At the end of March, CEOs of car companies such as Li Xiang, Li Bin, He Xiaopeng, and Wei Jianjun received invitations from Xiaomi CEO Lei Jun to attend the Xiaomi SU7 press conference. After the two-hour press conference, other car company CEOs left, except for Li Xiang who did not leave.
Li Xiang, along with executives such as Lei Jun, Li Wanqiang (one of the core founders of Xiaomi), Wang Chuan (co-founder of Xiaomi Group), and Lin Shiwei (CFO of Xiaomi Group), listened to the internal review of the SU7 press conference at Xiaomi. He heard the meeting end all the way and left almost 1 o'clock in the morning.
The next day, Li Xiang issued an order to the Ideal Strategy Department to study Xiaomi and start learning Xiaomi's marketing and channel strategies internally.
Li Xiang believes that the most successful aspect of Xiaomi's press conference is its ability to effectively convey the value of the product, clearly explaining how much value each configuration of the product can bring to users. For example, for electric sunshades, Xiaomi will say that the sunshade of SU7 is in 38&amp# 8451; After being exposed to direct sunlight for 1.5 hours, the temperature inside the car is 12 degrees lower than that of the Tesla Model 3# 8451;； For example, in terms of range, Xiaomi does not directly state the range parameters, but rather states that 'this car can be driven for more than a week'.
In 20 days, the ideal sales force of the year - L6- will be launched. Li Xiang hopes to apply the experience learned from Xiaomi's press conference to the Ideal L6.
Before and after the launch of SU7, Ideal was in a low period after the release of MEGA and the new L series. MEGA failed to replicate Ideal's success in the pure electric field, and the external public opinion storm dealt a heavy blow to Ideal.
The MEGA controversy not only disrupted this year's sales pace, but also disrupted the overall pace of the company. According to the ideal 2021 plan, the ideal sales volume should achieve 100% growth within 4 years.
During that period, Li Xiang, who had been active on social media all along, almost "disappeared" and the company's stock price fell nearly 40% from its pre MEGA release high. Previously, within less than half a month of releasing new models, the product lineup was changed and the weekly sales ranking was cancelled. Later, Li Xiang released an internal letter to publicly reflect on the excessive desire for sales over the past year and the lack of focus on user value. Internal morale has reached freezing point.
At that time, the entire company had to come up with various strategies to respond to user feedback, while also facing external public opinion and a tense state of mind. Li Xinyang, the president of the third product line of Ideal Automobile, recalled that at that time, whenever there was a slight "disturbance" on social media, he would be "like facing a big enemy and trembling".
This year was originally an ideal product year, with 8 products launched simultaneously, and L6 was just one of them. After the MEGA scandal, the remaining three pure electric cars were postponed to next year's launch, and L6 became the last new car released this year.
The success of its release directly affects the success or failure of Ideal this year.
On this car, Ideal has broken many habitual perceptions, "Li Xinyang summarized to 21 Motors.
Unlike the external perception, L6 is not a simple "nesting doll" or subtraction based on the other three cars in the L series, but an ideal car that has been rethought and redesigned. Compared to L7, 8, and 9, L6 has higher differentiation, which means that L6 uses many different components.
On this car, not only is the product development new, but the market operation is also new.
Not a day has passed since I thought this car would be sold lying down, "said Li Xinyang. At that time, the product line led the establishment of a listing project team, and many departments such as brand, retail, after-sales, business analysis, and product sent backbone personnel to hold daily meetings to review data, analyze, review, and revise strategies, seven days a week, without interruption. It wasn't until L6 sold 50000 units that the meeting was changed to a "bi daily meeting".
Customers who come into the store to buy a car, whether they buy the Wenjie M7 or Wenjie M5, will compare it with the L6, which is an unavoidable car A salesperson from Wanjie told 21 Automotive.
According to the official announcement of Ideal Auto, the cumulative sales of L6 in the past 7 months have approached 150000 units. Among the current monthly sales of over 50000 Ideal units, L6 sales account for nearly half. The L6 is also the model with the highest penetration rate among ideal internal employees.
L6 allowed Ideal to break the curse and breathe a sigh of relief from the low point, but Ideal still cannot slack off.
Brain replenishing black spots
With only 15 days left until the listing of L6, Li Xiang convened a meeting with relevant middle and senior management at the last minute.
The brand office located on the 5th floor of Ideal Auto headquarters is decorated like a living room, with Li Xiang and Liu Jie (then Vice President of Business) sitting on the only double sofa in the middle of the room, while Jie Weiguo (Vice President of Brand) sits next to the coffee table. Li Xinyang, who was then the president of the third product line, also participated. As he had no space, he moved a folding chair and sat next to it as soon as he entered the office, listening with a learning attitude. Because prior to this, Li Xinyang had been more involved in product development work, and going public for trading was his first time.
