Wang Chuanfu And Li Shufu'S Road To Happiness

Chairman of Byd Co (information map)

The struggle between two blessings

Wang Chuanfu and Li Shufu seem to be involved in the two whirlwinds of "blessing".

To ask BYD and Geely who are more internationalized is like asking who is more crazy about Li Shufu and Wang Chuanfu.

This is the most ambitious two madman in China's automobile industry.

One said, "the car is only four wheels plus two couches"; the other said, "a million cars are just a bunch of steel in my view"; one as early as 2001, it was predicted that general motors and Ford could encounter bankruptcy crisis in ten years; the other vowed to be the number one in 2025.

This is the two "madman" and the two "dictator".

Wang Chuanfu said, "in BYD, I have nothing to say. Our business has only one voice, that is my voice"; Li Shufu said, "the lucky ship is bigger and the steering is just me."

Now, looking back, both Wang Chuanfu and Li Shufu have the capital to talk big.

To pull Buffett and Bill Gate, the two richest people in the world, to cheer for BYD's platform, Wang Chuanfu has achieved a world-class level in China's automobile industry; Li Shufu has become Volvo's first multinational vehicle enterprise in China, and has achieved another world-class level in China's automobile industry.

In the eyes of others, they are a group of people who are wandering in the two extremes of "madman" and "hero". They do not mean moderation, nor do they want to be refined.

Perhaps they are not born so, but as two private entrepreneurs who break into the Chinese automobile industry, they seem to have to do so, because this is the natural law of survival of the fittest.

Similarly, Liu Yonghang, a private entrepreneur, once said: "we are all grass under the stone slab. As long as there is a little crack in the stone slab, we must strive to grow up to see the sunshine, but I never want someone to water and fertilize me."

The choice of the automobile industry, the forbidden area of the private economy, means that a larger, heavier and denser stone slab will be placed on them. They have to take a more decisive attitude and concentrate all their strength to put their lives in space.

This is exactly the rationality of Li Shufu's and Wang Chuanfu's "madness" as grass roots.

In order to obtain the hardship of "quasi birth certificate", Li Shufu had to drive the car to bear the pressure of capital market sell-off, and they had to "crazily" for Wang Chuanfu.

In the initial stage, if they stop spitting, consumers will not hear their voices. If they stop expanding, they will have difficulty in the automobile industry.

Conversely, it is precisely because they are halfway out of the family, from the oblique thorn to kill grass roots strength, their body is also a few shackles.

They call it "technological intimidation", whether it is BYD's "standing on the shoulders of giants" or Geely's "painted red". They start from imitation, and rely on the accumulation of manufacturing industry and China's comparative advantage to compete with foreign and joint venture brands on the basis of total cost leadership strategy.

On the other hand, most of the state-owned automobile enterprises that are mainly supported by the state are following the development path of joint venture, learning technology and independent brand.

The biggest difference between these two paths is that the path of the joint venture first focuses on China's market opportunities. It is precisely to occupy this huge potential market to go abroad to find partners and learn technology. The path of Geely and BYD first focuses on China's manufacturing advantage, which is based on the comparative advantage made in China and chooses the new market of automobiles.

One is to compete for the Chinese market based on learning foreign technology, the other is to build a brand based on China's advantages.

In this way, it is not difficult to understand why the first to embark on the path of internationalization is not the state-owned car companies that are everywhere, but the roots of Geely and BYD.

Lev Tolstoy said, "happy families are always alike, but unhappy families have their own misfortunes."

On the road of internationalization, Wang Chuanfu and Li Shufu share the same happiness, but in order to achieve this happiness, they are going on different paths.

Li Shufu's path is like making buckets, trying to patch up all the short boards to be as long as the longest wooden plank, so as to maximize the barrel capacity.

This is a kind of planarization upgrading road. The field of vision has never left the automotive industry. Wang Chuanfu's path is more like climbing, left foot on a higher stone, and his right foot on a higher stone, then he uses his hands and feet to climb a new height.

This is a three-dimensional upgrading road. The car is the largest layout in its field of vision, but it is not the only one.

This difference is not related to the background of the two generation.

