Weimaraner, a “dangerous” horse?

Total Issue 1403

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Editor-in-Chief | Ma Liming

Editor in charge | Zhang Yu

Editor | Zhang Yu

In recent days, WM Motor has frequently appeared in people’s sight, but it seems that it is not a good thing.

According to media reports, internal executives of WM Motor took the initiative to reduce their salaries by 50%. Since October, the company has paid 70% of the salaries of grassroots employees. In addition, there are suspected insiders who said on Zhihu that Weimar had said that some expected salaries would be converted into year-end bonuses.

In response to the above related reports, as of press time, WM Motor has not responded.

However, not long ago, WM Motor was also revealed that the founder Shen Hui’s annual salary was 1.2 billion, and the news directly rushed to the hot search. On the one hand, the founder’s astronomical annual salary, on the other hand, is the employee’s salary reduction. This contrast is too great.


“Salary” heavy WM Motor

In fact, this is not the first time WM Motor has been exposed to salary issues.

As early as March 2020, a user on the social platform said that the company held an online conference call to discuss the issue of year-end bonuses with employees. The company’s HR notified all employees to cancel the year-end bonuses, and the 13th salary was also extended to June. In response to the reason for the cancellation of the year-end bonus, the company’s HR explained that “last year’s KPI did not meet the standard.”

At that time, a suspected internal employee of WM Motor said, “We knew that the money would be deducted, but we didn’t expect it to be gone.”

The successive salary issues also reflect from the side that WM Motor may be facing more serious financial problems, and salary reduction may be one of WM Motor’s means of reducing costs to survive the cold winter.

Judging from its financial performance, in 2019-2021, WM Motor’s three-year total revenue reached 9.177 billion yuan. Deducting dealer rebates, etc., the company’s actual revenue totaled 10.917 billion yuan in three years. However, the net loss rates of WM Motor in the same period were 235.2%, 190.3% and 173.0% respectively. The adjusted net loss ratios of WM Motor were 229.5%, 158.1% and 113.1% respectively; the three-year gross profit margins were -58.3% and – 43.5% and -41.1%, the losses in the same period reached 4.145 billion yuan, 5.084 billion yuan and 8.206 billion yuan respectively, and the three-year loss reached 17.4 billion yuan; in the same period, the net loss of WM Motor’s return to its mother totaled 17.435 billion yuan in three years. The adjusted net loss for three years totaled 13.632 billion yuan. This means that WM is not profitable at all.

Of course, the lack of profitability is currently the experience of most new car-making forces, even “Wei Xiaoli”.

In the first half of this year, five electric vehicle companies including Ideal, Weilai, and Xiaopeng had a revenue of 70.89 billion yuan and a huge loss of 13.77 billion yuan. And from the perspective of losses, the losses of Ideal, Weilai, and Xiaopeng are still increasing.

Although they are all at a loss at this stage, in terms of sales, Weimar is far less than “Wei Xiaoli”. In terms of sales performance, during the period from 2019 to 2021, Weimar’s annual sales were 12,799, 21,937 and 44,152 respectively, showing a doubling trend year by year. But in 2022, sales have plummeted, and the cumulative sales in the first nine months of this year are only 29,043.

In comparison, from January to September this year, NIO delivered 82,434 vehicles, Xpeng Motors delivered 98,553 vehicles, and Li Auto delivered 86,927 vehicles. The poor sales also made Weimar sadly leave the market in the sales competition at the beginning of each month.

At the beginning of this year, the horse-drawn cart market also conducted an on-site visit to WM Motor, and found that WM Motor currently has few 4S stores in Chengdu. Individual dealer stores and supermarket showrooms have moved out, and there are few directly-operated stores. The salesperson of one of the stores also told Marathon City that the store mainly sells online car-hailing cars, and the people who come to buy cars are basically online car-hailing customers. It can be seen from this that we don’t know how much of WM Motor’s sales come from the B-end market, but at least it can be concluded that such sales results are too heavy.

Long-term losses, coupled with poor sales, may be the trigger for WM Motor’s salary problems. It is not difficult to see that WM Motor has reached a harbinger of life and death.


