/// Shareholders repeatedly confront the CEO, an unprecedented scene in the automotive industry.

Editor: Xiao Ying

The confrontation between major shareholders and the CEO is also a rare scene in the automotive industry.

Since March this year, the conflict between Qihoo 360 founder Zhou Hongyi and Nezha Auto CEO Zhang Yong has continued to escalate, sparking various public opinion storms on social platforms.

Looking back at the focus of the confrontation between Zhou Hongyi and Zhang Yong, it mainly centered on Nezha Auto's marketing. Zhou Hongyi repeatedly criticized Nezha Auto's poor marketing and Zhang Yong's low-level speech skills, even bluntly saying, "You know nothing about the overall situation! Look at Xiaomi Auto's performance, can't you learn from Lei Jun?" Zhou Hongyi's actions indeed brought Nezha a "torrent of traffic".

As of May 27, Nezha L had exceeded 30,000 cumulative orders within 35 days of its launch, with 95% of pre-order users choosing the top-of-the-line 310 Flash Charge Red Edition. On May 26, Zhang Yong also expressed歉意 for the delay in delivery due to the high proportion of red editions exceeding 95% since the launch of Nezha L, causing significant pressure on the production supply system.

Nezha Auto has indeed gained some attention in marketing, but Zhou Hongyi's open confrontation with Zhang Yong in various occasions has also put Zhang Yong in an awkward position.

For outsiders, the "disagreement" between Zhang Yong and Zhou Hongyi has long been an open secret. Is Zhou Hongyi's confrontation with Zhang Yong just a traffic password? What is Zhou Hongyi's say in Nezha Auto? Will Zhou Hongyi still be able to influence the development path of Nezha Auto in the future?

01

Zhou Hongyi Fiercely Confronts Zhang Yong

According to incomplete statistics, Zhou Hongyi has publicly confronted Zhang Yong at least five times, and even evaluated Zhang Yong's personal abilities.

The origin of the incident lies in the Xiaomi Auto press conference, which sparked a new marketing paradigm in the automotive industry. At this time, Nezha Auto was also caught in a continuous decline in sales. Sales data showed that in February this year, Nezha Auto achieved sales of 6,085 units, a year-on-year decrease of 40% and a month-on-month decrease of 39.34%.

At the beginning of the year, Zhang Yong reflected that the reason for the continuous decline in Nezha Auto sales lies in the marketing not keeping up with the pace.

In March, Nezha Auto was on the verge of collapse, but Zhou Hongyi appeared in time, launching a series of criticisms at Zhang Yong, which repeatedly hit the trending topics within two months, generating sufficient traffic, and ultimately helping Nezha's new car achieve 30,000 orders.

In this process, although Nezha Auto gained sufficient traffic, for Zhang Yong himself, he lost face and even fell into a whirlwind of public opinion.

At first, Zhang Yong may not have refuted Zhou Hongyi from a marketing perspective. It could also be Zhang Yong's tolerance that allowed Zhou Hongyi's verbal attacks to become increasingly unbridled.

During a live broadcast visit to the factory in March, Zhou Hongyi first criticized Nezha Auto's marketing, saying, "You guys are always having fun from marketing to product planning, which is not good. What's the point?" He also吐槽ed the naming of Nezha Auto, saying, "Nezha uses all letters, UVXL. Basically, it's how to make consumers feel awkward and how to make consumers forget how to pronounce it. It's very strange."

At this time, although Zhang Yong was embarrassed, he did not completely refute Zhou Hongyi, but only said that "many brands are also named like this" regarding the brand naming. And since then, he has also expressed on social media that he accepts Zhou Hongyi's criticism and actively learns from Lei Jun.

Subsequently, Zhou Hongyi's criticism of Zhang Yong gradually shifted from the company to Zhang Yong himself. On April 22, Nezha Auto held a spring press conference in Tongxiang, Zhejiang. At the press conference, when Zhou Hongyi faced Zhang Yong offering him every Nezha model, he directly refused and clearly stated that Nezha Auto would not be his first choice.

Later, regarding Zhang Yong's product speech, he bluntly said, "I feel that today, my understanding of you has already exceeded your usual level. If Lei Jun were to speak, it would definitely not be this way. So I have a suggestion. You can work harder, including the script prepared by your marketing department. Everyone must put themselves in others' shoes."

Zhou Hongyi's remarks were equivalent to criticizing Zhang Yong's speaking skills on the spot. The evaluation shifted from the company to personal abilities, and the conflict between Zhang Yong and Zhou Hongyi escalated directly.

On June 3, Zhang Yong tweeted, "Today I heard a cold joke, which I have also felt deeply recently: everyone is not starting businesses anymore, they are all going to become entrepreneurial IPs." Just two days earlier, at the 2024 Guangdong-Hong Kong-Macao Greater Bay Area Auto Show, Zhou Hongyi insisted on discussing "how entrepreneurs build IPs" with Yu Chengdong, and the video went viral on the internet.