Later, Li wanted to call him to "sit in the middle". According to Li Xinyang's recollection, the meeting was squeezed between Li Xiang and Liu Jie for more than 2 hours, and the core topic of discussion was: should we talk about L6 according to the original platform based approach, or start over from scratch? How should we tell the story of L6 to directly target consumers?
If we follow the idea of platformization, the L6 launch event will remain unchanged - first introduce the platform, and then share the ideal highest standard intelligent driving and intelligent space platform with L7, 8, and 9, except that L6 is slightly smaller in size and easier to drive compared to other cars.
But this approach, Li Xiang believes, is "too straight", "users cannot understand", and "simply cannot stimulate users' purchasing desire".
Li Xiang is more in favor of starting over from scratch. He believes that many potential users of L6 do not have a deep understanding of the ideal brand and products, and need to think from their perspective - which product points of L6 are truly important to them and what value can be created for them, so the press conference needs to adopt a "new form".
But at this point, there were only half a month left until the L6 press conference, and the originally scheduled venue had already been selected and the deposit had been paid. Li wanted to start over, which meant everything had restarted.
Starting from scratch, when discussing content that users can understand, we need to return to what users care about when buying a car - what information does a user with a budget of 250000 yuan most want to know from the press conference?
According to the user's decision-making process for purchasing a car, Li Xiang, Liu Jie, Li Xinyang, and others have summarized a set of L6 launch strategies - positioning, value, and attack and defense.
Firstly, inform the user of the size and level of the car, and position the product accordingly.
Many people think that the size of L6 is very similar to Xiaopeng G9 and BMW X3, but in fact it is not. Although the price difference is huge, the size of L6 is the same as Porsche Cayenne and Volkswagen Touareg, "an ideal employee told 21 Automotive.
Even though the positioning is aimed at million dollar luxury cars, there is still controversy within Ideal. Some voices believe that the Porsche Cayenne was launched 22 years ago, and even with continuous updates, it does not have particularly outstanding competitiveness compared to other domestic brands. For example, the Cayenne only has basic assisted driving (adaptive cruise control, lane keeping, etc.), and there is a big gap in intelligence compared to other domestic brands. In the fiercely competitive domestic market for intelligent driving, the Cayenne does not have a benchmark role.
But the core members believe that there is no more suitable reference model for the L6 launch event than the Cayenne, and the reason given is that before stating the specific product strength, users need to be informed of what level this car is in. The so-called level refers to various information including size, wheelbase, drive form (two wheel drive/four-wheel drive), suspension structure, NVH level, core configuration, etc. But the communication effect of scattered configuration is poor, and everyone thinks the simplest way is to find a well-known car model as a reference.
The Cayenne and L6 are not only similar in size and driving form, but also have similar power levels, both belonging to luxury mid to large size SUVs. Comparing with the Cayenne, the user's understanding cost is the lowest, "said Li Xinyang.
Secondly, find value, that is, what are the key advantages and selling points of L6 compared to cars of the same level, and what tangible value can these product strengths bring to users, making the value of the product manifest.
In terms of configuration explanation, there are internal differences regarding whether it is standard or packaged as equity. At that time, there were many internal suggestions that L6 could follow the industry's usual practice of packaging optional products as rights and "pretending to be gifts", such as Nappa leather seats, seat heating massage, etc.
But Li Xiang insists that whether it is standard equipment or packaging standard equipment as rights to give to users, "the products received by users are the same". The question should be about how to better convey the value of the product to users, rather than whether the standard strategy is correct. What we should convey to users is why we need to provide standard configuration and what value the standard configuration can bring to users
Thirdly, learn Xiaomi's "attack and defense essence".
Li Xiang believes that the best aspect of Xiaomi's press conference was the emphasis on "offense and defense".
'Attack' refers to the act of attacking, with emphasis on the configuration of having no one else. Pure electric cars in the price range of 200000 to 300000 yuan generally have a lower range (500-550 kilometers), but the Xiaomi SU7 can achieve a range of over 700 kilometers. Li Xiang believes that this is the most important selling point that Xiaomi has extracted from the SU7.
For the Ideal L6, the standard features of four-wheel drive, large space, extended range system, and intelligent experience are the advantages of L6 compared to other models in the 250000 yuan price range. These are the points that need to be "attacked" at the press conference.
'Defense' refers to 'defense', preparing in advance for points that users may have concerns about or points that are easily challenged by the outside world, actively communicating with users, rather than avoiding them.
Defense is a big step forward at this Ideal L6 press conference.
