Author: Wei Wen
Recently, some media reported that the WM Motor 4S store in Haikou City, Hainan Province was all closed, and because there was no after-sales service and no accessories, more than 2000,<> owners were difficult to maintain and repair. The first financial reporter called the reserved phone number of the Hainan branch of WM's official website today, but most of them were "unreachable" voice reminders or no one answered.
In March this year, the Shanghai Qingpu District Consumer Protection Commission posted information on its official WeChat public account that WM Motor may be operating abnormally, and consumers are cautious about buying. Among them, consumer complaints are also mainly focused on abnormal company operations, store closures, inability to provide auto parts, stagnant after-sales service, and lack of manual customer service.
At the same time, news of the tight capital chain of WM Motor has also come out frequently, and negative rumors such as employee salary cuts and production suspension have also appeared on the hot search many times. On March 3, WM Motor publicly stated that it is making every effort to resume work and production.
WM Motor is not the only new automaker that has suffered an operational crisis this year. Yicai exclusively disclosed on March 3 that Tianji Auto stopped work and production, and employees will be paid living expenses according to the minimum wage standard; Aiways has delayed the payment of wages for two consecutive months; Reading Cars has filed for bankruptcy.
Insufficient hematopoietic capacity
"Aiways has always focused on overseas markets, first Europe, and then recently Southeast Asia, but Europe is a relatively closed market, and it is not easy to make achievements in Europe; The domestic market has actually had more opportunities in the past few years, and although Wei Xiaoli has some twists and turns, its annual sales last year reached more than 10,<> vehicles, and Aiways completely missed it. Yege (pseudonym), who has just left Aiways, told reporters that at the beginning of this year, Aiways had planned to expand its voice and sales in China through special cars and luxury ride-hailing, but before the relevant plans took shape, the company encountered an operational crisis.
In the past few years, China's new energy vehicle market has developed rapidly, and new automakers such as NIO, Xpeng, Lili, and Nezha have achieved annual sales of 2022,10 units in <>. Second-tier new car companies such as WM, AIWAYS, and Skyrim have not achieved a jump in sales scale.
Yege believes that several new car companies, including Aiways, which have recently encountered operational problems, have not grasped the opportunity of development in the past few years, and the potential reasons may not be consistent, such as Aiways has not made efforts in the domestic market, and there are problems with Tianji's product definition and continuous financing ability, etc., so that relevant companies have missed the rapid growth of new energy vehicles in the past few years. Since 2023, with the "leading price reduction" of Tesla and BYD, the intensity of market competition has further increased.
Cui Dongshu, secretary general of the Passenger Association, said that this year's complex market situation may accelerate the elimination of some weak brands with small sales scale and tight capital chain to a certain extent.
The annual sales of the above-mentioned car companies that have encountered operational crises have hovered at the level of 536,0 vehicles, and sales have further declined under the intensification of market competition and the crisis of corporate operations this year. According to data from the Passenger Association, in the first quarter of this year, the cumulative sales of Aiways cars were 237 units; WM Motor sold <> units in the first quarter of this year; Skyrim sold <> units. The quarterly sales of the above three car companies are no longer as good as the weekly sales of Li Auto.
Insufficient self-hematopoietic ability is a common problem of several new force car companies that have recently encountered operational crises.
"Compared with the current head of Ideal, NIO, Xiaopeng, Nezha, and Zerosport, new forces such as WM and AIWAYS have not successfully opened the market, and the operation of enterprises is almost completely dependent on external financing, and once the financing channels are not smooth, operational crises will follow." Yege told reporters that although among the new domestic car-making car companies, only Li Auto has achieved quarterly profits, and NIO, Xpeng, Zerorun and so on are still in huge losses, but these are still thousands or even tens of thousands of products sold every month, for enterprises, this means that hundreds of millions of yuan of cash can be recorded every month, plus cash reserves brought by IPOs, financing, etc., can still support the normal operation of enterprises for a certain period of time.
Ping An Securities released a research report saying that the continuous high R&D investment and rapidly expanding sales and service channels of new automakers will continue to drag down performance, and it is estimated that an annual revenue scale of 800 billion yuan is required to reach breakeven. According to the current price of 20,40~20,40 yuan per vehicle manufactured by the new forces, the annual sales volume of car companies needs to be <>,<>~<>,<> units.
In the case of insufficient hematopoietic capacity, the capital market tends to be calm, and the difficulty of financing increases to further aggravate the "survival crisis" of second-tier new force car companies. Zhao Longming, fund manager of Shanghai Investment Morgan, said in an interview with the media that new energy vehicles are facing stricter stock selection criteria and need to focus on finding more competitive companies.
