“Price war is just an appearance. When there is no competitive strength, it is unbearable to fight price war, and it is unsustainable, and it will destroy the car ecology. This is a suicidal model, and it will not last long, but market competition is It’s so cruel, and it must end up in the knockout round.”
Talking about the price war in the Chinese auto market initiated by Tesla in the first quarter of this year, Gan Jiayue spoke directly and frankly.
Obviously, this year is a hard battle for all car companies, which is related to the future, or a matter of life and death. As the banner of Chinese auto brands, the outside world is of course concerned about how Geely will respond to the challenge? In other words, in the face of the new energy vehicle revolution, does Geely have the stamina to decide the future? During the Shanghai Auto Show, Che Yun took this question into a two-hour interview with the young post-80s CEO of Geely Automobile Group.
Gan Jiayue was born in Yongxiu, Jiangxi Province in 1981. He joined Geely after graduating from university in 2003. After working in various positions such as purchasing and finance, he officially became the CEO of Geely Automobile Group in March 2021. At a challenging time, Gan Jiayue took on the heavy responsibility of Geely Automobile for innovation and change. This also reflects the courage and determination of Li Shufu and his “aircraft carrier” Geely Holdings to face the future.
Dare to think and act is Li Shufu’s character, which is vividly reflected in a series of ups and downs and ups and downs since he started building cars 26 years ago, to the acquisition of Volvo and investment in Mercedes-Benz. This trait is also inherited and reflected in the core executives of An Conghui, Gan Jiayue and Geely. Dare to face problems, dare to innovate, be tolerant and open, this is the tradition and culture that Geely has always adhered to. This kind of culture has pushed Gan Jiayue to the fore, and also allowed us to glimpse the future of Geely.
When evaluating whether a car company is competitive, we need to understand the nature of the industry. Under this round of industrial transformation, what kind of industry is new energy vehicles? Starting from the industry first, what are the core key elements of the current competition?
During the conversation, Gan Jiayue’s answer was, first, the automobile industry is still a manufacturing industry, and the manufacturing system is still a key element of competition. Geely has been manufacturing cars for 26 years and has a strong industrial chain foundation and technical system; Second, the decisive battle of new energy vehicles has entered the second half, and intelligence is the key to the decisive battle. The integration of software and hardware is required, and Geely has carried out an in-depth system layout in terms of intelligence; third, automobiles are a cyclical industry. After several rounds of life and death, it has a strong anti-fragility. For this round of cyclical adjustments, Geely has a keen sense of it. After realizing the problem, it will react more sensitively than ordinary companies, and the adjustment will be more decisive and rapid.
In the first half of the new energy vehicles, there was no consensus. Various car companies had different views on whether new energy vehicles could rise and when they would rise. Therefore, companies that have seized the opportunity strategically have naturally gained market dividends. Obviously not in the second half.
From this year’s Shanghai Auto Show, various car companies spare no effort to attach importance to new energy vehicles, and their determination and urgency are clearly on the paper. That means the latency is gone and everything is in the spotlight. This is the stage of really fighting for systemic power and endurance.
Against this background, Gan Jiayue told us Geely Automobile’s thinking about the future of the battle in the new era from the two lines of technical products and corporate culture.
01.The confidence behind not participating in price wars
“The release of the Geely Galaxy new energy series represents Geely’s comprehensive and rapid transformation to the new. It is a manifestation of the phased implementation of the smart Geely 2025 strategy, and it also means that we have entered the second development stage of new energy value upwards.” This is the general mobilization issued by Gan Jiayue to more than 3,000 dealers and service partners of the Geely system across the country at the Geely Annual Business Conference in Sanya, Hainan in March this year.
Gan Jiayue has a very clear strategic understanding: the first stage of new energy development was to compete with “three electric technologies”, namely batteries, motors, and electronic controls, and to study “policies, subsidies, and prices” to promote new energy. develop.
In the current “second stage”, what we want to fight is hard power and hard technology. We are fighting for intelligence and networking, and we are comparing the comprehensive strength of “car manufacturers”. Advantage.
At the performance conference in March, Gan Jiayue made it clear that “Geely does not need to participate in the price war.” He believes, “Chinese brands have crawled out of the cracks in the market, and we have never lacked in price advantages. But we cannot Simply fight a price war. If you fight a low-value price war, the customers must be hurt. After the price war, the service will be worse, the product quality will be worse, the matching technology will be worse, and the customer experience will be worse. It’s bound to be worse.”
