Although it has only been widely concerned by the outside world in the past two years, from the timeline, Hezhong Automobile, which was established in October 2014, is actually older than Wei Xiaoli.
On the development path, Hezhong Automobile, which has been "sold" many times since its establishment, has almost taken a different path, which may be related to the financial ownership behind it. From local state-owned assets, housing enterprises to Internet brands, Hezhong Automobile is open to all, but only lacks professional investment institutions. But even so, it does not affect the status of Hezhong Automobile as the "second echelon of new forces". In 2021, the delivery volume of new cars of Hezhong Automobile was 69,674 units; By 2022, Hezhong Automobile can guarantee the delivery of more than "10,000" units per month on average. Judging by the standard of single-month delivery or cumulative delivery, Hezhong Automobile has properly led the new forces in building cars.
However, as we just said, Hezhong Automobile took an atypical financing mode in the early days, which greatly limited its ability to develop rapidly. At present, there are many reports that "Hezhong Automobile’s cash reserves are already stretched". To make matters worse, United Auto is still in the stage of making ends meet. According to the relevant announcement issued by the company’s shareholder 360 Group, Hezhong Automobile’s operating income in 2021 was 5,734.768 million yuan, with a loss of 2,907.7234 million yuan. When calculated in relation to the sales volume in 2021, Hezhong Automobile will lose about 40,000 yuan for almost every car sold. The only thing to be thankful for is perhaps the fact that Wei Xiaoli is in the same boat.
However, what many people can’t figure out is: the same sales volume is so large, and it is also losing money. Why doesn’t Hezhong Automobile seem to be seen on the street? If "Wei Xiaoli" gives people the impression of running all over the street, then the presence of Hezhong Automobile is really not strong. Some insiders have analyzed that this is because the brand awareness of Hezhong Automobile is not high, and there are not many stories and gimmicks in itself, so even if passers-by see it, they don’t recognize it, and if they recognize it, they lack corresponding discussion.
We flipped through the hot spots related to United Auto and found that only two things were mentioned most: (1) the capital injection of 360 Group; (2) I would like to invite Canadian artist Wu Mou Fan to speak for me. The former’s action has some controversy in the industry, while the latter is a direct rollover. It is said that the official even fired half of the public relations team for this. Looking back, it can be said that Hezhong Automobile is either inactive or overexert in marketing. It just comes and goes, but it has never succeeded in "taking the lead".
The brand itself can’t create heat, and managers have made no achievements in this respect. Most of the top executives of Hezhong Automobile come from traditional car companies. I don’t know if it is because of this reason that Hezhong Automobile is not good at "making" the topic for the facade. Although it is called the new force of building cars, it is still the genes of traditional car companies. In contrast, Li Xiang, Li Bin, He Xiaopeng and Yu Chengdong are all worthy of learning. On the other hand, Zhang Yong, CEO of United Auto, shouted in Weibo: "Nezha S is the best coupe within 1 million", which did not arouse any splash. In extension, the genes of traditional car companies in the bones also make Hezhong Automobile commit a common problem of traditional car companies: starting from To B and To G.
For a long time in the past, the label that Hezhong Automobile left to the outside world was "This car is running Didi", because its customers were either taxis or network car companies in the early days, which was very similar to the development path of Geometric Cars. Nearly half of the sales of Geometric Cars in that year were contributed by Cao Cao, a subsidiary of Geely. In addition, the equity of the early Hezhong Automobile was deeply bound with the industrial funds in Tongxiang, Nanning and Yichun, and the enterprises and institutions in these three places were also important digestion channels for the early sales of Hezhong Automobile. In other words, United Auto is the first bucket of gold earned in the public market, which is essentially different from "Wei Xiaoli".
In fact, CEO Zhang Yong has frankly expressed his views on this: "We also wanted to be a C-end market in the early days, but the situation couldn’t be opened at that time. In order to get some data support, we had to take the channels of To B and To G". Translated, another meaning of this sentence is: at first, our products were not very competitive, so it was difficult to take the C-end market.
No matter whether it is a black cat or a white cat, it is a good cat that can catch mice. For car companies, it is the most practical to sell their cars, but the source of the sustainable development of most new car-making forces is external financing. Neither To B nor To G is sustainable. After all, the former is better than BD ability, while the latter is relationship-driven. For investors, only C-side sales data have reference significance. Before holding hands with 360 Group, this was also the most questioned point of Hezhong Automobile. As you can see, in order to reverse the stereotype of the outside world, Hezhong Automobile specially added a category of "the proportion of private users at the C end" when releasing the sales data, which is not available in other new forces. According to Hezhong Automobile, this category has exceeded 90% by the end of last year. According to this, there will be at least 62,000 C-end users of Hezhong Automobile in 2021.
