Pdd holdings has once again stirred up the auto industry.

On June 28th, LINGPAI entered the mid-to-large SUV market with its flagship C16. This six-seat SUV comes equipped with smart driving, a cabin with an 8295 chip, a color TV, a large sofa, and an 800V fast charge. The entry-level extended-range version is only priced at 155,900 yuan, and the pure electric Top version is priced at no more than 185,800 yuan.

Note that similar positioning models such as WENJIE M7 and LI XING L8 start at nearly 250,000 yuan, and the former “magic car” Toyota Highlander is priced as high as 300,000 yuan.

It is clear that LINGPAI wants to firmly defend its reputation as a "price butcher" and follow the route of affordable luxury cars.

After the C16 was released, many consumers called it the "half-price Lixiang L8", which Zhu Jiangming was very pleased with. In a post-event interview with The Wall Street Journal, he said, "Some users who usually buy Chanel may occasionally buy Uniqlo, and they may also buy the C16. After using it, they feel no difference, and then they become loyal fans of LINGPAI."

Zhu Jiangming even learned from Zhou Hongyi and took the lead in auctioning off his three deluxe cars, the Mercedes S-Class, the Porsche Cayenne, and the Toyota Alpha, and replacing them with a C16 as his daily car.

Now, LINGPAI, which focuses on the 100,000 to 150,000 yuan range, has taken the lead among the second-tier new forces. It has achieved 86,700 units sold in the first six months, and in June, it broke the 20,000 monthly sales mark for the first time.

In Zhu Jiangming's view, LINGPAI was able to emerge victorious in the fiercely competitive market thanks to its focus on a specific niche.

He pointed out to The Wall Street Journal that the current industry structure is not yet set in stone, and everyone is striving to grab their own market share, so the battle lines cannot be too long. LINGPAI was initially technology-oriented, with 60% of its own research and development plus large-scale reuse of parts, which saved costs and allowed for greater pricing flexibility.

This means that LINGPAI not only created the "half-price Lixiang", but also began to learn the essence of the Lixiang product matrix - "nested dolls".

Under Zhu Jiangming's plan, while LINGPAI seeks to expand its channels in the lower-tier markets, it will also rely on the STRATENIECE tree to break down barriers and expand overseas quickly. Zhu Jiangming said this is the only way to become a top global automaker with annual sales of 3 million units.

LINGPAI has big ambitions. Even Zhou Hongyi, who invested in the film Ne Zha, regretted missing out on LINGPAI in the past.

However, before becoming the next industry giant, Zhu Jiangming and his LINGPAI still have many obstacles to overcome. Achieving the annual sales target of 250,000 units this year is not easy as sub-brands from Xiaopeng and NIO are already hitting the market and the 150,000 to 200,000 yuan market is already showing signs of turbulence.

Nevertheless, Zhu Jiangming said, "No matter how tempting the profits are, LINGPAI will always treat cars as consumer goods." The order volume of 5,208 units in the first 48 hours after the C16 launch gave him a lot of confidence. He believes that with internal and external efforts, LINGPAI may undergo a leap forward in the second half of the year.

The following is a record of interviews with LINGPAI Chairman Zhu Jiangming and Senior Vice President Cao Li (edited):

Q: Is LINGPAI worried that some new consumers might describe LINGPAI as a "Lixiang replacement"?

Cao Li: I think it's a good thing if people think like that. Replacing Lixiang is not a bad thing.

The positioning of Lixiang models is at least in the 350,000 to 450,000 yuan price range, while ours is below 200,000 yuan. But that doesn't mean that we can accept making all our functions and performance worse than theirs for a lower price. So we must definitely benchmark the industry's best functional experience and product quality.

For example, we use a manually opened auxiliary screen, while theirs is electric and may have a better ceremonial feel, but it is twice as expensive to produce and not worth it. LINGPAI products must certainly approach excellent products in terms of performance and product power, but they differ in price and ideology. Being able to replace similar products is definitely a good thing for LINGPAI.

Zhu Jiangming: To give an example, some people who usually buy Chanel may occasionally buy Uniqlo and may also buy the C16. But after using it, they feel no difference, and then they become loyal fans of LINGPAI.

Q: Leapmotor said it wants to be the Uniqlo of the car industry. How does it achieve the price-performance ratio?

Zhu Jiangming: First, we have 60% of the cost of the self-developed and self-made parts, which can save some cost space for users. If parts have a gross profit of 10%, the entire vehicle has a cost space of 6%.

