in terms of the most important intelligent driving and intelligent cockpit, 360 Group is unable to help, Nezha has not established its own brand moat, and there has always been a big gap between its strength and Wei Xiaoli.
After that, Nezha cooperated with Huawei, SenseTime and other enterprises, such as using Huawei's lidar technology and Huawei's MDC intelligent driving computing platform to improve the intelligence of the model. However, this kind of way of using suppliers to enhance the configuration of the model is difficult to create a differentiated competitive advantage. Under the price war, Nezha gritted his teeth and participated in it, and the models were sold cheaper and cheaper, but the impression was only "cost-effective".
After Zhou Hongyi's "scolding", Nezha ushered in an investment of no less than 5 billion, which can be regarded as a new beginning. Nezha can't just stay in the reflection stage, but also needs to be ashamed and brave. Reversing the decline in sales, enhancing brand value, building core competitiveness, and realizing hematopoietic ability, Nezha still has a series of things to do. In this way, Nezha can adhere to the corporate philosophy of "making cars for the people" and realize the ideal of "equal rights in science and technology".