I didn't expect Zhou Hongyi to suddenly become friends with car companies?

The leader of the Red Clothes Sect may have a "hot search physique". In April last year, Zhou Hongyi put himself on the hot search because of his divorce. This April, Zhou Hongyi has been a hot topic.

Some netizens have calculated that Zhou Hongyi may be the entrepreneur who has commented the most on Xiaomi cars and Lei Jun recently. On March 30, Zhou Hongyi commented on the marketing of Xiaomi cars: Xiaomi is the marketing master of domestic car manufacturers; on April 6, Zhou Hongyi sharply commented on Xiaomi cars: many people only envy Lei Jun, but do not market themselves; on April 9, Zhou Hongyi sharply commented: Xiaomi tells us that marketing a car may be more useful than just focusing on the configuration; on April 19, Zhou Hongyi expressed optimism about Lei Jun's car manufacturing, saying that the future reshuffle will not depend on cost-effectiveness but on intelligence; on April 22, Zhou Hongyi bluntly said: employees who buy Xiaomi cars should be encouraged rather than fired...

Zhou Hongyi recently publicly sold his 9-year-old Maybach 600 in a live broadcast, saying he is preparing to switch to a new energy vehicle, and called on the bosses of new energy vehicle companies to send him test drive cars.

Perhaps due to concerns about their own brand strength, this time Zhang Yong, the CEO of Nezha, did not respond immediately, but let Li Bin from NIO take the lead and respond first. Subsequently, including Avita, Deep Blue, and Yangwang, many brands responded one after another. Dongfeng Warrior, Xiaopeng, Jike, Ideal, and Xingtu Xingjiyuan even brought their flagship models to the 360 office building. For a while, Zhou Hongyi became the sought-after traffic star for many new energy vehicle brands, enjoying great popularity.

Previously, Zhou Hongyi was the center of many public opinion whirlpools, such as the Tencent "3Q" war, and the "showdown" with Lei Jun in Chaoyang Park, which also made 360 famous.

Turning back to 2010, that year Tencent and 360 erupted in the "3Q War" of mutual exclusion of each other's application software. At that time, neither side was willing to back down, and the battle escalated, forcing users to "choose one of the two". This four-year "3Q War" became the "first case of unfair competition in the Internet".

In this battle, Zhou Hongyi and 360 were destined to be "winners" even before the war began. Regardless of winning or losing, 360's brand power was greatly enhanced in the end. Kingsoft's Duba and QQ PC Manager had almost "monopolized" the antivirus software market, but this battle made Zhou Hongyi and 360 famous.

At that time, Zhou Hongyi also fired shots at Lei Jun over a mobile phone issue. Zhou Hongyi once issued a challenge to Lei Jun for a showdown in Chaoyang Park on Weibo. Although neither of them ultimately showed up, it attracted attention across the internet. At that time, Zhou Hongyi was preparing to enter the mobile phone business, and the 360 phone had already attracted attention before it was even on sale.

Who would have thought that today Zhou Hongyi and the two of them have "turned enemies into friends". On April 20, Zhou Hongyi posted two consecutive Weibo posts, calling Ma Huateng and Lei Jun old friends, and posted a photo of himself shaking hands with Ma Huateng. This scene took place at the China Internet 30th Anniversary Symposium jointly organized by the Ministry of Industry and Information Technology and the Internet Association. Not only did Ma Huateng attend, but Lei Jun also attended. The difference is that the "old opponents" have become old friends, but Lei Jun politely declined Zhou Hongyi's request for a car on the spot.

At the height of Zhou Hongyi's popularity, the capital market reacted unexpectedly to 360, with the stock price falling for three consecutive days from April 18th to 22nd, dropping by 2.26%, 2.68%, and 1.13% respectively.

As of the close on April 22nd, the stock price of 360 was 7.89 yuan, a 73% decrease from its high point of 29.32 yuan in 2020. Since Zhou Hongyi and Hu Huan divorced and 9 billion yuan was taken away, the stock price of 360 has continued to decline, dropping to a low of 6.19 yuan in February 2024, the lowest since 2013.

Faced with the sluggish stock price of 360, can Zhou Hongyi turn the situation around?

01 Car companies line up to send cars to the "leader"

From Zhou Hongyi's interactions with many car companies on Weibo, his influence can be seen. BYD's Tang U8, Avita, and Jike 009 have interacted with him. While other brands are still in the process of arranging, Xiaopeng and Jike have already taken the lead by driving the Xiaopeng X9 and Jike 009 directly to the 360 headquarters.

Zhou Hongyi is facing the "embarrassment of happiness" from many car companies, claiming that he has become picky and even "difficult to fall asleep" because of it. In fact, referring to the four major standards mentioned by Zhou Hongyi, spaciousness and comfort have already basically eliminated brands like Xiaomi SU7, which may also be the reason why Lei Jun rejected Zhou Hongyi. With a net worth of over 10 billion, Zhou Hongyi has high requirements for passive safety and active safety configurations because he doesn't drive himself. He also has requirements for rear seat privacy, and with intelligent cabins, domestic brands that can meet these requirements are rare.

