In Hong Kong, we build a global business empire

Ma Shimin took the documents and carefully read through them page by page.

The office fell silent, save for the rustling of papers turning.

Lin Haoran picked up his teacup and sipped slowly, while Cui Zilong sat quietly, waiting for Ma Shimin's opinion.

About five or six minutes later, Ma Shimin closed the folder, looked up, and looked at Lin Haoran.

"Boss, what is your purpose in acquiring the car brand? Or what are the conditions for acquiring the car brand?" Ma Shimin was not in a hurry to give his opinion, but instead raised his question.

"Ideally, we should be able to turn a profit as soon as possible. Secondly, it would be best if we had a wide audience and a large global influence. After the acquisition, I hope we can open a branch factory in mainland China!" Lin Haoran said after thinking for a while.

"Then, the second Italian Alfa Romeo and the fourth German Porsche can be eliminated."

For example, Alfa Romeo, despite its considerable brand recognition, has dismal sales, consistently selling only tens of thousands of vehicles annually, even less than the sales of MINI, a brand under the Rover Group.

Porsche has a similar problem to Alfa Romeo, namely, that it is too small.

Although Porsche's brand influence far surpasses that of Alfa Romeo, it is a niche brand focused on sports cars, with global sales of less than 40,000 units last year, even fewer than Alfa Romeo.

Moreover, Porsche's model positioning determines its high price and limited target audience. Even if it is acquired and put into production in mainland China, it will be difficult to form a large-scale mass production advantage.

For a brand with annual sales of tens of thousands of units, turning a profit quickly is extremely difficult, especially since the headquarters factory can't even sell its output, let alone open branch factories.

Lin Haoran nodded.

Both Alfa Romeo and Porsche are indeed internationally renowned brands with a significant influence in the high-end market, but their shortcomings are also very obvious: they are too niche!

No matter the era, the wealthy are always a minority.

Porsche and Alfa Romeo's customer base has always been limited to a small group of people who pursue driving pleasure and are willing to pay for brand premium.

This positioning limits their sales volume; even with a strong brand influence, they cannot produce millions of units annually like Volkswagen and Toyota.

What Lin Haoran needs is a brand with both brand influence and sufficient scale to support large-scale production and to open branch factories in mainland China.

Porsche and Alfa Romeo's "small and beautiful" approach is completely out of step with his strategic goals.

He knew that Porsche had indeed done well in the 21st century, transforming itself from a niche sports car brand into a high-profit luxury brand with annual sales of over 300,000 units thanks to its Cayenne and Macan SUVs.

But that happened in the late 1990s and early 21st century, and it required a specific market environment, product strategy, and time to accumulate experience.

It was only 1983, and Porsche was still struggling to survive; its SUV era was far from over.

He can't wait twenty years for Porsche to successfully transform itself before reaping the rewards.

"Jaguar and Land Rover are in a similar situation to Porsche and Alfa Romeo. Their sales are also very poor, with most brands selling only tens of thousands of units per year. Their advantage might be that if you want to acquire them, the cost will be lower and the cost-effectiveness will be higher."

However, high cost-performance does not necessarily mean it suits your strategic goals. Jaguar and Land Rover are too small in scale, and even if the acquisition price is low, they cannot support the long-term plan of opening branch factories and large-scale mass production in mainland China.

Moreover, the positioning of these two brands dictates that their products cannot be sold in large quantities; even if production were carried out in mainland China, it would be difficult to achieve economies of scale in a short period of time.

Lin Haoran nodded. Ma Shimin's analysis was logical and well-organized.

While Jaguar and Land Rover are attractive in terms of price, they are too small to carry the strategic value he desires. When acquiring a brand, one cannot only look at the price; one must also consider its future growth potential and strategic synergy.

Ma Shimin continued, "As for the Rover Group, although the data shows that the group's total car sales reached 37.2 units last year, this is actually the total sales of the group's brands such as Rover, Austin, MG, MINI, Morris, and Triumph. The sales of each brand are actually in the thousands to tens of thousands of units."

"Boss, this is very important. We can't be misled by the group's total sales volume; we need to clearly see the individual market performance and vitality of each brand."

Lin Haoran was actually quite unfamiliar with the Rover brand.

In later generations, this brand should have disappeared, but its MG and MINI brands are still active in the global automobile market in the 21st century.

After being acquired by a mainland Chinese company, MG transformed into a brand that focuses on youthfulness and sportiness, achieving good sales in the Chinese market.

MINI, on the other hand, was acquired by BMW. While retaining the classic British design, it incorporated German engineering quality, becoming one of the world's most successful boutique small car brands.

