The Running Era of Zhang Xinghai and Sailis

Original, Microscopic Story Editorial Department

Zhang Xinghai still remembers the scene when he first met Yu Chengdong.

At that meeting, the two exchanged in-depth views on new energy vehicles. Due to the same direction, the cooperation intention of Huawei and Cyrus was finalized after several hours of talks.

Later in public, Mr. Yu said: "What impresses me deeply about him [Zhang Xinghai] is his keen sense of smell and determination."

It was with this exceptional business sense that in the 1980s, Zhang Xinghai made a fortune in Baxian County, under the jurisdiction of Chongqing, by relying on a spring, and went south along the Jialing River and the Yangtze River to do business in Shanghai.

Then, with the pioneering energy of the people of Sichuan and Chongqing, he rushed into the automobile industry regardless of the outside world’s prejudice against traditional manufacturing. After more than 30 years of success in business, he chose the new energy automobile industry three times.

Today, Cyrus cars have been racing forward for 38 years. On February 5, the Cyrus Auto Super Factory was completed and put into operation and the first delivery event of the M9 was held in Chongqing. In this super factory under the "brain of the automobile industry", thousands of new cars are ready to go, and the scene is spectacular.

The Cyrus car represented by Zhang Xinghai has also undergone several important turns in the changing times, and has gradually become what it is now – leaving its own position in China’s new car movement and representing the progress of China’s industrial upgrading.

The following is the true story about Cyrus cars:

Text | Chang Ningning

Editing | Zoran

Zhang Xinghai’s story begins with a spring.

In the 1980s, Chongqing’s industry developed rapidly, but everyone was held back by a small spring.

Spring is an important component in industrial manufacturing. But in China at that time, spring manufacturing was monopolized by foreign companies, and the price of an imported spring exceeded $1.

Zhang Xinghai, a 23-year-old young man born in Baxian County, Chongqing, smelled of business opportunities. In 1986, Zhang Xinghai and several brothers invested only 8,000 yuan to establish a Phoenix Spring Factory in his hometown, Fenghuang Town, Baxian County, Chongqing, engaged in spring processing of household appliances.

Picture | In 1986, Zhang Xinghai founded Chongqing Baxian Phoenix Electric Spring Factory

The people around him were not optimistic about Zhang Xinghai’s career, and they all advised him not to waste his efforts. Everyone thought that "China cannot produce a square silk spring with the same performance as foreign countries". But Zhang Xinghai was not convinced and decided to make a high-level spring in Chongqing.

Hard work pays off, and it didn’t take long for Zhang Xinghai to produce a domestic spring with the same performance as an imported spring, but the price was only 1 yuan. After the cost was knocked down, high-quality and cheap domestic springs soon went into marketing activities in Chongqing, replacing local imported springs.

In order to make his own spring have a wider range of application scenarios, Zhang Xinghai took a green train for more than 20 hours to a factory in Jilin for door-to-door promotion and sales.

When the other party saw the spring brought by Zhang Xinghai, his eyes glowed and he shouted, "This is the spring we want." Before he could rub his swollen legs, Zhang Xinghai took the order.

Fenghuang Town has also become the place where Zhang Xinghai made his fortune. The Phoenix Spring Factory has changed from a small tile factory to a large local enterprise with multiple factories.

In the 1990s, Zhang Xinghai became a veritable Chinese "spring king", and he took a spring as an opportunity to enter the field of auto parts. Zhang Xinghai’s shock absorbers have been recognized by a number of manufacturers, including Changan Automobile and Jialing Motorcycle. The products are exported overseas, and a business office has also been established in Vietnam.

The industry of Phoenix Spring Factory is growing, and there are more and more customers for shock absorbers, gradually becoming a leader in China’s segmentation field.

In 2002, Yu’an Group was born.

"Yu" is the abbreviation of Chongqing, which has been divided into independent municipalities. Since Chongqing became a municipality in 1997, its industry has occupied a pivotal position in China. Named after the words "Yu" and "An", it not only means that the company has moved from a township enterprise to a bigger stage, but also means more business exploration in the future.

To some extent, from Baxian township enterprise to Chongqing representative group, it is not only the story of a young man seizing the opportunity of the times, but also the fundamental reason why Sailis was able to "do a line, specialize in a line, become a line", "do a car, specialize in a car, become a popular car".

Yu’an Group soon began a battle for "time".