Surprisingly, as the major shareholder of NIO, Zhou Hongyi did not join the ranks of car delivery. After Lei Jun announced Xiaomi's entry into the car manufacturing industry, Zhou Hongyi, as an old rival and friend, was unwilling to fall behind. In 2021, he invested 2.9 billion yuan to lead the investment in NIO, indirectly holding approximately 16.59% of NIO's shares, becoming the second largest shareholder of NIO. Prior to this, Zhou Hongyi had frequent interactions with NIO and had sufficient understanding of NIO. In 2020, NIO sold 15,100 vehicles, ranking fifth among new forces in car manufacturing.

Nezha Motors, compared to the new forces in car manufacturing like "We Xiaoli," has relatively low brand influence and market share. Its product line is single, focusing on cost-effectiveness and the low-end market. Additionally, Nezha Motors has been plagued by funding problems since its establishment. NIO Chairman Li Bin once declared that at least 20 billion RMB is needed to start a car company, while the amount of funding Nezha Motors has received since its establishment is relatively meager compared to new forces like We Xiaoli. According to "First Financial," the most recent investment came from local state-owned enterprises, with a funding amount of only 5 billion RMB, which may be far from sufficient for the extremely capital-intensive new energy vehicle manufacturing.

Zhou Hongyi has not received a response or a car from NIO after publicly requesting a car in a video. Instead, he emphasized on Weibo that he was not trying to promote NIO. This explanation may also make sense, after all, NIO, which takes a low-end route, does not meet several of Zhou Hongyi's car selection criteria.

It is worth mentioning that last month, Zhou Hongyi visited the official live broadcast of NIO's CEO Zhang Yong to promote the upcoming new product, NIO L, for over 3 hours. During the live broadcast, Zhou Hongyi criticized NIO for not being good at marketing and urged Zhang Yong to learn from Xiaomi's approach to showcasing production bases. Is it just a coincidence that Zhou Hongyi requested a car after this event?

02 Zhou Hongyi's "love and hate" for NIO

As a latecomer in the new energy vehicle industry, NIO was once very competitive and even held the top spot in sales.

However, in 2023, NIO's annual sales volume was only about half of its annual sales target of 250,000 vehicles, with 127,496 vehicles sold. In December 2023, the sales volume dropped by 34.12% year-on-year and 58.93% month-on-month, marking the fifth consecutive month of declining sales. NIO's ranking among new forces dropped from first in 2022 to fifth in 2023, with Ideal, NIO, Leapmotor, and XPeng taking the top four spots.

After a disappointing 2023, NIO's CEO Zhang Yong publicly reflected on January 2, 2024, attributing the reasons for the poor performance to six aspects, including poor coordination during the transition between old and new products, erratic pace, and overpricing of new products. Before the public reflection, Zhang Yong had already learned from XPeng and brought in "Iron Lady" Wang Fengying for personnel adjustments at NIO. Zhang Yong himself also served as the president of the marketing company and personally took charge of marketing, while NIO's vice president, Zhou Jiang, also served as the executive vice president of the marketing company, assisting in managing the Shanhai business unit and overseeing the marketing of the Shanhai product line.

After this round of new personnel adjustments, the sales of NIO cars did not improve. In the first quarter of 2024, NIO car sales were 25,466 units, a year-on-year decrease of 2.71%, ranking tenth among new energy brands. The target task of 300,000 units for the whole year was only 8.49% completed, the lowest completion rate among the top ten. In March 2024, NIO car sales were 8,317 units, making it one of the only two car companies, along with NIO, to experience a year-on-year decline. Similarly, Zero Run, which follows the cost-effective and technological route of NIO cars, sold 14,567 units in March. In the first quarter of 2024, NIO cars, NIO, and Aiways all experienced a year-on-year decline in sales. Aiways declined by 7.66%, and NIO declined by 3.18%.

After Zhou Hongyi invested in NIO, NIO also experienced a brief glory. After winning the sales championship in 2022, it began to decline. In the face of the rapid development of its competitors, NIO's sales instead showed a year-on-year decline, which has greatly disappointed Zhou Hongyi. This can be seen from his crazy criticism in Zhang Yong's live broadcast.

In the live broadcast, Zhou Hongyi did not give NIO CEO Zhang Yong any face, calling the car name "awkward" and the marketing "self-indulgent." Even though such criticism may cause certain damage to NIO's brand, upon careful analysis, as a major shareholder, Zhou Hongyi's criticism of NIO may come from a place of deep love and concern.

It is worth noting that Zhou Hongyi himself does not have a driver's license. He has previously only been in contact with luxury cars like the Maybach 600. Therefore, whether it is from the perspective of driving or riding experience, his suggestions may not necessarily be accurate or fair.

03. Is NIO dragging down 360?

Zhou Hongyi's helpless "hype" may also be related to the not-so-good performance of 360.