This means that the true value of the Rover Group lies not in the Rover main brand itself, but in its sub-brands, especially MG and MINI.

Both of these brands have proven in later generations to have the potential to survive and develop independently.

For example, MG, the British car brand acquired by China Fortune Land Development, will sell 72.8 vehicles globally in 2025, with most of the sales coming from overseas markets rather than the domestic market.

This demonstrates that the MG brand inherently possesses international characteristics; it does not rely on a single market but is able to gain recognition in multiple regions around the world.

This "global adaptability" is an extremely valuable asset for an acquired brand.

The success of MINI in later generations is undeniable.

After being acquired by BMW, MINI transformed from a near-extinct British small car brand into a global synonym for premium small cars, with annual sales consistently exceeding 300,000 units and brand premium far surpassing other models in its class.

Its success proves that "cultural identity" and "design language" are core competencies in themselves. With enough funding and the right strategy, a brand can be revitalized.

The Rover main brand, however, was eventually eliminated by the market due to its unclear positioning, outdated products, and lack of distinctive features.

Of course, only Lin Haoran, as a time traveler, could have such a perspective; Ma Shimin certainly couldn't possibly have this understanding.

From Ma Shimin's perspective, Rover Group is a long-established British car company that is currently losing money. Although its brands have a certain historical background, its overall business situation is worrying.

He couldn't foresee the glory of MG and MINI in later generations, nor could he foresee the eventual demise of the Rover main brand.

He can only make rational judgments based on the current data and information.

"As for Chrysler, it meets your requirements very well, boss. It has annual sales of nearly one million vehicles, a large enough scale, a complete product line, and a dealer network covering the entire United States."

However, there is a problem. As the third-largest automaker in the United States, it brings a huge number of jobs to the country and is one of the important symbols of American industry. The US government will not allow foreign capital to hold a controlling stake in a company of this level. Even if we are willing to pay a high price, Congress can block the deal in the name of national security or industrial protection.

Moreover, although Chrysler has returned to profitability, its profit base is very fragile, relying mainly on government-guaranteed loans and the short-term success of the Model K. It could fall into trouble again at any time if the economy fluctuates or the market changes.

Acquiring a brand that could go bankrupt again at any time is too risky.

After hearing Ma Shimin's opinion, Lin Haoran couldn't help but smile and said, "Mr. Ma, according to you, doesn't that mean there isn't a single brand suitable for acquisition?" Lin Haoran's words were somewhat joking, but Ma Shimin didn't laugh; instead, he shook his head seriously.

"Boss, it's not that there aren't suitable brands to acquire, but that perfect brands don't exist. Every brand has its own problems. Small brands can't sell in large quantities, large brands have high political risks, good brands are expensive, and cheap brands have an aging image."

What we need to do is not find a brand without flaws, but a brand whose flaws we can accept and whose strengths we can utilize.

Ma Shimin paused for a moment, then continued, "Although Rover has problems such as an aging brand image and low sales volume of a single brand, its advantages are equally prominent: reasonable prices, a complete technology system, sufficient production capacity, and potential for a brand portfolio."

These problems can be solved through funding and strategy, but Chrysler's political risks, Porsche's price threshold, and Alfa Romeo's size limitations are problems that cannot be solved through funding and strategy.

Therefore, my conclusion is that Rover is the most suitable choice for you at present. After purchasing it, you will gain access to multiple major international car brands.

Boss, you should select the most promising brand to focus on developing and concentrate resources, instead of spreading resources across more than thirty brands like Leyland Group, where each brand is underutilized and unable to grow.

The biggest problem for the Rover Group is not that the brand is bad, but that the management made strategic mistakes. They tried to maintain the operation of multiple brands at the same time, which led to the spread of R&D expenses, the dispersion of marketing resources, and the underutilization of production lines, ultimately resulting in each brand lacking competitiveness.

"If we can streamline the brand portfolio, concentrate resources, and focus on core products after the acquisition, it's entirely possible to turn a profit."

After listening to Ma Shimin's opinion, Lin Haoran couldn't help but ponder it.

Ma Shimin truly lives up to his reputation as a forward-thinking top-tier professional manager. His analysis is logically clear and well-organized. He not only pointed out the problems of the Rover Group but also provided specific solutions, such as streamlining the brand, concentrating resources, and focusing on core products.

But Lin Haoran also knew that running a car brand was not as simple as just talking about it on paper.

The British automobile industry began its decline in the 1960s and 70s due to a multitude of problems.