In the year of the millennium, it is not easy to take the helm of a private enterprise that is not well-off. Chongqing, as an important industrial town in the southwest, is also a famous automobile city. Many companies are entering the vehicle business, and companies that take the train of the times are developing rapidly. Otherwise, if you hesitate, you will quickly fall behind.

Boat against the current, if you don’t advance, you will retreat.

At this time, although Yu’an had entered the field of auto parts supply, under a single business model, the company’s bottleneck was very obvious. "Only making parts, that is relying on others", and entering the whole vehicle became an inevitable choice.

This decision caused an uproar within the company. In the eyes of those who disagreed, automobiles are heavy industry, and if they press the wrong direction, they may fall short. As the absolute leader, Zhang Xinghai has long been dissatisfied with the business of a spring, and finally he still defied public opinion and entered the whole vehicle.

At first, the company chose to enter the motorcycle business. At this time, Chongqing, as the largest motorcycle producer in the country, owns Jialing, Lifan, Zongshen, Wangjiang, Wangjiang Suzuki and other brands. The market saturation competition is fierce, and it is difficult for "novice" Yu’an Group to obtain the market.

Just at this time, Changan Automobile opened up the market with the help of miniature cars, and Dongfeng Automobile began to look for joint ventures across the country to enter related industries. Zhang Xinghai, who sensed the opportunity, immediately decided to cooperate with Dongfeng Automobile, and thus transferred to the automobile track. During this period, Yu’an Group was changed into a more recognizable "well-off stock", echoing the "All People Run for Well-off" in the context of the times.

It was also an opportunity for mutual achievement – Dongfeng Motor, as the economic pillar of Hubei, could not leave Hubei, so it could not join forces with other companies that also shoulder the responsibility of staying in the local area.

In order to promote this cooperation, Xiaokang shares offered enough sincerity and agreed to locate the first phase of the factory in Shiyan, Hubei.

Zhang Xinghai saw it very thoroughly. "The automobile industry has a large investment and a long industrial chain. It cannot be advanced by saying that it can enter. It must have advantages in products, brands, talents and technology. Our joint venture and cooperation with Dongfeng is the integration of the advantages of all parties."

Due to the small reputation of the well-off, even after cooperating with Dongfeng, many people questioned its strength. But Zhang Xinghai did not respond at that time, and it was not until several years later that he publicly stated the situation at that time, "[At that time] I was not optimistic about me, and the more I wanted to do well."

Time gives the answer. In the next 20 years, Dongfeng Xiaokang’s branding impression even far exceeded Dongfeng Fengshen’s own brand.

Figure | On May 13, 2012, Dongfeng Xiaokang 1 million vehicles rolled off the assembly line

With policies such as "cars to the countryside", Dongfeng Xiaokang has firmly captured the market share of mini-cars. In 2009, it ranked among the top three in China’s mini-car industry, with a market share of more than 10% that year.

Dongfeng Xiaokang has become a representative of an era, and its classic bread models have also helped many Chinese small and micro enterprises achieve wealth. Xiaokang shares also listed on class A shares in 2016.

In previous reports, Zhang Xinghai is low-key and simple-looking, and has been called a "sweeping monk".

His actions also reveal that "doing business is not about making more money, but long-term", which is also a portrayal of his entrepreneurship.

In 2016, China regarded the new energy automobile industry as an important pillar industry in the 13th Five-Year Plan. Although the sales of new energy vehicles in that year were 507,000, which was less than a fraction of traditional fuel vehicles, and required huge upfront investment, the market recognition of new energy was not high.

Zhang Xinghai, who saw the future trend, decided to enter the field of new energy vehicles against all odds, and established a new brand "Sailis" to conquer the technology research and development of new energy vehicles.

In order to learn about new energy vehicles, 53-year-old Zhang Xinghai became the first Tesla owner in Chongqing, and also established a research and development institution in the United States to become an innovation pioneer. At one point, he mortgaged 70% of his shares.

These "measures" caused criticism from the industry, and even the company’s share price fell in response. Everyone was really not optimistic about Zhang Xinghai’s decision – at that time, the company did not even have the basic "three electricity" (battery, motor, electronic control) foundation, and there were more than 100 companies competing in the market, and most of the entrepreneurs were young generation.

In comparison, the Cyrus has few "bright spots".