Wang Chuanfu, who was born in technology, focused on the improvement of manufacturing capability in the process of expansion. Whether it was to decompose the automatic production line into artificial equipment or to integrate vertically on the supply chain, it was reflected everywhere. But in the process of upgrading, Li Shufu, in the process of upgrading, paid more attention to the improvement of technological level through acquisition. The acquisition of manganese copper in Britain was aimed at upgrading platform technology, acquiring DSI in Australia, in order to master gearbox technology, and acquire Volvo, in order to comprehensively enhance Geely's talents, technology and brand.

Make up for short, in order to better grow.

Neither Wang Chuanfu nor Li Shufu has ever deviated from their core strengths in this process.

Li Shufu raised the level of technology through mergers and acquisitions, in order to better play its advantages in manufacturing, in order to achieve its ambition in the automotive industry; Wang Chuanfu focused on improving manufacturing capabilities, the purpose is to further improve the technological advantages, so that the development of new energy vehicles planning has a solid foundation.

However, fortune and misfortune depend on it.

Wang Chuanfu and Li Shufu have risen in the automobile industry as a "grass root" posture. Today, they have led the internationalization of China's automobile industry. Can they still maintain their original "grassroots" spirit?

In Geely's acquisition of Volvo, we have seen the huge capital of local governments.

The first problem facing Li Shufu after "red top" is Volvo's choice of competition in China.

In the case of BYD's crisis, Wang Chuanfu did not actively shrink the line that had already been stretched too long. Instead, he invited Buffett and Bill Gate to launch two crises.

Even the two people of Wang Chuanfu and Li Shufu seem to be gradually involved in the whirlpool of two "blessing".

Most of the dealers in the BYD channel crisis were Geely, while BYD claimed internally that the crisis was behind the "J brand".

I hope that Li Shufu and Wang Chuanfu can still adhere to the essence of "grass roots" after climbing the ranks of officials and foreigners, instead of turning themselves into "red top" and "comprador" against the "grass roots".

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Li Shufu "painted red"

The acquisition of Volvo allowed Geely to become the first truly multinational vehicle company in China.

Also let the present Li Shufu become the most important local government to compete for Volvo project localization project location.

Grass roots

The story of Li Shufu's entry into the automobile industry is a tragedies of "grass roots".

Li Shufu, who had opened a photo studio, sold decoration materials, and produced refrigerators and motorcycles, used to rebuke officials when he declared a car project. "You want to build a car just to commit suicide", "then give me a chance to commit suicide!" this is Li Shufu's answer.

Li Shufu later recalled that when the car was originally built, because there was no "quasi birth certificate", the media did not believe that banks did not believe that the industry did not recognize it, and even auto parts companies were reluctant to sell spare parts.

Because of the lack of funds, Geely did not buy the product platform as China did in the morning. Instead, it took the lowest cost of the road: using existing models to spin off and imitate learning.

The first car made by Geely, the pride of Tianjin, was built in the absence of car experience.

Perhaps most large companies have similar practices at the beginning, but Geely is different from that in its large scale manufacturing of low-end economy cars rather than choosing fashionable products to survive.

Li Shufu's train of thought is simple: we can't build a better car than others, so we need to build cheaper cars than others.

For this reason, Li Shufu pursued the pursuit of frugality and cost control to the extreme: he dared to offer huge sums of money to reward the prominent cost controls, but he wore a lucky work suit and dozens of leather shoes and drove the ordinary cars produced by the company.

In line with the principle of "spending money to do great things and doing things without spending money", Geely has established the leading edge of total cost.

The result of this kind of cost control is that Geely sells "auspicious Xiali", "Geely's Civic domain", "Geely's prestige" and "auspicious corolla" at half or even lower prices.

After launching the pride, the United States, Japan and the European Union on the "Xiali" platform, Geely established its own low price advantage through "low cost and low level imitation" and found its own foothold.

Transformation

It was from the imitation of the Xiali platform, and Li Shufu spared no effort to pplant TOYOTA's strategy to Geely.

However, in 2003, a lawsuit in TOYOTA upset the development of Geely.

The terms of TOYOTA's claim against Geely are two: first, the auspicious American and Japanese car logo is suspected of infringing TOYOTA's trademark rights; two, Geely uses the TOYOTA engine produced by TOYOTA in Tianjin, but claims to use TOYOTA's engine.

