2003: Starting with Foreign Trade

Chapter 296 The Butterfly Effect
"He's taken another one! Is this how you play the game? Just a direct acquisition?"

Dong Jinggui stared at the newspaper with mixed feelings. Yadi had spent a lot of money and more than a year to build the motor factory, but it was still not fully completed.

However, it was easily obtained by Tan Jincheng through this method.

"You know what, this method is pretty good. We at Xinri don't have our own motor factory. By using this method to acquire one of our suppliers, the supply of parts becomes much more secure."

Zhang Congxun, who was also staring at the newspaper, said happily.

Their two businesses are just across the street from each other. The two bosses often drink tea together when they have nothing to do, and they met again today.

Neither Zhang Congxun nor Dong Jinggui had a high level of education, and neither company reached the level of later generations. They were both in the early stages of development, and the traditional entrepreneurial mindset limited their imagination.

But they understood this model immediately. It was simply a matter of investing in the supplier's company, taking control of the other party's company, and making the supply of parts more secure.

It's like a thin layer of paper; no one had broken through it before, but once it was, it wasn't anything special anymore.

Tan Jincheng's actions have unintentionally created a ripple effect in the electric vehicle industry, and leading companies will inevitably have to frequently use this model for core components in the future.

Whether this is a good thing or a bad thing is unclear at the moment.

"Hey, I heard from the rumors that two engineers from your R&D department were poached by Xiao Tan, and I also heard you're furious about it?" Zhang Congxun put down his newspaper and poured Dong Jinggui another cup of tea.

"Where did you hear this rumor? Their contracts just expired and they didn't renew them. As for going to work for Xiao Tan, everyone has their own ambitions." Dong Jinggui, of course, wouldn't admit it.

However, I still regret bringing Tan Jincheng to visit the R&D department.

“How about we try to find some opportunities with him? Let’s start by digging into Bafang Electric, which he recently acquired.” Zhang Congxun didn’t care whether Dong Jinggui admitted it or not.

Yadi and Flash have both developed their own motors, and Xinri also wants to launch this project. Acquisition is a contingency plan, but Zhang Congxun actually prefers to build his own factory like Yadi.

There's no other reason than that building your own factory gives you a greater sense of accomplishment. Building a factory in another location is also a good opportunity to cultivate good relationships. In addition, the entire factory belongs to you, unlike Tan Jincheng who only owns 51% of the shares, which might lead to conflicts in the future.

If you're going to make an acquisition, it has to be a full acquisition. However, Zhang Congxun prefers to build a factory. His company has moved from the capital to Jiangsu Province and is now so large. People back home are starting to have something to say about it.

Building a factory back in my hometown would also be a good idea to mend relationships.

His hometown is not like Dong Jinggui's or Tan Jincheng's hometowns; Wencheng is also a developed area.

"I advise you to save your energy. They're not just R&D staff; all the important people in the company have signed non-compete agreements," Dong Jinggui said, pursing her lips.

Anyway, it's just a rumor. Why should I admit to a rumor? But it's also the fault of the HR staff for being careless. Those two engineers' contracts were indeed about to expire, and they didn't contact them to renew them in time.

"Holy crap! That's ruthless? How much money did that cost? This kid is really willing to spend it." Zhang Congxun exclaimed in disbelief.

A non-compete agreement is not something you can just sign and be done with. If you just randomly sign a non-compete agreement, that's it; it has no legal responsibility. If you sign one, you must provide corresponding benefits.

Then Zhang Congxun, still unwilling to give up, said, "His factory, which he just bought, shouldn't have this kind of thing, right?"

"What do you think is the reason he stayed in Suzhou?" Dong Jinggui asked with a smile.

"Let me tell you the truth. I have a friend there. Although Bafang Electric has only been established for three years, I've heard that they are quite capable. The motors in the Flashcars are also quite stable, all thanks to them. Right after they signed the contract, my friend wanted to take advantage of the uncertainty and poach a few people from them. Guess what?"

"What's wrong?"

"The first thing Xiao Tan did after taking over was to provide social security for all employees, plus a 15% salary increase for all staff. Do you still think he would forget about these things when it comes to R&D personnel?"

Zhang Congxun was speechless for a long time before saying, "This kid is just like a capitalist. He tries to win people over with money right from the start."

"That's right! He quoted 2.4 million to that company that was only established three years ago. I heard that the other motor suppliers for Flash are regretting it to death. Why didn't it be them!"

Zhang Congxun was speechless again. This was truly a capitalist. Flash's operating method was quite similar to the old internet model. But where did he get so much money?
"If things continue like this, an industry reshuffle might come sooner than expected," Zhang Congxun sighed.

Since the beginning of this year, new electric vehicle manufacturers have been established one after another. Just two days ago, another electric vehicle manufacturer was added in Laiwu, Shandong Province, investing 1200 million yuan to build an electric vehicle factory with an annual production capacity of 10 vehicles.

