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    Li Bin responded: Wei Lai does not cut prices, does not close the store, canceling the Shanghai factory is a normal decision

    2019-03-11 15:31:59

    Zhongxin Jingwei

    Recently, the new force of the car, Weilai Automobile (hereinafter referred to as “Wei Lai”), released its fourth quarter earnings report for 2018. The outside world noticed that Weilai’s losses continued to expand, and the construction plan of the Shanghai plant was suddenly cancelled. With the large-scale entry of Tesla into the country, the competitive pressure faced by Weilai Automobile has increased dramatically.

    In this context, Wei Lai held a media conference on March 9th, and International Finance News was also invited to participate. At the media meeting, Wei Li, chairman and founder of Wei Lai, and Qin Lihong, president of the company, responded to the concerns of the outside world such as losses, building factories, and competing with Tesla.

    Weilai does not cut prices, does not close the store

    Recently, Tesla has continuously implemented measures such as price cuts, freeze commissions and closing of stores. Tesla said that closing the store would reduce the sales price of all its models by an average of about 6%, "so that we can sell Model 3 for $35,000 earlier than expected."

    However, Wei Lai has "does not do the opposite," not only has not cut prices, but also has undergone large-scale expansion in terms of storefronts and personnel.

    "International Finance News" asked Li Bin about this move. Why did Wei Lai take the opposite measures against Tesla?

    Li Bin said that Tesla's price cuts are under tremendous pressure from the Chinese market. China's electric vehicle industry has made rapid progress, and there are now many products available on the market. Tesla's sales in China in January and February are also estimated to be some distance from expectations. Weilai Automobile has taken into account various factors in pricing, including the localization of Tesla, so it will not take targeted measures due to Tesla's price cuts. In the long run, Weilai will not use the price cut to expand the market.

    In addition, Wei Lai will not close the store. Li Bin said that the idea of ​​Weilai's NIOhouse and Tesla is different. In addition to the product display, there is also a user Club function, which is not set up to sell cars. Qin Lihong also pointed out that the company will continue to expand in the follow-up, in addition to the flagship store, it will open a number of new business district stores and community stores.

    However, the rental price of NIOhouse is not cheap. A considerable part of the NIOhouse is located in the city center. According to media reports, the annual rent of NIOhouse in Beijing Oriental Plaza is as high as 70 million to 80 million yuan. The rent of NIOhouse in the center of Shanghai is as high as 100 million yuan. Said that it is a heavy burden.

    Losses will continue, continue to invest in R&D and operations

    In this media meeting, Weilai’s financial problems have become one of the focuses of attention. Since the establishment of Weilai in 2014, the question of “burning money” has never disappeared. Last year, Wei Lai’s “burning money” continued.

    In the fourth quarter of 2018, the financial report showed that Weilai’s total revenue for the fiscal year 2018 was 4.951 billion yuan, with a loss of more than 9.6 billion yuan. The fourth quarter total revenue was 3.435 billion yuan, an increase of 133.8% from the previous month; the net loss was 3.503 billion yuan, an increase of 24.6%.

    Among them, research and development and sales expenses account for a relatively large proportion. Last year, Weilai’s total R&D expenses were 3.979 billion yuan, an increase of 53.6% compared with last year; the total sales and management expenses in 2018 was 5.346 billion yuan, an increase of 127.2% over last year.

    Since Weilai delivered a total of 11,348 ES8s, the reporter found through a simple calculation that the average bicycle loss in Weilai exceeded 800,000 yuan.

    Regarding this issue, Li Bin believes that the current calculation criteria are not fair. In the past few years, Weilai has invested a large amount of money to build a global R&D center. Under the high standards, Weilai's R&D expenditure will naturally increase. In the future, Weilai will also insist on investing in research and development, otherwise it will not be able to maintain its own competitiveness.

    At the same time, Weilai's service investment is continuing, and there is also a large amount of investment in the power exchange system, sales and service network, mobile charging, and one-button power supply. Li Bin pointed out that the investment results in the above-mentioned fields are sustainable, and the subsequent ES6 will be listed soon. These are very systematic jobs and cannot simply reduce short-term investments.

    Qin Lihong also said that the automotive industry generally needs a five-year construction period. Weilai's sales and service system issues will take two to three years to evaluate.

    So, when will Wei Lai turn a profit? In the fourth quarter of 2018, Weilai's single-quarter gross profit was positive for the first time, and its gross profit margin for the whole year was negative 5.2%.

    In this regard, Li Bin said that he is currently unable to answer. With the launch of the ES6, the company's gross margin will be significantly improved, but in the ES6's five SUV market, the relative competition will increase.

    Cancellation of Jiading factory is a normal decision

    At the media conference, another topic of concern to everyone was the “Jiading Factory”. Last year, Weilai plans to set up a second plant in Waigang Town, Jiading, Shanghai, to produce follow-up models for the ES8.

    However, in the fourth quarter earnings report, Wei Lai suddenly announced the cancellation of the Jiading factory plan, which led to many speculations. Some insiders believe that Wei Lai was "extruded" by Shanghai Tesla.

    Li Bin denied this. He said that the cancellation of the Jiading factory to use foundry is based on two considerations. First of all, the Ministry of Industry and Information Technology No. 50 issued in November last year gave a directional recognition to the cooperation mode between Jianghuai and Weilai. Secondly, the Weilai Jianghuai Plant also carried out capacity upgrades, which could further increase the production capacity to 150,000 vehicles/year, which basically satisfied The production of the first three cars is required.

    As for "Tesla's squeezing out of Shanghai", there is no such thing. The Shanghai Municipal Government is very supportive of Weilai, and the cancellation of the factory is a normal decision of the company.

    Hot searchTesla Shanghai factory Li Bin

    Editor in charge: Zhao Weiwei RF11518

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