Weimar, once one of the "Four Little Dragons of the New Force", has reached the edge of life and death. Although it has tried its best to say that it will not lie flat, let alone fall, there is still a question mark about where it will go in the future. The root cause of Weimar's failure is largely due to insufficient attention to research and development. Insufficient product core capabilities have led to the company's defeat in this fierce competition of new energy vehicles.
WM Motor, entering the countdown?
Recently, founder Shen Hui said that he attended the Munich Auto Show in Germany and then transferred directly to New York, the United States.
After submitting its listing prospectus at the end of May 2022, WM Motor boosted its sales, but it plummeted a few months later. In December, Weimar's monthly sales even dropped to double digits. Less than 30,000 units were sold throughout the year.
In October this year, according to an announcement from the National Enterprise Bankruptcy and Reorganization Cases Information Network, WM Motor Technology Group Co., Ltd. applied for pre-reorganization on October 9, and the handling court was the Shanghai No. 3 Intermediate People's Court.
Weimar, which was once the most promising new force, together with Weilai, Xiaopeng and Ideal, is known as the "Four Little Dragons of New Forces". Why has it come to this point?
Weimar in the darkest hour:
The APP was temporarily suspended and the IPO failed...
In fact, as early as 2021, Weimar has already revealed its crisis, and it has not announced sales for a long time.
In the past few years, WM Motor has not been going smoothly on the road to IPO. In September this year, WM Motor officially announced that it had terminated the listing process with Apollo on the Hong Kong Stock Exchange. WM Motor attempted to IPO three times, all of which ended in failure.
After entering 2023, WM Motor's operating conditions are getting worse and worse, with a series of news including factory shutdowns, wage arrears, and becoming a person subject to execution.
During this period, WM Motor did not think about saving itself, found Kaixin Automobile, and signed a non-binding letter of intent for merger and acquisition. Lin Mingjun, chairman of Kaixin Automobile, commented on WM Motor: The brand and product positioning are very consistent with Kaixin Automobile’s development plan.
Unexpectedly, Kaixin Auto could not save Weimar. Only a month later, WM Motor was in trouble again.
WM Motor, which announced on the front foot that it would be acquired by Kaixin Automobile, turned around and applied for pre-reorganization.
At the same time, car owners who bought WM Motors even had their car systems freeze and could not be turned on. Many WM Motor owners reported that the car and engine could not be used normally. On October 13, WM Motor officially stated that the car and engine system had returned to normal.
In the announcement, WM Motor mentioned that in recent years, due to the impact of the epidemic, the sluggish capital market, significant fluctuations in raw material prices, and difficulties in financing, WM Motor has fallen into operational difficulties.
The car cannot be sold, which makes the already poor wallet even worse. According to the prospectus, WM Motor suffered losses of 4.145 billion yuan, 5.084 billion yuan and 8.206 billion yuan respectively from 2019 to 2021. The cumulative losses amounted to 17.4 billion yuan.
It is worth mentioning that despite so many things happening, WM Motor is still emphasizing, "Weimarane will not lie flat, let alone fall down."
"Live like an animal",
Now there is nothing but chicken feathers everywhere
Looking back on the history of WM Motor, we have made more money than anyone else along the way, and our starting point was even higher than that of Wei Xiaoli.
Shen Hui, the founder of WM Motor, was once the vice president of Geely Group and chairman of Volvo China. His biggest achievement at Geely was to single-handedly manage the merger and acquisition of Volvo.
Because of the strong halo of its founder, WM Motor was backed by a number of capital tycoons from the very beginning, including Baidu, Tencent, Sequoia Capital, SAIC, SIG Haina Ventures, Hefei State-owned Assets, Hengyang State-owned Assets, Guangzhou Agile and Hong Kong capital, etc., who all joined the business.
It also obtained car manufacturing qualifications quite early, in 2016. After that, WM built its first factory in Wenzhou, and a second one in Huanggang, Hubei a few years later, with a total production capacity of 250,000 vehicles.
Regarding spending a lot of money to build a factory by itself, Shen Hui said that people who are honest in the industry must value assets, which means that they are committed to users and teams and "will not run away in two or three years."
When it was first founded, Weimar was full of confidence. In 2019, Shen Hui once announced at the WM new car launch conference that "many new car-making forces will not survive 2019."
I had the confidence to say this at the time. After all, WM Motor had achieved good results this year. WM Motor's sales in 2019 were second only to Weilai Automobile, becoming the second-largest domestic car-making force in terms of sales.