In addition, Yamaha has also announced that it will produce electric vehicles, and the previously secret site selection by Zongshen has also been confirmed.

Manufacturers and individuals of all sizes have entered the electric vehicle industry, leading to a surge in sales and intensifying competition. The market competition in electric vehicles will undoubtedly be fierce starting in the second half of next year, even before next year's official launch. All of this is driven by the industry's own development, but also by the ripple effect brought about by Tan Jincheng.

In its original history, Xinri was the first electric vehicle manufacturer to hire a celebrity spokesperson, also named Brother Long. However, it was not until December 2006 that Xinri made this move, which propelled it to the top spot in domestic electric vehicle sales.

Since then, the idea that "the spokesperson is the core technology of electric vehicles" has become a famous saying in the industry.

Following suit, other manufacturers followed suit. The Bidevin electric vehicle mentioned earlier was just a small manufacturer that disappeared after only a few years of success. However, its success was due to its massive spending and signing Andy Lau as its spokesperson.

The spokesperson remains a core technology in the electric vehicle industry in this life, but Tan Jincheng was brought forward by a year and a half. At that time, the spokesperson was the most popular Super Girl champion, connecting with a hot business.

With the help of internet marketing, its influence has surpassed that of the previous company, Chip Day, which signed Long Ge.

Now Tan Jincheng is using capital acquisitions to enrich his industrial chain. Although Zhang Congxun and Dong Jinggui don't know it's a butterfly effect, they have a deep sense of crisis based on their years of business experience.

Zhang Congxun, in particular, couldn't understand why Xinri, which had the best situation and the most potential last year and dominated the national high-end electric vehicle market, seemed to have its luck stolen when it encountered Shanchi.

It seemed as if he could predict every step I would take.

Did he really tell Tan Jincheng that the spokesperson for Xinri was Brother Long? That's pure nonsense. There are plenty of international superstars out there, why is it Brother Long?

But Tan Jincheng seemed to know all along. Although he wanted to sign autographs, take photos, and show his support at the signing ceremony, looking back now, Tan Jincheng didn't seem surprised at all.

This is really strange. Could there be a mole in the company?

"We definitely need to go high-end, but the foundation of our domestic brands at the beginning must be based on the common people, or on low prices, so that the common people can afford them. That is the purpose of our establishment of enterprises and production of products."
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In Suzhou, Tan Jincheng and Wang Qinghua were also chatting.

Wang Qinghua asked Tan Jincheng about the development trend of the electric vehicle industry. He had been watching the news these past few days and saw that various places were making significant moves.

Fortunately, Bafang Electric was featured in these news reports, finally giving the company some exposure to its peers nationwide.

Overall, the assessment is quite positive, with the industry defining the strategic cooperation between Bafang Electric and Flash Technology as a "powerful alliance."

However, as the two chatted, the conversation veered off-topic and turned to the topic of product localization.

"So, Mr. Tan, when you look at leading companies, you are more optimistic about Yadi's development than the current sales leader, Xinri?"

"Yes, ChipRi's foundation is not as solid as Yadi's. In addition, Yadi pays great attention to product quality, which is also the goal we at FlashDrive are learning from. The products we sell to the public must not only be cheap, but also of good quality."

Tan Jincheng never thought that creating a high-end brand was particularly prestigious. While the industry chain does need high-end products to enhance the brand's image and influence, ultimately, you are selling consumer goods.

Consumer goods should be affordable for most people; that's the best way to achieve domestic production.

Currently, domestic home appliance companies are doing quite well. From being monopolized by foreign brands in the last century, with product prices remaining high, to achieving technological breakthroughs and localization, home appliances are now affordable for everyone.

This is the greatest significance of domestic production.

"Using a simple, and not particularly appropriate, example, Mr. Wang should understand what a good product is," Tan Jincheng said with a smile.

"Oh, what kind of example?" Wang Qinghua asked.

"It's about the bride price. Back in Mr. Wang's generation, or your parents' generation, the bride price was usually something like the 'three big items,' such as a bicycle and a television, right?"

Wang Qinghua nodded: "Yes, that's right."

"Do you see anyone still using these now? No, but electric vehicles are currently being used as betrothal gifts in some areas. Our goal is to remove electric vehicles from the betrothal gift category."

The example of betrothal gifts isn't entirely accurate, but it does reflect the fact that with industrialization, domestic production, and the improvement of people's living standards, the items given as part of the dowry are gradually being upgraded.

The products that are replaced will become products that ordinary people can easily afford, which can be considered a kind of social progress.

"Mr. Tan's example is very interesting and vivid; that's right, only things that are not easily priced up will be included in the dowry."

Wang Qinghua stared at Tan Jincheng somewhat rudely as she spoke.

How does this boss's brain work? He always seems to be able to see changes in the smallest details. Is he really that perceptive?
(End of this chapter)