After 2020, for new energy vehicles, the capital market entered a "cooling-off period", and around 2020, "Wei Xiaoli" went public in the United States, of which Xpeng Motors rose as much as 40% on the day of listing, and Li Auto soared 50% intraday. By 2022, on the first day of Leapmotor's listing, the closing price fell by more than 33% from the issue price.
At the same time, the planned IPOs of some car companies have been slow to land, and the valuation has also been much lower than expected.
In September last year, Huaxia Boya, a U.S.-listed education and training company, issued an announcement that it signed a binding letter of intent with Aiways to acquire all outstanding shares of Aiways. If the acquisition is completed, Aiways will achieve a "backdoor" listing on the US stock market. But so far, there has been no further news about the merger. WM Motor hopes to land on Hong Kong stocks through APOLLO Intelligent Mobility Group Co., Ltd., but like AIWAYS, there is no further news about WM Motor's landing on Hong Kong stocks.
A new round of knockout has just begun
Around 2017, new car-making forces sprang up, and He Xiaopeng, chairman of Xpeng Motors, said that there were 2017 new car-making companies in China in 300. But in the following years, new car companies such as Byton and Ranger eventually fell before mass production and became "PPT cars".
After 2020, despite the rapid growth of the new energy vehicle market, new forces such as Qiantu Automobile, although they achieved mass production of products, have never been able to open the sales situation, accompanied by the cooling of the capital market, financing difficulties, and finally collapsed.
Today, in the statistics of various calibers, only NIO, Xiaopeng, Ideal, Zerorun and Nezha five new car-making force enterprises, can stably harvest sales, these five car companies are also considered to be the top five new car-making forces.
However, since 2023, the competition in the new energy vehicle market has gradually become intense, and many car companies and supply chain executives told reporters that the new energy vehicle track is shifting from the "Spring and Autumn Period" to the "Warring States Period", and the fierce knockout competition is about to break out. In the first three months, WM, AIWAYS, and Tianji completed mass production of products, but the new second-tier automakers with small sales volume encountered operational difficulties one after another.
Industry insiders generally believe that from 2023 as the starting point, China's auto market will usher in a new wave of car companies eliminated, and some of the current leading new car manufacturers may also become the target of elimination.
In April, Li Bin, the founder, chairman and CEO of NIO, said at a media briefing that if the next monthly sales were still 4,1 vehicles, he and NIO president Qin Lihong would have to look for a job. Yege believes that what Li Bin said is certainly a joke, but it also implies that NIO's survival pressure is huge.
The current Chinese car market is showing a trend of head concentration. There are 148 automobile brands in the Chinese automobile market, including 114 Chinese brands and 34 foreign-funded brands, of which 20% of the head enterprises control more than 90% of the market share. Although it is known as a leading new automaker, except for Li Auto, the monthly sales of the other four car companies still hover around <>,<> units.
Starting from 2023, traditional independent leading car companies, including Geely, Changan, and Great Wall, will accelerate the transformation to new energy vehicles through organizational structure adjustment and planning of new energy sequences, and launch a considerable number of competitive products. Some leading traditional car companies, including BYD and SAIC-GM, have broken the past pricing system and achieved the "same price for oil and electricity" of new energy vehicles, enhancing the competitiveness of their products in the new energy vehicle market. Global auto giants such as Volkswagen and Toyota have announced that they will expand their R&D voice in China and launch new energy products that are more suitable for the Chinese market.
Deng Chenghao, CEO of Deep Blue Automobile, believes that the current stage of competition is no longer relying on one or two explosive cars to survive, enterprises need continuous cash flow and cash reserves that can be used for market competition, and strive for the overall operational efficiency, quality, scale, system capabilities, etc. of enterprises.
At present, in addition to ideal automobiles, new force car companies have generally not got rid of the situation of continuous losses, and the cash reserves of many new force car companies have shown a continuous shrinking trend; With the comprehensive transformation of traditional car companies and the continuous launch of products, new car companies will face direct competition with traditional car companies in more market segments. The management of a new automaker company believes that traditional leading automakers have strong R&D, supply chain, manufacturing and channel capabilities, and once they complete their turnaround, the emerging automakers will face a crushing blow.
Tesla CEO Elon Musk predicted at a recent shareholder meeting that the economy will be in a downturn in the next 12 months, and many companies will go bankrupt. Zhu Huarong, chairman of Changan Automobile, believes that in the next 2~3 years, it is conservatively expected that 60%~70% of brands will face shutdown and turnover.