For the first time since Freeman Shen founded WM Motor Technologies, Inc. in Shanghai a year ago, he agreed to accept a media interview to discuss about his startup company.
Shen has been running back and forth between Europe, the U.S. and China to look for partners and build his automotive team.
WM, according to Shen, comes from the German word “Weltmeister” or “world champion.” The core idea of WM Motor is connectivity: the connections between man and car, car and cloud, and car and car. In addition to an R&D and design team, WM has also recruited potential customers to participate in the design process.
Shen says WM’s strategy is to “utilize German vehicle R&D and manufacturing, Silicon Valley software and the cloud system, and China’s supply chain and production facilities.”
WM Motor is not different from other startups in terms of car design. Shen believes the biggest obstacle for any startup carmaker aimed at mass production is execution.
“It is not difficult to build an exotic car capable of reaching 100 km/h within five seconds and has a 500 km driving range. It is however difficult to build 100,000 units of this vehicle annually with reliable quality.”
Targeting mass production, Shen claims he has been working on resolving a number of issues involving manufacturing, supply chain management, HR, funding and vehicle license.
WM Motor has already started building its plant, according to Shen. It will be a smart, industry 4.0 level facility, equipped with leading automation and information systems. It will also be a zero emissions factory.
Outsourcing and having one’s own assembly plant are two equally feasible solutions to a startup carmaker. But Shen believes in the long run, outsourcing will not be sufficient if production reaches a certain level. In addition, top manufacturing facilities such as the BMW Tiexi plant, Volvo Chengdu plant and Cadillac Shanghai plant will not make cars for newcomers.
Shen said the smart manufacturing C2M (Customer to Manufactory) plan will be WM Motor’s biggest advantage. The production processes are connected by the internet. Car buyers can customize their desired models to be made in the factory. “The end-consumer driven manufacturing model will be revolutionary and not many current OEMs have been able to do so,” Shen said.
On the supply chain side, Shen’s previous experience as BorgWarner China president gives WM Motor an edge. Many of his old colleagues and partners at the time now are in senior management positions in major OEMs or suppliers. “They at least are willing to listen to me and my ideas,” he said.
Shen thinks the most difficult part of making cars is supply chain management, where 70-80 percent of the vehicle value is derived. “If major suppliers do not play well with you, you are done with making cars,” Shen said. WM Motor has reportedly signed contracts with major parts suppliers.
On HR side, Shen believes it is critical for the company to have a proper talent structure. “Like playing soccer, you need a couple of stars to lead the team. If everyone is a star, it becomes hard to manage,” he said. The ability to manage and motivate people can be more important sometimes than finding the right people.
Currently, WM Motor has around 200 employees located in Shanghai and Germany, and are mainly consisted of his old colleagues from BorgWarner, Fiat, Volvo and Geely. This team is largely responsible for the Pateo’s concept car Project N introduced in the 2015 Shanghai Auto Show.
On the funding side, Shen reveals that WM Motor is well financed. It usually costs ¥5-¥10 billion ($750-$1.5 billion) to launch a new vehicle project. Shen reportedly had $1 billion to start the WM Motor.
Vehicle license is a sensitive topic for startup carmakers because it involves political wrangling behind the scenes. Shen said he is confident because he has learned about the application process while working at Fiat and Volvo. “If I cannot get it, neither can others,” he said.
(Translated by Kevin Wang based on author’s original article published on cheyun.com)