Zhang Yong's tweet was widely perceived by the outside world as "connotating" Zhou Hongyi. Even Yang Xueliang, Senior Vice President of Geely Holding Group, left a comment under Zhang Yong's tweet: "Yong Ge dares to speak."

In response to the surging public opinion, on the afternoon of June 4, Zhang Yong issued an emergency statement saying, "Let me talk about the background of the previous tweet. In the morning, I chatted with a friend about entrepreneurs building IPs, discussing that building IPs is a required course for companies, with more affinity and higher communication efficiency;

Some entrepreneurs may not be suitable for being IPs, and some companies already have strong strength. Do they need to come out and build IPs?

I feel that this topic is worth thinking about, and I didn't think much before sending it out. I didn't expect such a big reaction, and even some malicious people misinterpreted my intention."

In the statement, Zhang Yong also affirmed the benefits of Zhou Hongyi's frequent traffic boosting for Nezha recently. Zhang Yong said, "Recently, with the help and support of Mr. Zhou, Nezha has received unprecedented attention and boosted product order growth. Our internal review unanimously believes that half of the credit for the success of the L model goes to Mr. Zhou."

"As an investor, Mr. Zhou invested 1.9 billion yuan in us with real money and is now further encouraging and promoting domestic new energy. As a successful entrepreneur, he has continuously spoken up for domestic new energy, which deserves praise and support, not unfounded doubts," Zhang Yong added.

In response, Zhou Hongyi replied through a video, saying, "Seeing Zhang Yong talking nonsense again, I think recently Nezha has finally gained some fame and mention rate. Nezha's recent order volume has surged, with over 30,000 orders reportedly placed, and 90% are Red Edition (Hongyi Edition).

Now, I think Nezha's problem is not whether to discuss with others whether to generate traffic. Without traffic, there will be no customer acquisition. The biggest problem with Nezha before, as I said, is not whether to change the name. The most important thing is that Nezha Auto had no fame or mention rate before. Most people didn't even know the name. Why would people decide to buy your car?"

Subsequently, Zhou Hongyi warned Zhang Yong not to become arrogant again just because of the increase in orders for Nezha L. "Continue to maintain a humble and cautious attitude and continue to insist on doing a good job with traffic. Whether the traffic is created by ourselves or蹭来的, I believe that traffic represents customer acquisition ability and users' awareness of you. We must fight a beautiful comeback battle on Nezha L," said Zhou Hongyi.

Judging from their several interactions, Zhou Hongyi may indeed have some criticisms of Zhang Yong himself. Some netizens even bluntly said that they wanted Zhou Hongyi to fire Zhang Yong. But can Zhou Hongyi really shake Zhang Yong's position? For now, it seems not easy.

02

Shareholders Step Forward

The story needs to be traced back to three years ago, when Zhou Hongyi invested in Nezha Auto.

On October 19, 2021, according to Qihoo 360's announcement on external investment, it planned to invest a total of 2.9 billion yuan in Nezha Auto with its own funds, obtaining a 16.59% stake and becoming the second-largest shareholder of Nezha Auto. The investment was planned to be carried out in two steps through capital increase.

In the first step, Qihoo 360's wholly-owned subsidiary Chengdu Hongjing planned to acquire the capital increase rights of Nezha Auto's shareholder Nanning Minsheng New Energy Industry Investment Partnership (Limited Partnership) obtained during the B round of financing in February 2020 but not yet paid in full, and increase its capital by 900 million yuan with its own funds to obtain a 10.6944% stake. The capital contribution has been completed on May 31, 2021.

In the second step, Qihoo 360's wholly-owned subsidiaries Tianjin Qirui Tiancheng Equity Investment Center (Limited Partnership) and Qihoo 360 Fund Management Company planned to participate in the D1 round of financing, with a total planned capital increase of 2 billion yuan to invest in Nezha Auto. As of October 27, 2021, Tianjin Qirui had completed a payment of 1 billion yuan.

However, the second 1 billion yuan capital contribution corresponding to Qihoo 360 Fund has not been paid, and later announced to abandon the capital increase and directly transfer the investment rights.

Later, Zhang Yong said in an interview with the media, "360 Chairman Zhou Hongyi is quite generous and has already paid 1.9 billion yuan, with another 1 billion yuan not yet paid. So after discussing with Zhou Hongyi, we hope the team can increase its control and voting rights."

At the joint press conference of 360 and Nezha Auto, the most impressive sentence in Zhou Hongyi's speech was "If Lei Jun can make cars, why can't I?" Zhou Hongyi also emphasized that "the cooperation宗旨between 360 and automakers is to 'help without causing trouble.'" At this point, Zhou Hongyi still demonstrated the magnanimity and breadth of an investor.

However, the continuous decline in Nezha Auto sales, which brought losses to 360, made Zhou Hongyi unable to sit still.