As the first case of intellectual property rights in China's automobile industry, this lawsuit has caused great shock in China's automobile industry.

The case took months, and finally the second intermediate people's Court of first instance decided in Beijing: the accusation against TOYOTA was not supported.

Although this lawsuit did not lose, Geely sounded the alarm for Geely: in the past, the mode of "low cost and low level imitation" could not continue.

Li Shufu, who won the lawsuit, chose to give up. He did not want to play cat and mouse games with foreign brands, and Geely wanted to master the rules of the game.

Although Geely officially announced the strategic pformation in the next few years, the internal pformation began in 2003.

The 2004 free ship was seen as the beginning of the normalization of Geely products.

On the development of free ship, Geely invited Korean Daewoo design body, invited the Korean tower metal design mold, and the first time adopted the design method of the full mold.

The development of free ships is a tuition fee paid by Geely.

After paying the tuition fee, Geely began to optimize the two words: "red" and "low cost": imitative innovation and independent innovation began to become the premise of building "low cost".

The slogan of Geely also changed from "the car that people can afford" to "a good car that people can afford".

In May 2007, Geely officially announced the strategic pformation.

In the future and 08 free ships, Geely is also equipped with its own R & D engines and gearboxes. These pure Geely blood core technologies become a sign of Geely products.

Li Shufu also took out 3 million 600 thousand yuan to collect the new vehicle logo. He seems to be trying to show a determination: changing the vehicle logo, Geely will say goodbye to the past and remove the last trace of the imitation from Geely's body.

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Internationalization

However, in the process of Geely pformation, Li Shufu realized that the gap between himself and the international advanced level is so great. The gap between technology and technology is a prominent aspect, and the more prominent is the ability to internationalize.

"The only way for private enterprises to build cars is internationalization and export."

As early as 2003, Li Shufu, who had just gotten the "quasi birth certificate" of the car, began to plan for internationalization.

In February 2003, 40 American and Japanese cars departed from Ningbo port for the first batch of cars exported to the United States by Geely.

However, such a four door car in the United States market day is not beautiful, and finally failed.

At that moment, Geely realized that he had made radical mistakes in internationalization.

Li Shufu changed his mind and bought it.

He first joined the then Huachen automobile master to merge and edit the rover motor in England, and later failed because of the internal turmoil in Huachen.

In 2006, Li Shufu found another object: British manganese copper.

Geely became the single largest shareholder of manganese copper.

British manganese copper is one of the four largest brands in the UK, which is tied up with Rolls-Royce. It was managed by the same board many years ago, and manganese copper has been a long-term substitute for Rolls-Royce's body and parts.

After holding manganese copper, Geely realized the London classic taxi by way of setting up a joint venture company. The British Shanghai has become an important part of Geely's brand strategy.

With this acquisition, Geely has also been able to understand and learn from the management system of foreign automobile enterprises: from financial structure, salary system to factory management system and supplier management.

Geely also sent a number of key management personnel to the British factory to learn.

It is these internationalized talents who allowed Geely to acquire group management in financial, technical and administrative aspects after acquiring DSI in 2009.

The acquisition of DSI, Australia's largest automatic pmission company, is an important step in Li Shufu's international road.

Automatic pmission has been the technical difficulty of the domestic independent brand. Geely has been able to match the automatic pmission in the whole series through the acquisition of DSI.

At the end of this year, the geely vision will be the first to carry the new DSI gearbox, and then many vehicles including imperial, manganese copper taxi and EC8 will adopt DSI new pmission.

In September 2009, Goldman Sachs's Private Equity Investment Firm invested in Geely, which is the best endorsement of international capital to Li Shufu's internationalization ability.

Goldman Sachs injected Geely with expertise in management, finance and marketing, all of which benefited Geely in its acquisition of Volvo.

Red top

Geely's acquisition of Volvo won a lot of praise, but it also gained many worries about the acquisition.

All the worries almost point to one point: will Geely's acquisition repeat the failure of SAIC's acquisition of Shuanglong? - you know, even the giant Ford didn't manage Volvo well.

Outside worries are not as serious as Li Shufu imagined.

The biggest advantage of Geely's acquisition of Volvo lies in the huge Chinese market and the world-renowned Chinese cost advantages. These two advantages are exactly what Ford does not have.

