2003: Starting with Foreign Trade

Chapter 628 Yangtze Motors Catches a Good Time
"Yuechi must have a 1.6L model, otherwise how would it sell?"

The automotive industry revitalization plan approved at the State Council executive meeting on January 14th includes a section on vehicle purchase tax, which stipulates that passenger vehicles with engine displacements of 1.6 liters and below will receive purchase tax incentives.

In fact, Tan Jincheng already knew about this news, so how could he not design a 1.6-liter model?

A rough calculation shows that consumers can save around 3000 yuan on cars with engines between 1.3 liters and 1.6 liters. In addition, the rural car purchase subsidy policy implemented on March 1 this year will also greatly stimulate the car market.

If the 2008 Olympics was a turning point for national self-confidence, then the 2009 car market was one of the economic turning points.

A series of market rescue policies and the predicament of European and American car companies have led to a shift in our offensive and defensive strategies. Currently, Geely is acquiring Volvo, while General Motors is facing bankruptcy.

BYD F3 sold very well in the first quarter, with almost 2 units sold every month. Other car companies' small-displacement models also sold very well, such as the Zhongtai 2008, which seemed to have been rejuvenated.

The "cars to the countryside" policy, like the "home appliances to the countryside" policy, is a powerful weapon. According to relevant data, approximately 130 million microcars were sold in 2008, with about 30 sold in the first quarter.

However, in the first quarter of this year, more than 45 microcars were sold nationwide, an increase of 1.5 times. According to the data, it is predicted that microcars alone will sell 200 million units this year, an increase of about 70 units.

Perhaps I was reborn too late, or maybe I was born a year or two earlier. If I had been born earlier, I could have made a quick buck in 2009.

The car market in 08 and 09 was like the electric two-wheeler market; all kinds of brands were available. Anyone who could produce a decent car could make some money. For example, the Chevrolet Cruze, which sells very well now, can no longer be seen on the streets in later years.

Most Japanese cars have small engine displacements, and with small displacement cars selling so well this year, Mitsubishi must be really worried. Otherwise, given the economic crisis, they, who are usually very conservative, wouldn't have dared to invest so heavily.

It's simply that European and American automakers are currently preoccupied with their own problems, making this their best opportunity to seize market share.

On March 23, Tan Jincheng and his entourage, having concluded their trip to Changzhou, appeared in Xiangcheng once again.

Li Jianxin was very satisfied with the offer of 1.5 million yuan, payable in three installments, for the complete transfer of all assets formerly under the Changfeng Group within Yongzhou.

Overjoyed, Li Jianxin personally appeared at the airport to pick up Tan Jincheng.

Li Jianxin believed that the assets in Yongzhou were definitely worth more than 1.5 million yuan. Tan Jincheng was a troublesome burden, but Li Jianxin saw it differently. He had great prestige in Yongzhou, and no worker dared to cause trouble for him.

In addition, Yongzhou also hopes that Li Jianxin will return to where Changfeng started. Without Yongzhou's businesses, Li Jianxin will have to work in Jingmen for a long time to come.

It looks like a company from Hunan Province, but it seems more like a company from Hubei Province.

As for Tan Jincheng's Flash Group, everyone could see that he had no intention of making large-scale investments in Hunan Province. Logically speaking, expanding and renovating the joint venture factory with Mitsubishi in Xiangcheng would have been the best option, but he did not do so.

It was obvious that they still distrusted Xiangcheng, a fact that Li Jianxin and others were well aware of.

The experiences of a certain heavy industry enterprise and a certain dairy company have indeed made private enterprises very wary, and no large private enterprise dares to put all its assets into this.

Li Jianxin believes that Tan Jincheng's desire to divest his assets in Yongzhou may not be entirely without consideration; of course, from a personal perspective, he can understand it.

He wouldn't dare either.

"President Tan is doing very well lately, his net worth has increased significantly."

Similar to Cheng Linfeng's prediction, FlashTech's stock price surged to a limit up after its annual report, reaching a high of 15.99 yuan before entering a period of adjustment.

However, this adjustment is positive, maintaining the trend of a long positive candle without breaking the previous high, and the market value has remained within the range of 78 billion to 80 billion yuan for several trading days.

In addition, after the Nasdaq experienced a double bottom in early March, it has rebounded strongly recently, with the index alone rising by more than 17%. Orange Technology's stock price has rebounded by more than 25%, returning to above $14.

This price is already close to the share price on the first day of listing. If it weren't for the exchange rate fluctuations, Orange Technology would have a market value of tens of billions.

With the two listed companies rising in tandem, Tan Jincheng's personal wealth and that of his family have increased rapidly, making his net worth of tens of billions a foregone conclusion.

The collaboration with Mitsubishi has also generated considerable buzz, becoming a key project on par with the integration of Hafei, Changhe, and Dong'an Dongfeng by AVIC. Despite not owning a single car brand, Weilai Auto and its founder have frequently appeared in the media, generating so much buzz that other automakers are extremely envious.

These are all free advertising resources. Weilai Auto seized this opportunity and rebuilt the sales network of Yangzi Pickup. With the support of a series of policy incentives and its own discounts, it broke its own monthly sales record.

With 1227 units sold in February, Yangzi Automobile ranked sixth in monthly sales among the 11 registered pickup truck brands, following Great Wall, Nissan, Zhongxing, Jiangling, and Foton.

