Text/Jincuodao Channel
In Shandong, for an ordinary man, buying a "luxury car" of the same model is not something that requires gritting one's teeth and stomping one's feet.
Behind this, we have to thank a company that is "not short of money" - Redding Automobile, for bringing the "Laotou Le" mobility scooter to the market and helping many young and old men fulfill their dream of becoming a "car owner". Dream.
Once upon a time, Li Guoxin, the founder of Reading Automobile, commented that players in the domestic car-making market were either defrauding the country’s money or hijacking capital.
He is different. He always adheres to the three no's principles: no bragging, no financing, and no blood transfusions.
In the automotive industry where money is flowing like water, he even uttered wild words: Reading is always rich.
In 2017, Li Guoxin also spent 345 million to shoot a painting, which seems to be a solid case of "not short of money".
At that time, Li Guoxin would not have thought that today, six years later, he would eventually turn against the local magistrate who had always protected the automobile industry because of money issues.
Boss Li, who was short of money, filed a report and sued government officials for using car companies to inflate local GDP.
What is even more embarrassing is that the former scooter giant is now in a desperate situation without the guaranteed loans provided by the government.
Many people wonder why this car company can be so crazy?
You claim to be "no financing, no shortage of money", so why do you end up in such a mess?
There were actually early signs of Reading’s collapse, and the government did not take the blame.
It has topped the sales of electric vehicles for three consecutive years and prides itself on being “not short of money”
When it comes to domestic new energy vehicles, Reading Automobile is far less famous than Wei Xiaoli and other car companies.
Although it is not ranked among new energy vehicles, Redding was once a giant in low-speed micro electric vehicles and had a well-known product - Laotou Le.
In 2001, Reading Automobile's predecessor Bidwen stepped onto the trend of electric bicycles and saw business opportunities earlier than its peers.
Before BYD had obtained new energy patents and Tesla had not “attacked” the Chinese market, Bidwin established Reading Automobile Company and took the lead in the production of low-speed three-wheeled and four-wheeled electric vehicles. .
As soon as Reading was born, it found its positioning: targeting the travel needs of a population of 600 million.
Redding's three-wheeler can be directly transformed into a "luxury car", and Lao Toule can also join the wild army of transportation.
Before the emergence of Wuling Hongguang MINI, Reading Laotoule had already swept through the third- and fourth-tier rural markets and traveled freely in rural cities.
The ultra-low price of several thousand yuan, the convenience of no insurance and no need for a driver's license made the old man happy to become a road tyrant.
In 2018, when there were only more than 2 million new energy electric vehicles in the country, Shandong Province already had 3 million "Laotoule" vehicles.
On the road, pedestrians may encounter a suspicious-sized mini "Hummer" at any time, gliding by quietly and leisurely.
Even at train stations and near stations, old people can be found competing with taxis for jobs.
This compact, convenient and cheap Oriental car has even spread overseas and has become a favorite among foreigners.
At that time, Reading Motors was the leader in the electric vehicle industry.
From 2016 to 2018, Reading's sales of low-speed electric vehicles were 150,000, 210,000 and 287,000 respectively, ranking first in electric vehicle sales for three consecutive years.
According to data from the Shandong Automobile Industry Association, the total output of low-speed electric vehicles in Shandong in 2017 was 756,000 units, and the output of one company in Reading accounted for 30% of the market.
Based on Laotoule’s explosive dividend period, Reading Automobile has been rising all the way and has become an industry giant. In 2018, Reading's total annual revenue was as high as 12 billion yuan.
But the good days soon came to an end.
With the development of new energy vehicles, Laotou Le has lost its advantages in terms of product quality and cost performance.
Accidents happen frequently in Lao Tou Le, and the beautiful cars of the old men in the village suddenly become road killers.
With the rectification of national regulations and the strict prohibition on new electric vehicle production capacity, Reading’s good days came to an abrupt end, and Li Guoxin’s strategic plan to build the “Nation’s No. 1 Car” also came to an end.
Since the reorganization, Reading's sales have begun to decline and operations have become increasingly difficult.
In desperation, Reading was forced to transform and embark on the road of building new energy vehicles.
However, in the era of automobile competition, the pace of product release, market delivery, and rapid mass production of various car companies has accelerated. Reading, who joined as a newbie, did not master the competition method so quickly.
Bragging that he would sell 2 million cars, but now he can’t even deliver the car
Redding, who has just transitioned into car manufacturing, is still immersed in the joy of success.
Regarding the transformation to car manufacturing, Redding simply and roughly carried out a coin-spending operation, showing everywhere: I am not short of money.
It has successively acquired Shaanxi Qinxing, BAIC Mustang and other companies, thereby obtaining car manufacturing qualifications, bidding farewell to the low-speed electric vehicle market, and officially joining the "genuine army" from "Yeluzi".
With the qualifications to build cars, Reading spent another 20 billion yuan to establish a production base.
During this process, the local government provided great assistance and provided a one-time guaranteed loan of 1.3 billion. Reading became the only company in Weifang City with new energy vehicle qualifications.
In turn, Reading has also given the government face. Compared with PPT players, Reading appears to be very reliable, delivering new cars to the market within one year.
In the past, it had broad channels and successful experience, and in the latter, it had double guarantees of government qualifications and funds, which gave Reading Automotive great confidence.
Li Guoxin, who is busy doing big things, was even called the "Rebus" of Weifang, Shandong by the media.
In 2019, Reading Auto struck while the iron was hot and launched the Reading i series.
However, due to a series of problems such as too short cruising range, Reading sold only 3,387 units in 2019, which was severely slapped in the face by the market.