Similarly, Volvo's brand and technology advantages are far less important in the eyes of Ford's new army in the eyes of Ford, a century old shop.

Because China has the largest automotive market in the world, Geely, after acquiring Volvo, can rely on the Chinese market to solve the problem of Volvo's scale.

Similarly, because of China's unique cost advantages plus Geely's low cost genes, to a certain extent, to solve the problem of Volvo's high cost.

This is not to say that after the acquisition of Volvo, Geely's internationalization is a smooth road.

Now that the industry has realized that there is no miracle behind the story of snake swallow elephant, Li Shufu's Geely has swallowed up Volvo while eating into local government's investment.

The acquisition fund has been declassified: in addition to Geely's own investment of 4 billion 100 million yuan, there are 3 billion yuan invested by the Daqing SASAC in Heilongjiang, and 1 billion yuan has been invested by Shanghai Jiading Development Zone and Jiading SASAC.

In other words, the amount of government investment in Daqing and Shanghai Jiading accounts for 49% of the acquisition fund.

In fact, there are more than Daqing and Shanghai Jiading, such as Sichuan Chengdu.

It is said that Chengdu has already raised 2 billion yuan from the Everbright Bank and Bohai bank through trust and bank financing products to Geely as the operating capital after the acquisition of Volvo.

This is precisely what many local governments are fighting for the location of Volvo's Chinese production plant after the dust settled.

In the face of fierce competition from all over the place, Li Shufu could only keep silent because he could not afford to offend anyone.

Although today's Li Shufu can not be called "official business", it has completely left the identity of "grass roots".

If Geely is likely to be indigestible after acquiring Volvo, this "red top" status will be one of the factors: regardless of the objective conditions of the industrial layout, the localization of Volvo will only be determined from the perspective of "repay kindness" or maintain the relationship between government and business, and will lay a ground for Volvo's long-term development in China.

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Wang Chuanfu's Snake game

Bobby's trip to China at the end of September was so intense that the Chinese tycoons, who clutched their money bags, made Wang Chuanfu earn a full pot.

Barbie's 3 day trip in China, except 5 hours of charity dinner, contributed to Wang Chuanfu and his BYD all other times.

Behind the brief noise, BYD's first dealer crisis is still waiting for him to deal with.

At the same time, the two richest people in the world can advertise for BYD at the same time. At the very least, Wang Chuanfu has set up a world-class benchmark in the Chinese automobile industry in the international operation of the brand.

Starting from the F3 of TOYOTA corolla, can BYD drive from the "Shanzhai" road to the world brand?

Brand desire

The starting point of all Wang Chuanfu's dreams comes from batteries. Of course, cars are no exception.

When BYD announced its march into the auto industry in 2003, Wang Chuanfu said, "I'll be driving a car for the rest of my life."

Few people are optimistic about Wang Chuanfu's nearly crazy behavior. Fund managers told Wang Chuanfu that if BYD insisted on making cars, they would sell a lot of BYD's stock until it was "tossed to death." indeed, BYD announced the completion of its two day acquisition of Qinchuan, and BYD ushered in the Fund Institution's "washing up", and its market value evaporated nearly HK $2 billion 700 million.

At that time, BYD has made the world second in the battery field, and has done a considerable scale in mobile phone accessories.

But a problem has also emerged. The bigger these businesses are, the more BYD will be able to get rid of their dependence on customers.

For the then BYD, the ceiling of development is within reach.

It is this dilemma that has strengthened Wang Chuanfu's determination to make the pition from car to car.

From batteries to cars, it seems that there is no intersection, and outside doubts are also focused on this.

But Wang Chuanfu doesn't think so. He says BYD's ultimate goal is to build electric cars.

Wang has his own idea that BYD is already a battery expert. Once learning how to build a car, the combination of the two can be realized.

Wang Chuanfu's explanation is interpreted as an excuse for his investment pfer.

In fact, this explanation gives only part of the reason why BYD makes cars, and the more fundamental reason is that Wang Chuanfu wants to build BYD brand in the market.

From the beginning of battery production, Wang Chuanfu was deeply aware of the enormous benefits that can be brought about by combining the balance of world industrial development with China's comparative advantages.