Quality problems occur frequently, and new cars are difficult to produce

Currently, there are 3 models on the official website of WM Motor, namely EX5-Z, E5 and W6. Among them, the price range of Weimar EX5 is 160,800-179,800 yuan, mainly targeting the low-end market below 200,000 yuan. However, in the domestic market, there are too many cars in the price range of 100,000 to 200,000. Fuel vehicles and electric vehicles share a “cake”. The market competition is very fierce. It is difficult for EX5 to achieve excellent results in this price range. Weimar was obviously aware of this problem, and soon launched the Weimar EX6 with a price of nearly 300,000 yuan, but this model has not been recognized by consumers.

In terms of new car layout, Weimar fell into a silent product layout period. The Weimar M7, which was originally planned to be launched in 2022, has disappeared completely, and it is still unknown whether it will be launched within the year.

In contrast, traditional car companies and new car manufacturers have accelerated the pace of new car layout. A series of products such as Nezha S, Leapmotor C11, Dark Blue SL03, Ideal L9, Xiaopeng G9 and other products intensively attack the medium and large SUV and B-segment sedan market.

It is foreseeable that, relying solely on the existing car series, Weimar has no chance of winning.

In addition to the slow layout of new cars, WM Motor has frequent product quality problems. Weimar has suffered many fire accidents and was even criticized by CCTV. However, Weimar officials never responded positively to the incident. Instead, in order to cover up the safety defect of the spontaneous combustion of the battery, the battery was locked without permission, which caused collective complaints from consumers. .

Product quality problems have made the already weak product power even worse, and the brand image has been seriously damaged.


The bumpy road to an IPO

Nowadays, IPO is the dream of almost every new car maker. In September of this year, Leapmotor successfully grabbed the fourth ticket for the IPO of the new car-making force. And WM Motor was not idle, and submitted a prospectus to the Hong Kong Stock Exchange in June this year. At that time, industry insiders predicted that if all went well, WM Motor would be listed for trading in the third quarter, but at present, WM Motor’s listing process has lagged significantly behind Leap Motor.

In fact, WM Motor’s IPO road is full of ups and downs. In the early stage, WM Motor had already encountered the suspension of its listing plan on the Science and Technology Innovation Board. Today, it is more difficult than ever to go public in Hong Kong. After all, the capital market is not as enthusiastic about the new car-making forces as it used to be. To be precise, it is more rational. Leap Motor has just completed its listing in Hong Kong. The stock price plummeted 33.54% on the opening day. Now the stock price has dropped from HK$48 to the current HK$18, which is surprising.

At present, due to the quiet period before listing in Hong Kong, WM Motor has not responded to relevant financial reports from the outside world, but there are many actions in the investment field.

In the fourth quarter of 2021, WM Motor held a 28.51% stake in Apollo Smart Mobility Group (AFMG) through a series of share swap arrangements, becoming the company’s largest shareholder. Shen Hui, founder of WM Motor, became the co-chairman and non-executive director of AFMG.

In August this year, AFMG held a global strategy conference in Shanghai and announced its official entry into the luxury electric vehicle market. The first model of AFMG’s luxury pure electric business segment is an electric sports car Roadster, which is planned to be unveiled at the Guangzhou Auto Show in November 2022 and officially launched in early 2024. This move is also regarded by the outside world as an important layout for WM Motor to move towards the high-end market.

In general, it is not known whether WM Motor will be successfully listed. But even if it is lucky to be listed as scheduled this year, I am afraid the results will not be satisfactory.

Ma said:

As an old-fashioned new force in car manufacturing that once stood shoulder to shoulder with “Wei Xiaoli”, Weimar has obviously fallen behind in terms of brand, product, sales and financial performance. Perhaps salary reduction, IPO, and high-end market layout can slow down the decline of Weimar and survive the cold winter, but before the cold winter, the capital market has returned to rationality for the new energy vehicle industry. Whether Weimaraner will become a “dangerous” horse, I believe time will give the answer.