Li Xinyang told 21 Motors that during that meeting, they started a "brainstorming storm": if today I were someone who wanted to hack L6, where would I start?
They envisioned two key points:
One is lithium iron phosphate batteries, which are often perceived as cheap and have low energy density. Although they are stable, their low-temperature performance is poor;
The second is the "disappearing A-pillar". At the end of 2023, Ideal was embroiled in a wave of A-pillar and B-pillar fractures, and people were worried that similar doubts would arise after the release of L6.
At that time, Ideal was still in a low period of public opinion, and there were internal discussions about whether to face these criticisms and doubts directly or just focus on the advantages of the product itself when it did not exist.
We have made a very important choice. Since we believe that everyone will be criticized and these points are not a problem, we will openly and honestly speak them out to the outside world, "Li Xinyang told" 21 Auto · First Sight Auto ".
(At 4:00 am on April 16, 2024, the product line and brand departments held a meeting to discuss. Li Xinyang is on the first right, and Liu Jie is on the second right.)
Regarding lithium iron phosphate batteries, executives discussed several aspects to "defend": firstly, the ideal pre research of lithium iron phosphate batteries should be initiated earlier than the L6 project. The self-developed batteries have good low-temperature retention, and the self-developed power estimation algorithm can also ensure the accuracy of power estimation; Meanwhile, the thermal management system developed based on heat pumps can control the temperature inside the car by absorbing heat from the air, allowing the L6 battery to achieve good pure electric range even in low temperature conditions.
As for how to present the L6's body safety more intuitively at the press conference, Li Xinyang and Li Xiang have discussed that in addition to showcasing the results of safety testing and design concepts at the press conference, they also need to learn from the industry and create a dual card attack video.
Li Xinyang said that there is a crucial shift here. "In the past, we used to feel that we were upright and not afraid of shadows. Now, we will stand more from the perspective of users, especially those who do not understand the ideal. We will proactively dispel their concerns when they buy a car
After the L6 was launched, some people questioned whether the rear suspension of the Ideal L6 adopted the same architecture as the Ideal ONE, and Ideal made a suspension video clarification. At first, some employees thought the video was unnecessary, but Li Xinyang received positive feedback from car owners and frontline salespeople: "Your response shows that you are not guilty
At the L6 press conference, Ideal learned some experience from Xiaomi and developed its own methodology. However, Ideal is also aware that Xiaomi can only selectively learn and cannot fully replicate it.
We cannot replicate a new Lei Jun or a new Xiaomi, "said Liu Jie, the product line president." Some things can be learned, but not everything
After the Xiaomi SU7 launch event, the car industry witnessed the influence brought by traffic. Car industry bosses learned from Lei Jun and created personal IPs, going from behind the scenes to the front stage, doing live broadcasts and sharing knowledge. However, a lesson learned from the MEGA controversy is that a lot of traffic is ineffective for selling cars.
After returning from Xiaomi, Li Xiang redrawn the business structure of Ideal Automobile and reflected on a series of events that have occurred since March this year - which links went wrong?
Li Xiang analyzed that in terms of value creation, the three brand defined keywords of home, luxury, and intelligence have always been adhered to, and the product itself is not a problem. But since last year, Ideal has been overly focused on sales from top to bottom, neglecting the foundation of Ideal's existence - users. Just thinking about what you want without considering the users
If the traffic does not reach the real consumers and prompt them to make purchasing decisions, then it is invalid traffic, "Liu Jie said.
Li Xinyang also believes that traffic is not important, users are important, and ultimately we need to return to the original main line - who is L6 going to be sold to and how can we impress him.
Li Xiang's' Release of Power '
The biggest highlight of L6 is its excellent cost-effectiveness among models priced at 250000 yuan. It is a mid to large sized SUV with large space, intelligence, and a 0-100km/h acceleration of 5.4 seconds. It is also the only car in the same price range that comes standard with four-wheel drive. For comparison, at the same price, Model Y, Jike 001, Wenjie M7, Xiaopeng G9, and Avita 07 can only be purchased in the rear wheel drive version.
The final pricing of L6 is significantly different from the pricing three years ago.
In 2021, when Li Xinyang first joined Ideal, he saw Li Xiang's pricing for L6 in a planning table. The Pro version was 269800 yuan and the Max version was 299800 yuan, both of which were 20000 yuan higher than the final market price.
In those two years, the price war had not yet begun, and the Chinese automotive industry was in a predicament of "shortage of chips and electricity". With supply exceeding demand, the common tactics used by new car manufacturers were "price protection" and "upward competition". On the last day of 2021, the starting price for the domestically produced Model Y rear wheel drive version was 301840 yuan -50000 yuan more expensive than today. In September 2022, Xiaopeng released the G9 with a starting price of 309900 yuan, and today it is 263900 yuan.