But Zhang Xinghai insisted on his choice. "We are technically poor and afraid, so we must break through the technology blockade." As a witness to China’s economic take-off and the automotive industry, he is all too aware of the humiliating history of domestic traditional manufacturers being suppressed due to technical barriers. Since breaking through the "spring monopoly", he has regarded technology as the core of breaking through.

The layman looks at the facade, the expert looks at the back door.

In January 2019, Xiaokang and Huawei held a comprehensive cooperation signing ceremony. The two sides will further promote cooperation in the field of new energy vehicles and carry out comprehensive cooperation in the fields of industrial Internet, ICT infrastructure, new energy vehicle intelligence, and networking. Subsequently, the two sides jointly launched the AITO series of products, setting a series of industry records.

In 2022, Xiaokang officially renamed itself Cyrus, announcing its full entry into the new energy sector.

If the original cooperation with Dongfeng was for Xiaokang to obtain technical support from the other party, then this cooperation with Huawei shows the profound technical capabilities accumulated in the automotive industry for more than 20 years: such as industry-leading range extension technology, self-developed software and hardware platform technology, and advanced technologies in various fields such as chassis tuning, test platform, and quality control.

In the Sailis Automotive Smart Factory, there are more than 300 intelligent machines in the welding workshop alone to achieve 100% automation of key processes, and some production lines also use laser remote fly welding, which can quickly complete fine welding without contact.

All this was in exchange for Zhang Xinghai’s "smashing pots and selling iron". Even Yu Chengdong admits that Cyrus is "a rare car company that understands the market".

In 2023, Zhang Xinghai and his team traveled to Sichuan and Tibet, covering 2,200 kilometers in 41 hours

In order to pursue the ultimate product experience, in 2023, Zhang Xinghai decided to form a team with his friends as a user and go on a "trip to Sichuan and Tibet" of the Cyrus AITO series and other high-end brand fuel vehicles PK, which finally lasted 41 hours and crossed 2,200 kilometers, all the way to Lhasa.

Through extreme tenacity, Cyrus handed over a satisfactory answer.

Data show that the new AITO M7 jointly developed by Sailis Automobile and Huawei has been continuously breaking records since its launch in September last year, and the cumulative order has exceeded 140,000 units, becoming an industry phenomenon.

In 2023, the highest increase in the share price of Sailis reached 144.81%, ranking among the 100 billion market value, ranking third in the market value of China’s new energy vehicle companies. In addition, since the listing of AITO Q M9 in December 2023, the cumulative value of Dasheng has exceeded 40,000 units.

While Cyrus has achieved success, Zhang Xinghai’s vision is also changing.

"The traditional car manufacturing industry has been monopolized by foreign countries for too long, and the opportunity of new energy vehicles must be seized." At the 2023 two sessions, Zhang Xinghai focused on the transformation and upgrading of China’s automobile industry and high-quality development and gave relevant proposals. He hopes that in the field of new energy vehicles, China can achieve curve overtaking and more excellent enterprises can appear.

Throughout the 38-year entrepreneurial journey, from Phoenix Spring Factory to today’s Sailis Automobile, Zhang Xinghai’s entrepreneurial journey has run through the era of Chinese enterprise development.

Due to its complete experience of this era, Cyrus has become the best example for interpreting an era.

As an important figure in the new forces of car manufacturing, Zhang Xinghai’s introduction cannot be limited to the single dimension of the founder of the car company. As a witness to the 38-year cycle and the changes of Chinese car companies, Zhang Xinghai’s direction has not changed since the 1980s when he broke through the "spring monopoly".

On February 5th, the Sailis Automotive Super Factory held a completion and commissioning event in Chongqing and delivered the first batch of M9 owners.

In Zhang Xinghai’s words, "Cyrus Auto Super Factory is not only the benchmark of Cyrus and Chongqing, but also the benchmark factory in the world!" It is worth mentioning that in the top ten list of luxury brands in the Chinese market in January this year, Cyrus ranked among the top five, second only to traditional luxury car brands BBA and Tesla.

All of this is due to Zhang Xinghai’s initial persistence and Sailis’s adherence to the tenet of "user-centered, wholeheartedly serving users". The AITO Qinjie M9 is now not only the high-end of Sailis, the high-end of Chongqing, but also the high-end model of the world.

It can be predicted that for Zhang Xinghai, Cyrus will not be his end. The industry is developing vigorously, and he will always move forward.

Original title: "The Running Era of Zhang Xinghai and Cyrus"

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