Wang Chuanfu is unwilling to allow BYD's success model to be confined to the framework of OEM. In the mobile phone industry's lost brand dream, Wang Chuanfu wants to borrow the auto industry.

This is fully reflected in the listing of BYD's first car, F3.

In order to let the F3 hit, and in order to make the BYD brand deep in the market, BYD has adopted an original sub - station itinerant market model.

From September 2005 to May 2006, BYD took 8 months to hold 14 rites in 14 cities.

So intensive, BYD is to create more opportunities for BYD and F3 to create more contact with consumers.

As Xia Zhibing, general manager of BYD automobile sales company, said, "before making a car, BYD is just a brand in the sense of B2B. It is the automobile, or the success of F3, that makes BYD finally become a brand in the eyes of consumers."

The rise of Shanzhai

Shenzhen, the world's mobile phone manufacturing center, is the "Shanzhai city".

Any brand mobile phone with promising market prospects will soon be able to find imitation products in Shenzhen, and it can also upgrade and innovate according to Chinese consumption habits.

BYD has been immersed in Shenzhen's mobile phone industry for a long time.

Once the F3 is launched, it is in the doubt of "Shanzhai": not only does it look exactly like TOYOTA corolla, but also some parts can even be used with corolla! So far, many F3 owners will change BYD's logo to TOYOTA's.

F3 is just the beginning. Since then, F3R, F6 and F0 have been introduced to the recently launched M6, and there is no suspicion of Shanzhai.

At the beginning, BYD was still cautious about defending this kind of doubt. Later, it was found that once it was called "China Version corolla" or "Chinese version of big tyrant", it would save much time for product promotion.

So they simply put themselves on the label of a Chinese version of a certain vehicle.

However, unlike some cottage mobile phones, as long as profits do not need brands, BYD's "Shanzhai" road is a strategic system combined with its cost leadership strategy from the beginning.

For the "cottage" accusation, Wang Chuanfu called it "standing on the shoulders of giants": "we use a large amount of non patented technology, and the combination of non patented technology is our innovation."

From battery development to automobile manufacturing, Wang Chuanfu has been sniffing at the so-called "patent": "a new product development, in fact, 60% comes from the open literature, 30% comes from ready-made samples, and the other 5% comes from raw materials and other factors, and its own R & D is actually only about 5%."

This is an unconventional strategy, which is different from basic research, applied research to market test, and then to the gradual process of market promotion. BYD calls it "reverse research and development".

Aim at the advanced models in the world, buy and dismantle the advanced automobile samples, measure, decompose and detect them, study their structures, test their performance, analyze their components, and do not have patents to do so, and have a patent change.

This not only avoids patent traps, but also greatly shortens the distance from the forerunner, and can catch up with the forerunner in the shortest time and at the fastest speed.

It is based on this understanding that BYD has also used the strategy of "human sea" which depends on its cost leadership strategy in R & D.

Wang Chuanfu has repeatedly stressed the advantages of these low-cost R & D personnel: "BYD has a" 301 "formulation, that is, 300% of the number of engineers in exchange for 1% of the lead, in fact, it can not only lead 1%.

Can we tie these elite together and compete against our competitors with 300% in quantity? Can we not lead? "{page_break}

New Energy Blueprint

If only relying on "Shanzhai" tactics and a car dream, Wang Chuanfu certainly can not touch Buffett.

Wang Chuanfu touches the stock god, is based on the new energy technology and China's manufacturing advantages based on a huge new energy industry blueprint.

The first thing to do is to make batteries and then make cars, and then reassemble large batteries into cars. This is Wang Chuanfu's blueprint for new energy vehicles.

In this blueprint, Wang Chuanfu almost used all the industrial foundation of BYD: the vehicle is the carrier, the battery solves the problem of energy storage, and the foundation of making electronic accessories can further help solve the problem of power pmission and charging equipment.

On this basis, Wang Chuanfu further, based on battery energy storage technology and charging and discharging technology of electric vehicle charging station, BYD has begun to expand comprehensively in new energy services such as household energy system and energy storage power station.

This is the origin of the three major industrial clusters of IT, automobile and new energy that BYD has repeatedly mentioned today.