Geely, a private enterprise honed from the “dead pile” of China’s auto industry, is no stranger to price wars. In 2014, joint venture brands took the lead in launching a price war. The already passive Chinese independent brands were impacted by this, with sales declining and the overall downturn. Geely experienced a dark moment.
However, after 2014, Geely entered the era of 3.0 premium cars, launched Borui, Boyue and other products, and completed the upgrade and transformation, followed by the era of 4.0 structural cars, launched the China Star series, completed the brand upgrade and gorgeous transformation, and became a self-owned brand. The vanguard has entered a new round of product explosion.
Geely Automobile and Gan Jiayue, who have experienced several rounds of cycle baptism, obviously have their own understanding of how to achieve “value improvement and brand improvement”.
Gan Jiayue believes that technology and products are fundamental. Behind the new product debut of Geely Galaxy, Geely Group has mobilized the capabilities of the five major global styling centers. The new generation of styling design has been comprehensively improved, and the styling language is more energy-efficient, younger and more fashionable.
Geely has established an industry-leading self-research system for “three electrics”, and self-developed a new generation of manganese-based material batteries and solid-state batteries; in terms of battery recycling technology, the recovery rate of nickel, cobalt and manganese exceeds 99%, and the recovery rate of lithium More than 85%, leading the industry. Geely’s self-developed “nine-in-one” high-performance electric drive system will also be applied next year. Aegis battery safety system has researched battery safety to the extent of electromagnetic radiation.
Geely has also passed the “ten square grid” technical patent, and then added the cage body of the whole vehicle to form a safety protection, so that the battery cells are really not ignited.
In the direction of intelligence, people complained a lot about the car-machine interaction experience. Geely’s advantages have emerged rapidly since the acquisition of Meizu, and the speed of car-machine development is very fast. LYNK OS N and Galaxy N OS have the same technology. The LYNK OS N equipped with Lynk & Co 09 has been tested by more than 10,000 users, and its evaluation is higher than that of Hongmeng.
The second is on the chip. For example, the Lynk & Co 08 is equipped with two Geely self-developed “Dragon Eagle One” chips, both of which are 7 nanometers, which are equivalent to two Qualcomm Snapdragon 8155 chips.
Moreover, Geely has opened the “intelligent computing era of integration of heaven and earth”. From chips, operating systems, low-orbit satellites to intelligent computing centers, Geely plans to launch a total of 18 satellites in two orbits this year, and accelerate the implementation of the high-end intelligent driving solution of the world-ground integration version, making Geely truly a car that will never lose contact. The new generation of cockpit operating system and self-developed cockpit platforms such as E04, dual E04 and E05 will also be promoted soon.
Gan Jiayue mentioned as an example that Geely invested more than 1 billion yuan. After the establishment of the Star Wisdom Computing Center at the beginning of this year, it can greatly improve R&D efficiency, empower product innovation, and improve product experience. For example, through public cloud and The joint mode of the private cloud can simultaneously complete a real-time protection of the data of 3.6 million vehicles.
Gan Jiayue is also proud of Geely’s advantage in cost competitiveness. In terms of platform car manufacturing, Geely’s experience is calculated in ten years, including smart new energy architectures such as e-CMA and Haohan architecture, which will fully cover mainstream market segments, “intelligence + architecture”, “technical black box + white box “To achieve technology cost reduction, modular cost reduction, and large-scale cost reduction, product costs will form an absolute leading edge.
02.Galaxy is not just a new series, it is the beginning of a comprehensive transformation
“Quantity” and “price” have always been inseparable twins. In the second quarter, Geely Galaxy series will deliver the first product “Galaxy L7”, “attacking” the mainstream 150,000-300,000 yuan high-end new energy market. The mass-produced model “Galaxy E8” of the “Galaxy Light” concept car unveiled at the press conference will be delivered in the fourth quarter of this year.
Gan Jiayue said that the Geely Galaxy series “only makes high-value new energy vehicles”, and it is to “hit one punch to avoid a hundred punches.” There are bound to be surprises at the same price competitiveness. When communicating with more than 100 Galaxy dealer partners, he said: “The pricing of Geely Galaxy is determined by everyone, by the market, not by cost.”