"I've been incredibly busy. I should have met with Mr. Li much earlier. I'm truly sorry."

"Haha, it's good to be busy. It's not a good thing for young people to be too idle. It's an old man like me who should rest earlier."

"Not at all, Mr. Li, you are still going strong. We younger generation still need to learn from you and are counting on you to help us improve." Although Changfeng Motors has declined, Li Jianxin's status in the automotive industry is still quite high. His personal visit to pick up Tan Jincheng is a great honor.

Tan Jincheng must also show respect to the other party.

Li Jianxin felt quite good having a newly minted billionaire, whose success rivaled that of the CEO of BYD, whose sales had surged. He felt the trip was worthwhile.

Of course, the most important thing was that Tan Jincheng made huge concessions on the assets in Yongzhou, which made him feel that he should personally come to welcome him. While selling Changfeng Motors, Li Jianxin did not not think about buying it back in the future, still holding the same idea as when he sold Yangzi Motors.

But now it seems unlikely. That kid is too shrewd. He's transferred most of his assets away, or he's simply given them up. He even poached Mitsubishi. Even if he buys it back in the future, it seems pointless.

Most importantly, this guy has spun off the listed company's assets and then controlled them through layers of investment companies, making it incredibly difficult to buy them back in the future.

Li Jianxin has now given up on the idea of ​​buying back the Xiangcheng manufacturing base and Yangzi Automobile; he just wants a place to retire.

Yongzhou is undoubtedly the best place, and Tan Jincheng's price reduction shows him enough respect.

The three-phase payment plan also alleviated the financial pressure on Changfeng Motors.

"Yangtze Motors has surged to sixth place in sales, that's pretty good! I just wonder when your own brand will be launched?"

Li Jianxin patted Tan Jincheng on the shoulder like an elder.

This is not disrespect, but rather a form of affirmation. As an entrepreneur, no one wants to see the company they sell go bankrupt or be poorly managed.

The company is like one's own child. Even if it is sold, one hopes that it will continue to grow and improve. This is fundamentally different from the capitalists in the internet industry.

"We were fortunate to have the support of favorable policies; otherwise, we wouldn't have achieved this result. Although sales have increased, we haven't actually made much money."

Yangzi Pickup has actively responded to the "Automobiles to the Countryside" policy in Anhui, Henan, Zhejiang and other provinces. Since the acquisition last year, it has been preparing for this and plans to invest nearly 100 million yuan in the construction of second- and third-tier sales and service outlets.

Adhering to the consistent value-for-money philosophy of Flash, Yangzi Pickup is offering discounts of up to 5000 yuan across its entire product line through policy support and its own subsidies.

In addition, this offer will last for a year, until December 31, 2009.

"Haha, making money isn't the priority right now. Boosting sales and brand awareness is what really matters."

Li Jianxin also knew that Yangzi Motors probably didn't make much money. Not only did it invest heavily in upgrading its sales and service network in the early stages, but after a series of price reductions and promotions, the lowest price for the Yangzi pickup diesel series was 5.98 yuan, and the gasoline series was only 4.7 yuan.

Both prices are the lowest in the industry. While they have unleashed potential consumption and fueled a car-buying frenzy, the profit margins are also predictable.

"That's true. I hope Yangzi Automobile can sell 2 vehicles this year," Tan Jincheng said with some anticipation.

Based on the current production costs of Yangzi Automobile, selling 1.5 vehicles within a year would break even, while selling less than 1.5 vehicles would result in a loss. If they can sell 2 vehicles, then Tan Jincheng would dare to continue playing the price war next year.

They even expanded their production lines.

Great Wall Motors remains the leader in the pickup truck market, with its 28% market share being virtually unshakeable.

For Yangzi Pickup, Tan Jincheng doesn't have any particular ambitions. Among the 11 registered brands, he just wants to maintain his sixth position and make a profit.

Great Wall Motors is a role model for Weilai Motors. Both came from humble beginnings, and Great Wall Motors' status and investment environment were even worse than Weilai's. Yet, Great Wall Motors was able to achieve growth against the market trend last year.

With an average selling price of 5.91 yuan and an average profit of 5100 yuan per vehicle, this is quite remarkable for domestic car manufacturers with lagging technology.

Yangzi Automobile's sales target for this year is 2 vehicles, with sales expected to be between 9.4 million and 11.96 billion yuan. The huge investment will certainly not achieve a profit of 5000 yuan per vehicle.

However, if this sales target can be achieved, Yangzi Automobile's profit this year will exceed 5000 million yuan. The acquisition can bring profits to the company in the first year, so this deal is worthwhile no matter how you look at it.

Prioritize market share before focusing on profits; this applies to any industry. When the time is right, seize the opportunity.

To be honest, Li Jianxin, or rather Changfeng Group, is quite unlucky. There are plenty of car companies with poor car quality, but it is only him who has a bad reputation, can't sell cars, and it has even almost affected his core business.

Then it collapsed at the darkest moment before the arrival of good policies, but survived the 2008 crisis. Would things be different then?

Participating in it seems to make one understand better that the tides of the times don't give people a chance to react, even large enterprises seem to be the same. The only difference between them and ordinary people is that they have a slightly stronger ability to withstand pressure.

(End of this chapter)