From To B, To G to To C, Hezhong Automobile has been difficult all the way, but even though it has successfully entered the second-tier echelon, Hezhong Automobile still gives the impression that it is "exclusive to young people in small towns", which is related to its vague positioning at the beginning. At the beginning, United Auto didn’t understand where its customer base was, and its top priority was to build the car. It was not until Nezha U came out that Hezhong Automobile decided the route of "encircling the city from the countryside". Then you can see that many large supermarkets have the figure of "Wei Xiaoli", but when did Hezhong Automobile only appear in places like Auto Parts City?
Another aspect of unclear positioning is that United Auto initially thought that the name "Nezha" didn’t sound high-end. At first, it didn’t even let go of channels and advertisements. The original Nezha U was named United U. Only after Ne Zha got angry later, the management decided to continue to use "Nezha" to name its products.
After sorting out the positioning problem and gaining a certain mass base, Hezhong Automobile finally remembered to be "upward", and the product that bears the heavy responsibility now is Nezha S. But just like all similar brands, it is indeed difficult to change from low to high. If you don’t believe me, go and see Xiaomi next door. So far, the label of "diaosi" has not been completely torn off.
However, there are different views in the industry on whether Hezhong Automobile has succeeded in breaking through. Zhengfang believes that most of the 16 cities with sales of Hezhong Automobile exceeding 1,000 last year are first-tier cities and new first-tier cities, including Beijing, Shanghai, Nanning, Zhengzhou, Wenzhou, Guangzhou and Chengdu, which is enough to illustrate the depth of the brand. However, it needs to be understood that the development of the low-end electric vehicle market in the past two years has been ignited by the "old man music" such as Wuling Hongguang MINIEV, and there are also many fans of Wuling Hongguang MINIEV in traditional first-line areas such as Beishangguangshen and Shenzhen, which is bound to indirectly increase the market popularity of Hezhong Automobile, so to some extent, we have reason to believe that Hezhong Automobile is just standing on the cusp, not taking off by itself. In turn, this can explain why Hezhong Automobile is selling at a loss. After all, the whole low-end electric vehicle market is "selling at a loss". Fame is there, but the wallet is getting tighter and tighter.
At present, there is still the biggest question: how far can Hezhong Automobile go?
Some time ago, the news that 360 Group gave up the capital increase of Hezhong Automobile was heated up, and the reasons were speculated by all parties. For Zhou Hongyi, the new energy vehicle market has officially entered the stage of melee in the Red Sea, and "reshuffle" is inevitable in the near future, so prudent investment is necessary; For Hezhong Automobile, without the continued support of the 360 Group, it is probably a matter of life and death. Li Bin, the founder of Weilai Automobile, famously said that "the threshold for building a car is at least 20 billion yuan". If the estimation is correct, Hezhong Automobile still has a certain gap from this threshold, and the remaining cash reserves are probably only enough to continue burning for 1-2 years.
On second thought, even if Zhou Hongyi resists the pressure and continues to inject capital, United Auto may not be able to run out in the next stage, because it lacks certain advantages in core technology. In the early days, the products of Hezhong Automobile were obviously "changing from oil to electricity". After Nezha V and Nezha U, Hezhong Automobile began to build some self-developed technologies, and during this period, it also embraced the thighs of 360 Group, Huawei and Blackberry. However, today, there are only a handful of technologies that Hezhong Automobile can get its hands on, and the "mountain and sea platform" is more discussed.
There is another point: United Auto lacks new stories to tell. The key point of attacking the city in the electrification era is to occupy consumers’ minds, which requires brands to provide consumers with a good story. Similarly, taking "Wei Xiaoli" as an example, Weilai Automobile takes a high-end private domain traffic route, and there are stories about the third space and power exchange devices to tell; Xpeng Motors is playing with technology and has made great achievements in intelligence; The ideal is to benchmark the family car and focus on the SUV field with extended-range power. It’s Hezhong Auto’s turn, and it’s hard for you to think of any picture, and the biggest reason why most car owners decide to buy Hezhong Auto is "it’s the least like the old man’s music at the same price" and "it has the best space in this price range".
Obviously, United Auto lacks some Internet thinking, and the wisest choice seems to be the direction of "cost performance" on the premise of being too honest and responsible. However, "cost-effective" can not effectively build a moat of the brand, nor can it deeply connect the brand loyalty of consumers. Once the horn of "breaking up" sounds, potential users will only be scattered. This is a price dilemma that has to be broken, otherwise United Auto will eventually be stuck in a low price like Chery, BAIC and Weimar.
EV said:
"Surrounding the city from the countryside" is an effective survival mode for the early United Auto, but today, when Zero Run and Weimar have chosen to list on the Hong Kong Stock Exchange, United Auto must find a new brand focus. Otherwise, the next chapter of the story is bound to be a chicken feather.
For Hezhong Automobile, it needs not only continuous cash flow, but also correct decision-making at key nodes. There are still many challenges before Zhang Yong.