It will not set prices based on cost, but let the market give a price that allows Geely itself and its dealers to grow together, so as to avoid falling into endless bloody competition, or even bloody competition. In this regard, Geely has already proved itself to dealers. The accumulative sales volume of the “China Star” series has exceeded 620,000 units, achieving a major breakthrough for China’s independent brands.
In March 2021, Gan Jiayue took over as the CEO of Geely Automobile Group and became the first person born in the 1980s at the helm of Geely Automobile. At this time, it is just in time for the market to shift from fuel vehicles to new energy vehicles. In addition, due to the epidemic situation, uncertainty and challenges in all aspects are huge.
Gan Jiayue said that auspicious people have a characteristic. They don’t know how to do things that are not difficult. They must overcome difficulties and do difficult and correct things.
For more than two years, Gan Jiayue has led the launch of a series of star products such as China Star and Geely Galaxy, promoted the establishment of Star Wisdom Computing Center, reshaped Geely’s research and development system from the aspects of digitization and intelligence, and based on the sales channel system The characteristics of new energy vehicles, boldly implement changes.
History has proved time and time again that the most difficult thing is not to start from scratch, but to turn the ship around, reform and self-revolution.
Change has never been limited to the final product delivered to users, but to promote organizational change from the first button and the first screw. From a vertical perspective, the new Geely Group organization fully empowers, moves forward in decision-making, and responds quickly to customer needs.
Gan Jiayue said: “Build brand centers in first- and second-tier cities, and implement an agency system in third-, fourth-, and fifth-tier cities. Adapt to different regions to better serve customers. You can’t invest heavily in assets, but at the same time, you must let customers Appeals are quickly responded to and resolved.”
“Fuel vehicles and new energy vehicles are untied. Jixing Business Department is responsible for fuel vehicles. The goal is to maximize the market share of existing fuel vehicles. It is not good to do both new energy vehicles and fuel vehicles. The channels are also relatively independent. Yes, Geometry and Galaxy are the new energy series under the Geely brand. Geometry has now been incorporated into the Geely system and will occupy a place in the popular pure electric market; Galaxy is a separate business unit. Therefore, Geely now sells the company’s brand There are three divisions.”
In terms of direct sales, it is necessary to build supermarkets, image stores, and experience stores one by one.
As the backstage of combat command, the business department is the “joint command department”. Geely’s global design, product definition, quality control, and intelligent capabilities are the middle ground. It must be able to provide cross-support for its various product lines and provide a steady stream of shells for the front line. As the front line, the channel needs to be adjusted in a coordinated manner, forming a joint operation mode of the front, middle, and backstage as a whole, allowing those who hear the artillery fire to command the battle.
The ideas of Geely and Gan Jiayue are undoubtedly ahead of the entire auto industry. Internet companies set off a China-Taiwan revolution around 2017, and Alibaba, Tencent, and ByteDance all entered the game. It is in the second half of the mobile Internet, when the certainty gradually exceeds the uncertainty, it is necessary to replace the continuous trial and error and model innovation in the first half of the mobile Internet with agile response, focused strategy and efficient execution.
03.“Our advantages are similar to those of Tesla”
Tesla, the absolute pioneer in the new energy industry, has two major advantages. One is a strategic forward-looking perspective. It has long made it its mission to promote the world’s transition to electric energy, and has never been shaken by short-term market fluctuations. The other is the choice of route. Through the integration of automobiles, we will conduct in-depth management of the supply chain, form a system, and formulate standards. While the performance is leading, the cost control is also more competitive. The road Tesla is taking is dangerous, but it has falsified a large number of intermediate routes or transitional forms in the first half of the new energy industry. So in the second half, all car companies have no secrets at all. The overall battle of cost, performance and service is already an “open-book exam”.
Gan Jiayue emphasized that Geely has accumulated 26 years of car manufacturing, and has never slept on the achievements of the past.
In 2021, Geely re-formulated the “Two Blue Geely Action Plans”: one focuses on intelligent high-end pure electric vehicles, and the other focuses on intelligent energy-saving and new energy vehicles. Gan Jiayue said that the two blue action plans actually have one thing in common, that is, they have deployed intelligence. In the future of new energy vehicles, whether they are hybrid or pure electric vehicles, intelligence must be the most important.
He said that after the launch of the two blue action plans, Geely will establish a new energy system on the new energy track. Galaxy plus geometry represents the entire new energy of Geely Automobile.