It's not just a matter of strategic missteps by management; the deeper problem lies in the overall industrial environment in the UK: overly powerful unions, tense labor relations, low productivity, poor product quality control, and lagging technological innovation.

These problems cannot be solved simply by changing the management team; they require a systemic reform.

Before Lin Haoran could speak, Ma Shimin continued, "Boss, if you just want a car group with huge global sales and the ability to set up factories in mainland China, there's absolutely no need to buy these heavily loss-making car brands. To be honest, even others are finding it difficult to turn a profit, let alone us outsiders."

I think you could invest in top-selling global car brands like Volkswagen, Toyota, Ford, and Nissan. You don't need a full acquisition or controlling stake; you just need some say in the business.

Most importantly, these car brands are all profitable, have healthy cash flow, and stable operations. You, as the owner, don't need to clean up messes, face the threat of union strikes, or worry about outdated technology or aging products.

Boss, you can absolutely become a major shareholder and obtain the exclusive agency rights and joint venture production rights for the Asia-Pacific region, and even promote them to set up joint venture factories in mainland China.

In this way, you don't need to bear business risks, deal with labor union struggles, or handle outdated technology. You only need to leverage your shareholder status to access the resources and channels of these brands to achieve your strategic goal of opening branch factories in mainland China.

Ma Shimin then stopped speaking.

Clearly, the other party has already given his opinion, and the decision-making power naturally rests with Lin Haoran, the boss. Ma Shimin cannot make the decision for Lin Haoran.

Lin Haoran couldn't help but fall into deep thought.

In fact, he understood very well that investing in a top global automotive group was the most rational choice.

Companies like Volkswagen and Toyota are currently among the top five in global sales, and decades from now, they will still be among the top five, or even the top three!

These brands' operational capabilities and market position have stood the test of time and are truly high-quality assets that can withstand the test of time.

Investing in such a company is essentially like boarding a fast train of continuous growth, with low risk, stable returns, and a certain long-term prospect.

Acquiring a loss-making automotive group carries too much uncertainty for the future.

Ma Shimin makes a lot of sense. The automotive industry is too complex, and the risks and difficulties of fully acquiring a loss-making brand are indeed much greater than investing in a mature brand.

The complexity of the automotive industry far exceeds that of any industry he had previously worked in, encompassing supply chain management, quality control, R&D systems, dealer networks, labor union relations, technological iterations, and more.

Every step could become a deadly trap.

By investing in giants like Volkswagen and Toyota, he can obtain the greatest strategic benefits with minimal cost and risk.

He doesn't need to worry about operations, deal with labor unions, or deal with outdated technology; he can achieve his goals simply by promoting cooperation as a shareholder.

However, he is not short of money now, and acquiring a car brand that is entirely his own would indeed give him greater autonomy and more room for long-term development.

Owning a brand outright means that one can formulate strategies, adjust product lines, and decide on production layouts entirely according to their own wishes, without having to consider anyone else's opinions.

This kind of autonomy is something that giants like Volkswagen and Toyota cannot obtain by investing in them.

However, there is no need for those loss-making car groups to set up factories in mainland China, because sales are too low and the production of their headquarters factories is already excessive!
Even if sales surge in the future, that future is still uncertain.

It's a really tough situation.

On one hand, there is the safe path of investing in established brands; on the other hand, there is the independent path of acquiring loss-making brands outright.

Both paths have their advantages and disadvantages, risks and rewards.

Lin Haoran picked up his teacup, took a slow sip, and looked through the round glass window at the setting sun.

He suddenly felt like he was in a dead end.

Why choose? There's absolutely no need!
He is not short of money now, and these two paths are not actually contradictory!

He could have taken the equity investment route first, built a joint venture factory, established a car production base in mainland China, and built up a team and supply chain. In this way, he could both make money by relying on these large car groups and provide assistance to mainland China.

At the same time, he could take advantage of the current decline of the British car industry to acquire some car brands at relatively low prices. After all, this is the period when their valuations are at their lowest. Even if he does not turn a profit after the acquisition, he will not lose too much, since the acquisition price is what it is.

As long as the brands themselves retain their value—their technology systems, R&D teams, brand assets, and global dealer networks—these things have inherent value.

Even if the business is poorly managed, the brand can be split up and sold in the future, or the technology platform can be licensed to other manufacturers.

Even in the worst-case scenario, you won't lose everything.

Having figured this out, Lin Haoran no longer had any hesitation.

He'll pursue the path of investing in leading automakers, and he'll also pursue the complete acquisition of automotive brands! (End of Chapter)