The starting price of the L6 Pro version at 269800 yuan was considered cheap at the time. But since the beginning of this year, the price war has become increasingly fierce, and in order to adapt to the market, Ideal has made two pricing adjustments.
In September 2023, the new M7 from Wanjie was launched with a starting price of 249800 yuan, breaking into the 250000 yuan market ahead of the Ideal. At that time, the cheapest model of the Ideal, the L7, was also priced at over 300000 yuan. The price drop has brought an increase in sales to Wanjie, with orders exceeding 100000 units within three months of its launch.
Considering the external market competition, the pricing of both versions of L6 was adjusted for the first time at the beginning of this year, with a reduction of 10000 yuan -259800 yuan for the Pro version and 289800 yuan for the Max version.
Actually, the starting price of 269800 yuan is a relatively healthy gross profit margin for the company, "Liu Jie told 21 Motors. In an ideal world, a healthy gross profit margin refers to a gross profit margin of over 20% for a single vehicle model, including BOM costs.
Since the release of the first car, Ideal ONE, Ideal has always priced based on product value while ensuring gross profit. Through the hot sales of the L9, 8, and 7 products, Ideal has become the first profitable new force car company and fully verified the correctness of this pricing strategy. In the 6 years before the release of L6, Ideal never doubted itself.
The second price adjustment occurred one week before the release of L6.
The most important lesson that Ideal learned from the controversy caused by MEGA in March was to lower its expectations for market sales and return to user value.
All our rolling forecasts for the market in history have failed for the first time since November 2023, and they may not be accurate again by March this year, "Li Xiang said during the Beijing Auto Show. Last September, Ideal's sales of new energy vehicles worth over 200000 yuan in the first quarter of this year increased by nearly 60%, but according to the Association of Automobile Manufacturers, the actual growth rate was 32.5%.
Realizing that the market expectations were too optimistic, Ideal internally reorganized the ideal sales target, cost, gross profit margin, and profit margin for the whole year, which was led by the product line.
On April 3rd, Ideal adjusted its organizational structure and established its product line. Unlike the original product and business departments, the product line is responsible for the final business results. This business result does not refer to sales volume, but to gross profit (including gross profit margin and gross profit amount).
Liu Jie said that before the establishment of the product line, the pricing of the car needed to 'convince Li Xiang'. After the establishment of the product line, the pricing power of L6 was delegated from Li Xiang himself to the product line, and the product line also needs to be "self financing".
How much should this car be priced? The product line will compete first, don't listen to me. After the competition, the product line will set a gross profit margin, which is related to the budget. All the money you spend has to come from the gross profit margin, and once it's settled, you can adjust it all at once Li Xiang told "21 Cars · See Auto" at the Beijing Auto Show.
After reorganizing market expectations and adjusting gross profit margins, the price of L6 has been adjusted for the second time, and this time the pricing initiative has been handed over to the product line.
On April 13th, a Saturday before the launch of L6, the main executives of Ideal held a strategic committee meeting at the headquarters. The first item of the meeting is to discuss the pricing and sales strategy of L6. That morning, Li Xinyang went to report with two plans in a nervous mood because he did not include the plan with a starting price of 259800 yuan:
Option 1: The starting price is 249800 yuan, and according to the ideal tradition, the first sales equity will receive an optional fund of 5000 yuan;
Option 2: The starting price is 249800 yuan, and the first sale equity will receive an optional fund of 20000 yuan;
After seeing the gross profit calculations of the two plans, the executives present remained silent for a long time.
Some executives, considering gross profit, prefer a starting price of 259800 yuan, while members of the third product line insist that the starting price of L6 should be below 250000 yuan.
Before reporting, the third product line had frequent communication with users and found that 250000 yuan was a key psychological threshold for users when purchasing a car. Priced below 250000 yuan, firstly it can better differentiate itself from L7, secondly it can attract some users below 250000 yuan, and thirdly it can make L6's competitive advantage more obvious in this price range.
The four-wheel drive version of many mid to large SUVs on the market generally costs nearly 300000 yuan. If four-wheel drive and all comfort configurations can be standard in the 250000 yuan price range, the L6 will be very lethal Li Xinyang told 21 Motors.
In addition to lower pricing, the product line also hopes to secure a first sales equity of 20000 yuan.
Some executives told Li Xinyang, "Everything that L6 can come standard is already standard, so don't give optional rights like other models. After all, L7 had no equity when it was launched, while L9, L8, and the new L series had optional funds of only 5000 yuan when they were launched. MEGA only has the right to upgrade charging stations and overcharging 6000 kWh.
But the product line feels that the first sales of L6 must be explosive