To sum up, Jikrypton is high-end luxury, with products above 300,000 yuan; Lynk & Co is mid-to-high-end, with products priced at 200,000 to 300,000 yuan; Geely focuses on the market of less than 200,000 yuan and around 200,000 yuan-geometry and Galaxy are Geely brands Its new energy series, Geometry focuses on new energy products within 150,000 yuan, mainly entry-level and cost-effective new energy products; Galaxy focuses on mid-to-high-end new energy series, focusing on high-value new energy vehicles. Comprehensive coverage of market demand in different price segments.
So far, Geely Automobile Group has formed a brand layout of Geely (Geometry-Galaxy)-Lynk & Co-Ji Krypton from low to high, especially the launch of the Galaxy series, which not only completes the puzzle of Geely’s high-end new energy products, but also makes up for it. It overcomes the shortcomings in the hybrid field.
The enrichment of product lines and the diversification of brands may be achieved by aligning, benchmarking and imitating industry leaders. However, the ecological accumulation in platform building, frame building, supply chain and intelligence cannot be caught up overnight.
From the technical system point of view, Geely must not only insist on independent controllable core supply components, such as engines, transmissions, motors, electronic controls, etc., but also form an iron triangle of SQE, R&D, and procurement, and systematize all supply chains. Integrate, assist and improve, and build a community of shared future.
At the same time, Geely may go deeper, and some will go deep into second-tier and third-tier suppliers. Only with such depth can the advantages of scale be brought into full play. In the past few years, Geely has also laid out a lot in the ecological circle, and has done some systematic integration in intelligent driving, intelligent cockpit, interactive interface, and electronic and electrical architecture.
As Gan Jiayue previously stated at the results conference, the well-developed private economy in Jiangsu and Zhejiang ensures the strength of Geely’s cost supply chain system. At the same time, Geely Automobile’s own core products, including power bearings, motors, electric controls, batteries, etc., have been mass-produced one after another. Through supply chain integration to control costs, Geely has obtained the core advantages of industrial chain integration.
So Gan Jiayue said, “Our advantages are similar to those of Tesla.”
In addition to its advantages in the supply chain, Gan Jiayue believes that Geely also has a leading edge in terms of safety and experience. The future of the automobile industry will still be a division of labor model. Professionals will do professional things, let the social division of labor participate together, and let the law of marketization carry out the survival of the fittest. Not all things are done by themselves, and this logic will not change.
He said, “For example, in the era of battery shortage last year, everyone was constrained by the surge in raw materials and the entire production capacity. At this time, it is advantageous to do it yourself. But returning to the original state of the market does not have to be done by yourself. At this time, it can be solved through the market. The problem is that doing it yourself is a burden.”
Gan Jiayue has always emphasized the use of long-termism to think about current problems, maintain strategic focus, and not go to the doctor in a hurry.
Summary
Culture is the underlying support of everything
Too many people are amazed by the external explosions and model innovations, and the fact that companies want to go further is their grasp of laws and human nature.
Gan Jiayue emphasized that to do anything, you must first understand the logic. After clarifying the logic, you must determine the rules of doing things, which are the direction, method, order, and system of selecting, employing, and distributing money. The final implementation of the rules still depends on culture. .
Talking about Geely’s culture, Gan Jiayue mentioned Geely’s acquisition of Volvo more than 13 years ago. In fact, most of the cross-border mergers and acquisitions ended in failure. Why was Geely able to “snake the elephant” to acquire Volvo, and win several wins from Sweden and China, Geely and Volvo? Gan Jiayue said that this is determined by Geely’s open and inclusive culture.
“Whether it’s Volvo, Lotus, or Proton, everyone has come to a very clear realization that the purpose is to participate in global auto competition, not just in a certain region. To participate in global auto industry competition is to An inclusive culture is needed, so Geely’s culture is called successful people, respectful people and happy people. It is a fundamental point for Geely to go out, go up, and go further .”
Therefore, the open and inclusive culture advocated by Li Shufu and Geely is also the key reason why Geely signed a strategic cooperation framework agreement with Changan this week and carried out all-round strategic cooperation.
At present, Chinese car companies are accelerating globalization, and Geely, Lynk & Co, and Jikrypton have launched a new round of overseas strategies. On the road of globalization, Geely obviously has its own unique genes and systems.
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