Second, from the direction of product platform, Leapmotor strives for the maximum number of parts purchased for each part. The current C series, the later B series, except for non-universal parts such as shape, shell, and body, share 88% of their parts. The front and rear lights, instrument panel, front seats, and chassis parts of the C16 and C10 are completely the same, which is the platform part.

In terms of innovation, we used an 8295 chip to make L2-level intelligent driving, 360-degree panoramic view, automatic parking, and audio tuning, etc., only Leapmotor can maximize the efficiency of a chip. Our battery pack has no top cover, and uses all-steel structure, but can achieve lighter weight and stronger structure than others' all-aluminum structure battery pack, which greatly improves the comfort of the cabin.

Third, Leapmotor's products are priced at cost, using our innovative technology, more than 60% of self-made parts, and the space saved to benefit users. At the same time, we use many suppliers who are the same as BBA, such as door panels, interiors, and instrument panels.

I am a technology-based manager who graduated as an engineer. I want to use technological advantages to make products, so we have always said that we want to be the Uniqlo of the car industry, and we will always adhere to this concept in the future.

Q: Leapmotor has a great advantage in component commonality, but how to avoid internal competition between models?

Zhu Jiangming: Leapmotor has indeed done a very good job in this regard. From April to June, after the C10 was launched, sales climbed from 4,000 to 6,000, indicating that the C10 has sufficient vitality. User research data also reflects that the satisfaction of users who purchased the C10 is very high. Whether they are original low-end car users or BBA users, they all think that they get great value for the price, which can make our sales rise all the way.

At the same time, the C11 also achieved very good results, and it is slightly ahead of the C10. Therefore, 1+1 is at least greater than 1.5. Old products also have sufficient reputation and trust, and new products can also achieve sales growth.

Q: Why does Leapmotor achieve good results in such a fiercely competitive market?

Zhu Jiangming: I think everyone is more inclined to rational consumption, so from the perspective of the future, using cars as transportation tools may be more advantageous for this industry. For example, racing cars, costing three to four million yuan per car, are composed of steel, rubber, leather and other materials. Moreover, they cannot be used more and weight must be controlled, and the cost is not high.

Therefore, no matter how tempting or high the gross profit is, Leapmotor will always insist on making cars as a consumer product. For Leapmotor, from January to May of this year, the sales volume still ranked among the top three in the new car-making forces. With the help of the C16, the ranking may move forward, and the second half of the year should have better performance.

Q: Leapmotor has released three SUVs in the price range of 150,000 to 200,000 yuan. Why is it so favored in this price range, and what are the expectations for the next step?

Zhu Jiangming: We hope that the C series can penetrate this 150,000 yuan price range, occupy a larger market share, and strive to achieve monthly sales of 30,000 within this price range. Next year, 3 B-series cars facing the 100,000 to 150,000 yuan range will be launched. Before 2026, we will focus on promoting three products priced around 200,000 yuan.

To focus on customers in a certain price range, focus on products and configuration parts in this price range. Otherwise, if you do high-end and low-end at the same time, the users and products will be different, and the front line will be very long, and the competitiveness will be difficult.

Now everyone is really busy because it is an uncertain stage. Everyone definitely wants to use their abilities to strive for their own status and share, and Leapmotor will still have a chance as long as we remain steady.

Q: It is said at the press conference that you want to auction luxury cars. Do you have such preparations?

Zhu Jiangming: I do want to use the C16 as my future commuting car, whether I drive it myself or let the driver drive it, it's good enough.

One of my Mercedes S has been more than ten years old, but it is still very new because I didn't use it much. When I bought it for the first time, I had at least ten years of driving experience, but I was very nervous when I drove the Mercedes S, because it was too expensive and too big, and it was uncomfortable to drive a big car. So bigger is not necessarily better, it still depends on the need.

There is also a Porsche Cayenne, which I bought for 1.9 million yuan and is also more than a dozen years old. Also, there is an Alpha, which is about six or seven years old. I want to choose a suitable time to auction off these three cars and use this car to commute until the next Leapmotor D-series 6-seater comes out.

Is the launch of the C16 model at this point a bullish sign for the future growth of the segmented market, given that it seems that only the WJJun M7 and the Ideal L8 among the current 6 mid-to-large-sized SUVs on the market?

Because the legendary car for everyone's 6-seater car is the Toyota Highlander, which had to be purchased at a premium at that time. I also bought one in 2011, hoping to go on trips and eat with my family without having to take a taxi, and one car could fit everyone. There is indeed a great rigid demand, and under the situation of the two-child policy, the market size must be getting bigger and bigger.

