Bai Teng, Walking At The Crossroads

The proton car is walking at the crossroads between life and death.

Since the beginning of this year, the number of layoffs and arrears of suppliers has been heard from many times. The company, which once called Yu Wei Lai, Wei Ma and Xiaopeng as the "four dragons" of the new force of Chinese car making, is facing unprecedented operational challenges.

In early 2020, the sudden outbreak of new crown pneumonia disrupted the pace of all car companies, and it was undoubtedly "adding insult to injury" to the new force that is still in the early stages of development and with insufficient funds.

In June 26th, the concerned people of the proton car company interviewed the economic report reporters in twenty-first Century and admitted the business problems faced by the company at this stage. Mr. Bai said that management and shareholders are actively discussing the relevant plan to find ways to increase revenue and reduce expenditure and properly solve the problem of short-term capital shortage.

However, the plight of the proton car has not been able to sell the first new car in the two quarter of this year as planned. The new car window is about to close. Because of the escalating contradiction between the company and employees caused by the problem of arrears of wages, the resignation of employees and the distrust of the company also made it difficult for them to survive.

Tight capital chain

In fact, as early as April of this year, there were reports that the top 80% executives of the auto industry and the delayed payment of wages in China. Subsequently, proton responded that the development of the new crown pneumonia epidemic had no effect on the economy and industry, and that the development of the company was not able to stand alone. Business operations were facing great challenges. The company has taken a number of phased measures to reduce short-term fixed costs and ease financial pressure.

The specific measures include: the staff in China will suspend part of the remuneration according to their ranks, and the core management will reduce the salary by 80% and contribute to the C financing.

However, in the past three months, the problem of arrears of wages of the proton car has not been solved. In addition, the proton car was also heard from the offices in Shanghai and Beijing, and the factories in Nanjing stopped working. In order to purchase the vehicle qualification, the 470 million arrears of FAW Xiali will soon reach the deadline for repayment.

In June 25th, a member of the proton car company told reporters on twenty-first Century economic report that the Shanghai office was closed in April, and the wages of employees were in arrears. He told reporters that employees wanted the company to release the arrears of wages within a definite time point as soon as possible, but at the same time, it did not provide a satisfactory solution for employees.

In response to the twenty-first Century economic report, Mr. Bai responded that managers and shareholders are actively coping with the issue of arrears of wages. The company attaches great importance to the rights and interests of employees, and will solve them as soon as possible on the basis of fairness and impartiality. The specific arrangements are expected to be communicated with employees after approval by the board of directors at the end of this month.

According to public information, we have completed three rounds of financing and the total amount of financing is about $800 million. In addition to the Pre-A round investment it received in December 2016, in August 2017, the proton Motor Company acquired a total of 240 million A investment including Suning, Feng Sheng holdings and Nanjing SASAC. In June 11, 2018, it announced the completion of the B round of financing, with total financing amounting to US $500 million, of which FAW Group received $265 million.

However, for the "burning money" car, $800 million is not enough. Although many times, he has disclosed the C round financing plan, but he has not been able to get there yet.

In March 2019, Daley, chief executive of Proton car, told an exclusive interview with the economic report reporters in twenty-first Century that the C round of financing was being carried out. The goal was to be completed in mid 2019, and plans to launch models in the fourth quarter of the year.

In September of that year, according to the news of the proton vehicle, the C round of financing was coming to an end, and the estimated size of the financing was $500 million. The investors included FAW Group and Nanjing municipal government's industrial investment fund. At the end of last year, it also announced a formal strategic cooperation with Marubeni Co., Japan. Marubeni will participate in the C round of financing. The two sides will also explore further cooperation in such areas as travel services, energy solutions and overseas production and sales.

It is reported that the delay in financing of the company is not entirely in place, which is why the company is in trouble. "The C financing plan for Bai Teng has been delayed due to the outbreak of the new crown pneumonia, and is still in progress." Mr Bai said.

Start up car companies shuffle acceleration

"Money shortage" made it difficult for Barton to get into trouble, but it also had a series of problems, such as slow listing of products, internal turbulence and brain drain. In 2020, we must face up to the question of whether we can survive.

In 2017, it was a representative enterprise in the new force of Chinese car making. The company's founder Bi Fukang and Daley have many years of experience in senior executives like Infiniti and BMW, and are familiar with the Chinese market. Among them, Dai Lei, who served as general manager of Dongfeng Infiniti, planned a classic marketing case to help Infiniti open up the Chinese market.

In twenty-first Century, the economic news reporter interviewed Daley many times, and the fluent German Chinese had his own strategic rhythm. As a latecomer of the new force of the car making industry, he thinks that comparing with the others such as Bai Teng and Wei Lai, they still have their own opportunities, and the key is quality products.

From the US consumer electronics show to the Frankfurt auto show, it has been labeled "high-end" and "internationalized" from the very beginning. The unique design of Bai Teng also attracted many eyes of the industry.

The first car of M-Byte is located in a high-end pure electric medium SUV. Its biggest highlight is the sharing of full screen with 48 inches in the car. This is also one of the most important difficulties to overcome.

Despite repeated delays, plight is still struggling to launch new cars. "New crown pneumonia epidemic impact on the automotive industry chain is huge, affecting the promotion of mass production plan. We are making every effort to make appropriate business arrangements according to relevant circumstances to promote mass production related work. Mr Bai said.

But for Mr Bai, even when the new car is on sale, it will be very difficult to open up the market. Domestic Tesla has already taken the lead in the Chinese market, and its competitors, such as Wei Lai, Xiaopeng and Wei Ma, have initially established their own market base. In the cracks, it is hard for consumers to trust the bad ones.

Mr Bai is not the first new force to be in trouble, nor will it be the last one. Driven by Tesla's stimulus and China's policy of promoting new energy vehicles, the new Chinese motor car movement, which began in 2014, came to the turning point of fate in 2020. The epidemic has accelerated the reshuffle of start-ups, and only a few have survived. Most of them are doomed to be eliminated.

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