On April 19 this year, according to Qihoo 360's latest financial report data, Qihoo 360's investment loss in Hezhong Auto reached 687 million yuan in 2023. In the annual report, Qihoo 360 mentioned that its shareholding ratio in Hezhong Auto is about 9.37%, which should be accounted for as a long-term equity investment using the equity method.

And this is also one of the key reasons why Zhou Hongyi angrily confronted Zhang Yong, as it directly concerns 360's interests.

But can Zhou Hongyi personally step forward and replace Zhang Yong? For now, obviously not, and even in the final confrontation between the two, Zhou Hongyi has conceded.

First, from the perspective of equity, according to Qichacha, although 360 is a shareholder of Nezha Auto, its wholly-owned subsidiary Chengdu Hongjing ranks only fourth, with a stake of 7.4%. While Zhang Yong, as the CEO of the company, holds 1% of the ultimate beneficial shares.

Both have equity in the company, but Zhang Yong has served as CEO for many years and has always controlled the company's actual power. On May 24 this year, following his previous role as General Manager of the Marketing Company, Zhang Yong also took on the role of General Manager of the Product R&D Center.

Nezha Auto previously underwent organizational restructuring, integrating the original Project Management Center, Product Planning Center, Automotive Engineering Research Institute, Intelligent Research Institute, and R&D Verification Center into a "Product R&D Center" to coordinate business management.

In addition, in the rumor-debunking tweet on June 4, Zhang Yong directly positioned Zhou Hongyi as an advisory role.

Zhang Yong said, "The logic that Mr. Zhou can't drive a car, so he can't make a car doesn't make sense. Those who build airplanes don't necessarily know how to fly them. Find professionals to do professional things. Mr. Fang is an automotive technology expert and the chairman. I am the CEO, leading a team of automotive professionals with over 20 years of experience to build cars. Isn't that great? To give an example, Mr. Zhou sits in the back row representing users and providing us with riding experiences and suggestions. I sit in the front row focusing on both feelings and technical implementation. I think this cooperation works well."

On June 2, Nezha Auto's official WeChat account published an article titled, "Should Nezha Change Its Name? Let's Hear What the Experts Say." Although the article put Zhou Hongyi's request to "change the name" first, subsequent "experts" invited by Nezha Auto, including Zhang Yong and six others, unanimously opposed the name change, except for Wu Yingqiu, the chairman of Global Auto, who was somewhat ambiguous.

This is actually equivalent to Nezha Auto giving Zhou Hongyi a very respectable official response. If this "fight" is forced to be counted as a confrontation between Zhou Hongyi and Zhang Yong, the loser is Zhou Hongyi.

It is not difficult to understand why Zhang Yong involved Nezha Auto's Chairman Fang Yunzhou in his June 4 statement.

In the war without smoke of "Nezha changing its name," it ended with Zhou Hongyi's concession. Perhaps when Zhou Hongyi stepped forward, he wanted to seize control of Nezha Auto's discourse power, but ultimately failed, and Zhang Yong will continue to control Nezha Auto's future development.

03

The Birth of an Automotive Internet Celebrity

In the past two months, the entire automotive industry has been turned upside down by the red-clothed patriarch Zhou Hongyi.

Zhou Hongyi first sold his long-owned Maybach for a sky-high price, taking the opportunity to hold a 798 Mini Car Show. On the first day of the Beijing Auto Show, he sat directly on the roof of a car and served as a car model, but still felt that the crowd's attention was not focused enough. Then he turned around and directly took a plane to the sky.

To say how such a big change could happen, perhaps Lei Jun should take half of the responsibility. Who made Xiaomi Auto so successful, making this former rival envy and then jealous.

In fact, there are three successful entrepreneurs who have crossed over into the automotive industry, besides Zhou Hongyi, there are Huawei's Yu Chengdong, known as "Yu Dazui," and Xiaomi Auto's Lei Jun.

As automotive industry entrepreneurial internet celebrities, all three are very good at building personal IPs, but each has a different path. Huawei's Yu Chengdong is more adept at creating various buzzwords based on Huawei's own capabilities, such as "far ahead" and so on.

Lei Jun's personal image has always been user-friendly since the mobile internet era. His "are you ok" has been widely recognized by the public. This image is built on his years of direct communication and sincere dialogue with users. Through live broadcasts and other channels, he exhibits a down-to-earth style, making consumers believe that every word he says is reliable.

In a live broadcast on April 18 this year, Lei Jun continued his consistent style. Although he is called the "male protagonist of a refreshing novel," he frankly admitted in the live broadcast that he was not the top scorer in the college entrance examination and did not have 4 billion yuan in savings, still focusing on sincerity and practicality.

Comparatively speaking, Zhou Hongyi is more adept at creating public opinion topics.

Whether it was the "3B War" with Baidu, the "3Q War" with Tencent, or the competition in the smartphone market, Zhou Hongyi's actions always provoke widespread public discussions, increasing brand awareness and attention.

This style earned him the nickname "Red Cannon" in the early days, and he brought this ability into the automotive industry, continuously