According to the financial report, in 2023, 360's revenue was 9.055 billion yuan, a year-on-year decrease of 4.89%; the net profit attributable to the parent company was -492.5 million yuan, a year-on-year increase of 77.65%. This marks the fifth consecutive year of declining revenue and the second consecutive year of net losses for 360. In 2022, 360's revenue was 9.521 billion yuan, a year-on-year decrease of 12.54% from 2021's 10.89 billion yuan, and the net profit attributable to the parent company was -2.204 billion yuan, a year-on-year decrease of 344.23%, marking the largest loss since 360 went public.

From 2018 to 2020, 360's revenue was 13.13 billion yuan, 12.84 billion yuan, and 11.61 billion yuan, respectively. From 2019 to 2021, the year-on-year revenue declines were 2.19%, 9.55%, and 6.28%, respectively. Revenue reached its historical high of 13.13 billion yuan in 2018, but has since declined to 9.055 billion yuan in 2023.

The turning point for 360 from profit to loss was in 2021, which coincided with its investment in NIO's time period. In 2022, 360 disclosed a huge loss of 2.204 billion yuan in its financial report, with a net loss of 946 million yuan from its joint ventures and affiliated enterprises, of which the investment loss recognized under the equity method for NIO was 894 million yuan. In the previous years, both joint ventures and affiliated enterprises had contributed positive returns to 360. Since investing in NIO, 360 has not made a profit again, indicating that NIO has become a burden for 360.

In the 2022 financial report, 360 disclosed that the revenue of NIO was 13.329 billion yuan, with a net loss of 6.919 billion yuan. However, in the 2023 financial report, 360 chose to remain silent. According to Tianyancha data, NIO's revenue for the first three quarters of 2023 was 8.829 billion yuan, with a net loss of 4.694 billion yuan. The net cash flow generated from operating activities was -4.191 billion yuan, and the net cash flow generated from investing activities was -1.602 billion yuan.

The losses of Hezhong Motors are reasonable, after all, new car-making forces are currently in a state of loss. In 2020, Hezhong Motors had a revenue of 1.297 billion yuan and a net loss of 1.32 billion yuan; in 2021, Hezhong Motors had a revenue of 5.735 billion yuan, a year-on-year increase of 342%; and a net loss of 2.908 billion yuan, a year-on-year increase of 120%. In 2022, Hezhong Motors achieved record sales, but the net loss reached 6.919 billion yuan. In the first half of 2023, Hezhong Motors' net loss was 2.833 billion yuan. In the third quarter, the net loss was 1.861 billion yuan. From 2020 to the third quarter of 2023, Hezhong Motors' total net loss reached 15.841 billion yuan.

During the live broadcast with the senior management of Nezha Motors, Zhou Hongyi's "angry retorts" to Zhang Yong were not limited to the occasion, but also a manifestation of Zhou Hongyi's dissatisfaction as an investor in Nezha Motors, and he bluntly said, "I don't understand anything. Can you learn from Lei Jun of Xiaomi?"

Why are car companies lining up to give away cars?

Whether Zhou Hongyi, who is well versed in marketing, is engaging in hype is not for judgment, but those car companies that respond quickly and line up to give away cars are not just flattering the leader, but more of a helplessness in the fierce market competition.

Zhou Hongyi announced that the headquarters of 360 Group has received products from Dongfeng Mengshi 917, Xiaopeng X9, Jike 009, Ideal MEGA, Singulato iCROSS, and Singulato iCROSS ET. Since these car brands have already arrived, other car companies may follow suit in the future. Zhou Hongyi even joked about holding a small car exhibition at the company's doorstep.

These car companies are so generous to give cars to Zhou Hongyi, and more of them may want to ride on Zhou Hongyi's popularity. Once Zhou Hongyi chooses his own brand, he will earn enough traffic. Even if Zhou Hongyi does not choose, they will only gain without loss. Even Dongfeng Nano, which focuses on small pure electric cars, and Rui Blue, which focuses on cost-effectiveness, still want to make their presence felt, even though they know that their products are difficult to meet Zhou Hongyi's car needs.

It all stems from the intense competition in the new energy vehicle market. As leading companies in the industry, BYD and Tesla are both facing a harsh competitive environment. Currently, there are about 80 new energy vehicle brands in China, with around ten well-known and competitive ones. BYD is the leader, and other leading domestic brands, such as Geely, Changan, Chery, GAC, Great Wall, as well as Hongguang Smart, Weimar, and Leapmotor, basically form the first echelon of new energy vehicles.

According to BT Finance statistics, among these 80 new energy brands in China, only 23 have monthly sales of over 10,000 units or have achieved this in the past. The recent attention on Dongfeng Nano and Rui Lan Motors is also a result of necessity, as their sales in March were only 1955 and 624 units, respectively. Riding on the popularity of Zhou Hongyi can greatly help in promoting their own brands.

Among these 23 new energy vehicle companies with sales of over 10,000 units, many have not yet sent cars to Zhou Hongyi. Whether it's because they don't want to join the hype or for other reasons is still unknown. However, focusing on improving product competitiveness and cultivating internal strength may also be another form of "hype" in the minds of consumers. The follow-up of the Zhou Hongyi car incident will continue to be monitored by BT Finance.