The advantage of the LingPao C16 is that it is easy to handle and has very good seating space. It is suitable for both business and home use, and is a very comprehensive car. In the past, I spent a lot of time sitting in the GL8. Everyone knows that the GL8 is a legendary car, but I think the seating experience in the second row of the LingPao C16 should surpass that of the previous GL8.

Because after the launch of the C16, the product layout is more complete, how will we continue to strengthen our efforts in channel construction in the second half of the year?

Our main task for the channel this year is to adjust the structure, with the direction being "1+N". More automobile cities that go to cities will serve as "1", with 4S stores as display, sales, delivery, and service outlets. Develop a circle of "N" around it, which is some small automobile commercial circles or hypermarkets.

We hope to reduce our investors, that is, the operation entities, and increase more models like automobile cities or automobile commercial circles. We hope to develop more than 300 automotive cities by the end of this year.

We hope that the total number of outlets will increase from the current approximate 500 to 800 by the end of the year, and we will also increase the intensity of sinking outlets, hoping to develop cities that do not yet have outlets and cities in the fourth or fifth tier with a certain sales scale at the fastest speed. The penetration rate has reached 52%, and we also want to speed up progress.

Our R&D expenses in the first quarter were over 500 million, and the expenses for companies like Weilai were higher. How can we ensure our technological competitiveness or leadership advantage?

If you look at the financial report, not only Q1, the total amount of R&D investment in the past years is very low compared to several peers, and more is the use of our original basic accumulation, including our organizational ability and basic technical ability.

Because when we were founded in 2015, the founding team had a good foundation in software, technology, and R&D management, which saved us a lot of time and resources and avoided detours. In nine years, we have completed many technological reserves and accumulations. So in terms of output efficiency alone, LingPao's R&D efficiency must be the highest.

What will be the impact of LingPao's future layout in the European market on our domestic performance, and what kind of driving effect will it have on the domestic market?

Currently, profits in Europe are better than those in China, but in the long run, it will become more and more difficult. Many car companies in Europe have started to roll up, whether it is in terms of price, technology, or products.

After expanding into Europe, especially after cooperating with Stellantis, if LingPao International's sales volume can slowly reach our expectations, it will definitely have a positive impact on our brand.

There has been news recently that LingPao has started trial production in Europe. What kind of mode will LingPao choose if it enters European production in the future?

Currently, the export of Chinese complete vehicles is a very sensitive period, but LingPao has certain advantages. After cooperating with Stellantis, its global manufacturing resources can be evaluated and utilized. As for overseas production, we are currently evaluating its feasibility, policies, and economics. LingPao International is currently mainly planned for sales.

Many Chinese car companies are accelerating their pace of building factories overseas. How do you view the future development space of overseas factories and LingPao's current model?

As a car company, it must eventually be globalized to be able to stand firm. The top ten car companies in the world are basically those with annual sales of more than 3 million units, of which at least 50% of the market is overseas, making it easier to achieve sales of more than 3 million units.

Our cooperation with Stellantis is mainly aimed at accelerating our pace of entering overseas markets, whether it is the construction of outlets, service systems, or geopolitical factors affecting tariff trade barriers. We also hope to use this cooperation to enter overseas markets faster than other domestic car companies within the next three years.

Has the trend of price wars bottomed out?

The entire new energy process will be completed in three years. After three years, gasoline cars will shrink to within 10%, and more will be hybrid, plug-in hybrid or all electric. LingPao still follows its own stable path, hoping that every product released in the future will have sufficient competitiveness like the C16.

What is the global strategy for integrating smart driving into the zero-run internal? How much stimulation does smart driving have on sales in the price range of less than 200,000 yuan?

Zhu Jiangming: In terms of smart driving, Zero Run adopted a more follow-up strategy in the previous stage. Even the performance of first-tier smart driving products is not very satisfactory now, and it is only assisted driving, which makes it difficult to open a big gap.

In the next 3-5 years, I think smart driving will become more and more mature. Therefore, we have invested more manpower in the entire intelligent driving field since last year. Currently, more than 400 people are on the team. The Static BEV can be put into production in July, and the Dynamic BEV will also be put into production in October or November. The overall technical capabilities have gradually approached the first tier.

In the next one or two years, everyone can see that Zero Run's products in the field of smart driving should be advancing faster and faster. Our 100-150 thousand B-series car next year may be equipped with lidar and high-performance smart driving chips even in the high-end version. We think that smart driving will definitely be a big trend in the future, and even 100,000-level cars must be equipped with it. At the October 2021 Paris Auto Show, the first car of the B series (SUV) will be exhibited.