In this blueprint, people can clearly see the technical thread running through it, but it is often easy to overlook the other two main lines that Wang Chuanfu also values: manufacturing and brand.

It is one of the reasons for BYD's rapid rise in the battery industry that it dismantled huge investment full-automatic production lines to manual operation based assembly lines and replaced expensive automation equipment with self-made clamps and hands.

This mode of artificial replacement of automation equipment has been continuously replicated and improved in various industrial clusters of BYD.

At the same time, Wang Chuanfu further extended this experience to the entire supply chain system, as large as the car mold is small to the tank on the car. As long as Wang Chuanfu is a labor-intensive product, BYD will do it by itself, which is Wang Chuanfu's "vertical integration" of the supply chain.

If we know that the secrets of manufacturing have led BYD to win the leading edge of cost, the careful management of the brand is another edge of Wang Chuanfu's hand.

Although the three letter combinations of "BYD" are not good for the automotive industry, Wang Chuanfu never thought of abandoning the three letters, but also tried hard to change BYD's previously blue and white vehicle logo to the three letters.

What Wang Chuanfu wants to shape is BYD's technical expert image in the new energy field.

Although BYD's brand in the consumer market starts from the automotive industry, Wang Chuanfu still wants to return it to the historical starting point of this image.

In the promotion of the internationalization of brands, apart from Buffett, Wang Chuanfu has other brilliant ideas.

Shortly before, BYD and Daimler reached a joint venture agreement. The highlight of the agreement is that apart from the two sides will jointly develop and produce electric vehicles, the two sides will jointly create a brand new high-end electric vehicle that is different from BYD and Mercedes Benz.

This is a huge image enhancement for BYD brand itself.

Addition and subtraction

Let Buffett and Bill Gate at this time high-profile affirmation BYD, for Wang Chuanfu, this is not only a brand internationalization promotion opportunity, but also can help BYD to carry out a crisis public relations.

Before the arrival of Buffett, BYD is facing an unprecedented crisis. First, the two factory project in Xi'an was investigated by the Ministry of land for illegal land occupation. Then, because of the continuous decline in car sales, it had to reduce the annual target from 800 thousand to 600 thousand vehicles. Then, the BYD dealer's retirement network incident was in a great uproar.

This atmosphere, and even foreign media have speculated that Buffett's trip will take action on BYD, such as news that Buffett will criticize BYD and may reduce BYD's shares.

However, Buffett's trip not only did not reduce BYD's shares, but also surprised people to pull Bill Gate together, the whole BYD cheer for the platform, BYD's development prospects, it is generous remarks.

In particular, the dinner with the national distributor seems to be aimed at the dealer's retreat from the Internet.

Buffett's strong support not only helped BYD defuse the immediate crisis, but also became the best advertisement of BYD, so BYD's brand image seemed to be upgraded to a new level.

Just like the stock god shares BYD, BYD's automobile advertising language has been changed to "the choice of Buffett of the stock god". Without knowing this, BYD's advertising language will be changed again, and become the "joint choice of the stock god Buffett and the richest Gates".

However, for Wang Chuanfu, the root cause of the crisis has not yet been resolved.

BYD's success in the automotive industry is largely due to the record size of F3's production and marketing.

But after F3, BYD's new models have not been very optimistic except for F0's performance.

Against this background, BYD did not calm down to consolidate its foundation. It still attacked several times, and entered many fields including new energy service, LED electric light and so on.

The information now revealed from BYD even says BYD has planned to enter the field of appliance which is very competitive.

Wang Chuanfu is starting a game of snake.

On the other hand, compared with the new energy blueprint planned by Wang Chuanfu, BYD's actions in electric vehicles have been lagging behind expectations.

Although the F3DM of hybrid electric vehicles has been delayed several times, the result is still not ideal. The pure electric vehicle E6 is only experimentation in Shenzhen in the form of taxis.

On the traditional fuel powered vehicle, BYD has launched many models after the F3. It makes people wonder if BYD will become a fuel powered vehicle manufacturer or an electric vehicle manufacturer.

Perhaps these are opportunities that Wang Chuanfu sees.

But if BYD wants to go further on the world brand, Wang Chuanfu will have to learn to choose in addition to the power of Buffett.

A snake can't eat all the time.