With so much financing, Weimar chose to take a shortcut in building cars, that is, to spend money by "buying, buying, buying":
The intelligent assisted driving system relies on Baidu Apollo, and the car-machine intelligent voice is purchased from iFlytek. Others mainly rely on buying and selling, and even the user center is outsourced.
At the same time, in terms of marketing, WM Motor is not short of money at all. It hires celebrities to endorse its products. Many celebrities such as Cecilia Cheung, Hua Shao, Dong Zijian, etc. have all supported WM Motor.
As everyone knows, these money-burning operations also accelerated Weimar's crisis.
By 2022, WM's capital chain pressure has emerged. Almost no new cars have been launched this year, and the WM7 that was originally planned to be released has not yet been released.
In Beijing, almost all WM offline stores have been closed, and nearly half of the showrooms in Shanghai have also been closed. Some suppliers who were in arrears with payment began to stop supplying parts to WM Motor. WM's logistics partners Anji Zhixing Logistics and Chongqing Changan Minsheng Logistics successively sued WM Motor.
Seeing that the pressure was too heavy, in November last year, Shen Hui issued an internal letter to all employees, in which he bluntly stated that WM Motor was facing greater financial pressure. Shen Hui stated in the letter that in order to cope with financial pressure, the company's management took the initiative to cut salaries by half, and the company's overall operating expenses will also be streamlined. Employees said that year-end bonuses and car purchase subsidies have been suspended.
I also didn’t forget to quote the movie line on Weibo: “Live like an animal.” It seemed particularly tragic.
But reality proves that "survival" is still a question mark.
Lessons from Weimar,
Taught a lesson to all colleagues
While Weimar was struggling, the new domestic forces at the same time not only survived, but each also had its own characteristics.
NIO is well-known in the field of battery swapping. Xpeng Motors has a unique intelligent assisted driving system. It is ideal for refrigerators, sofas and large color TVs. Even brands such as Nezha and Leapbo have gained a group of users due to their ultimate cost-effectiveness.
But when it comes to Weimar, people can't think of too many differences and highlights.
Even Shen Hui had to admit this. In an interview with "Chinese Entrepreneur" magazine, Shen Hui confessed that he did not make outstanding products in the early stage to accumulate seed users, which needs reflection.
"Weima hopes to make cars that everyone likes from the very beginning, and hopes to be like Volkswagen and Toyota. However, if you look closely, the cars of these brands are relatively popular and relatively mediocre. In the long run, WM's intelligence has not become its core differentiation advantage."
The root cause of all this is insufficient attention to research and development.
WM Motor, which had no shortage of money at that time, often used the money to build factories, buy production qualifications, or hire celebrity spokespersons, but it neglected the most critical research and development of car building.
Prospectus data shows that from 2019 to 2021, WM Motor's R&D expenditures were 893 million yuan, 992 million yuan and 981 million yuan respectively, accounting for approximately 50.7%, 37.1% and 20.7% of total revenue in the same period respectively. The total R&D expenditure in the three years is 2.866 billion yuan, which is far behind the investment of "Wei Xiaoli".
As time went by, the shortcomings in car manufacturing capabilities gradually became apparent, and investors no longer bought into it.
In 2020, WM Motor completed listing guidance on the Science and Technology Innovation Board and submitted a prospectus, but it failed to do so. The listing review has become increasingly strict and difficult. On June 1, 2022, WM Motor submitted an IPO application to the Hong Kong Stock Exchange, but failed to pass the hearing within 6 months, and the prospectus has become invalid.
In recent years, Byton, Reading, AIWAYS, etc., these companies that once had no shortage of financing in the field of new energy vehicles, have fallen one after another, which also illustrates the truth:
Car-making is not only a money-burning business, but also a craft. Just telling stories to get money, time will prove that sooner or later, it will not be able to support the new energy trend.
Conclusion:
In 2015, when Shen Hui first started his business, he named the car company "Weltmeister", which comes from the German Weltmeister, which means "world champion."
From Weimar to Guima, in fact, Weimar's current situation has been secretly doomed since it was burning money in places where it shouldn't be.
In fact, losses are a problem faced by every new power car company. In this fierce competition, companies that can survive should understand one thing:
In the field of new energy vehicles, especially in key technologies such as autonomous driving, smart cockpits and automobile manufacturing, knowing how to raise funds is not a must-win. Only by mastering the ability of independent innovation can a brand defeat the enemy with one move.
Being able to tell stories is a common practice in the cycling circle, but if the product is not enough, no matter how many stories you tell, it will only become a gimmick.
Author|Jiang Yue
Source|Jincuodaocheping review (ID: jincuodaocheping)