Faced with such achievements, Li Guoxin has always held the original intention of building cars "for the sake of 600 million people's travel", and declared: This is just the beginning, and we will make more big moves in the future.
The so-called "big move" did not appear until April 2021, and it was after Wuling's mini car achieved great success.
Reading Auto followed suit and immediately launched the Reading Mango series of products, focusing on the A00-class pure electric mini-car market.
It even carried out intensive brand marketing bombardment and invited Huang Xiaoming to be the brand spokesperson and appear in the variety show "Chinese Restaurant".
This wave of marketing has successfully boosted sales. In 2021, Reading sales reached 30,400 units, breaking into the top 15 new energy sedan sales list.
The inflated Li Guoxin even boasted that by 2025, Reading’s total sales volume will exceed 2 million vehicles.
But the good times did not last long. Reading, which focused on low-price strategy, saw sales plummet, which brought a big crisis to Reading.
Li Guoxin was once proud of Reading's abundant cash flow, but now he is no longer confident.
Since October, dealers around Reading Auto said that after Redding received full payment, it has been slow to deliver the car. News about Redding Auto’s arrears, salary cuts, and broken capital chains have continued to spread. out.
In the table "Statistics of vehicle payments owed to dealers nationwide by Reading" compiled by dealers, the accumulated arrears exceed 20 million yuan.
Tianyancha data also shows that in November 2022 alone, the total amount of executions in Reading exceeded 12 million yuan.
Fourteen years after its establishment, after its glorious annual revenue of nearly 12 billion, Reading, which was not short of money, began to worry about money.
Redding is short of money. Even if it has money, it will be difficult to "come back to life"
In the automotive industry where Weilai founder Li Bin complained that 20 billion is not enough to spend, Redding has to Admit it, the car-making industry is a gold-eating beast.
As the prices of upstream raw materials for car manufacturing continue to rise, the cost of car manufacturing is also increasing.
A report from the consulting agency AlixPartners shows that as of May 2022, the average raw material cost of electric vehicles is 58,600 yuan per vehicle.
Even the best-selling Wuling Hongguang MINI electric car is basically unprofitable, with the profit of each car being only about 100 yuan.
This is even worse for Reading Cars, which has poor sales, and can only continue to increase prices! Price increase! Price increase!
From October 2021 to the end of 2022, Reading has experienced 5 rounds of price increases, with an average price increase of 2,000 yuan every two months.
Even so, it can't save Redding who is in the turmoil.
Redding’s “explosion” this time due to financing problems has actually been revealed for a long time.
From the end of 2021, Reading Auto’s economic situation has shown red flags. After entering 2022, the problem of overdue payments continues to arise.
Reading, which is besieged on all sides, is in urgent need of financing and blood transfusion.
On November 21, 2022, Reading Auto announced the completion of Series A financing, with the overall financing scale being 3.2 billion yuan.
But according to Li Guoxin, this financing is conditional, that is, the government must provide Reading with mortgage renewal.
If the loan is not renewed, financing capital will not come in, which is why the desperate Li Guoxin did not hesitate to fight with the local government.
Right now, Reading, which cannot raise funds, is in a very passive position. The production line has been severely affected, and it has no choice but to stop work and production.
In addition, Redding also announced that after the completion of this round of financing, subsequent rounds of financing will be launched based on specific circumstances.
This also means that Reading Automobile has completely embarked on the path of relying on capital transfusion.
But a short blood transfusion seemed difficult to bring Redding back to life.
In the final analysis, the biggest problem of Reading Automobile is that its products are not competitive enough.
Redding, which had no technology in the early days, could only spend huge sums of money to acquire technology in order to enter the new energy track.
Faced with rivals such as Wuling Hongguang, Chery, and Changan, Reading is not resistant to competition in terms of brand awareness, technical strength, and financial capabilities.
In terms of branding, Reading has long been a low-end brand in public perception.
To fight for technology, Changan Automobile invests 80 billion in research and development every year. After the transformation, Reading has made up for its technical shortcomings through the acquisition of Mustang Motors, but it has been insufficient in product research and development in the future.
Even in terms of car configuration, Redding was beaten.
According to the official website, only the highest configurations of Reading Mango cars are equipped with airbags, and the price is much higher than other brands of cars.
Many users also complained about the poor car experience in Redding, with basic car problems such as abnormal brake noise, brake lights not working, and the central control screen freezing.
Even the server that directly connects with consumers has great hidden dangers in Reading.
As of the end of 2021, Reading has a total of about 3,000 distribution outlets, most of which are franchisees.
In traditional car companies, service is an important part of the survival of the brand. Reading, a new force, obviously lacks in this link.
New energy car manufacturing is still at the forefront. New car-making forces, traditional car companies, and technology giants are becoming more and more popular in the competition, and they are eager to show their talents.
Redding Automobile is expected to launch a series of new models in 2023, covering various vehicle categories such as sedans, SUVs, MPVs and even sports cars, which still requires considerable capital investment.
Today’s financing of 3.2 billion is a drop in the bucket for new energy vehicle manufacturing.
Even if it is supported by local state-owned assets this time, it will not be easy for Reading Automobile to break out of the tight encirclement.
After all, veteran players such as "Wei Xiaoli" are still in the whirlpool of losses.
In the next few years, it is still unknown whether Reading Auto will be able to successfully build cars.
The explosion in Reading also reminded new energy car manufacturers: strength is the last word.
Otherwise, as the automobile industry changes, anyone may be the next "Reading".
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The author of this article | Renee