Returning wealthy individuals develop their hometowns and become rich in the 1980s

Chen Zaisheng took the document and looked at the technology authorization letter from Shanghai Automotive Volkswagen. Shanghai Automotive Volkswagen hoped that Xiaochi Automobile Company could authorize Shanghai Automotive Volkswagen with technologies such as multi-point electronic fuel injection and high-pressure common rail electronic fuel injection for a period of five years.

The authorization is limited to models produced by Shanghai Automotive Volkswagen in China, with a fixed annual authorization fee of 500,000 yuan. After reading the document, Chen Zaisheng closed it and put it aside. He then picked up the tea that Chen Dong had brewed for him, drank it, and looked at Chen Dong.

"Director Fan, Mr. Thorne, do you know how much cost we at Xiaochi Auto have invested in developing these technologies you mentioned?"

Faced with Chen Dong's question, Thorne pursed his lips and remained silent, while Fan Guotao shook his head directly, "In America's laboratory, thirty-two engineers spent three years and burned through tens of millions of US dollars in research and development funds to obtain the technologies you see now."

"Right now, there are no more than five companies in the world that can master these technologies, and some of them are even exclusive to our Xiaochi Motors. A licensing fee of 500,000 yuan a year, haha," Chen Dong laughed, offering a cigarette to Chen Dong. "If I hadn't seen the 'yuan' at the end, I would have thought you wrote US dollars!"

After lighting a cigarette, Chen Dong looked calmly at Thorne and Fan Guotao and asked, "Do you think our Xiaochi Automobile Company needs your five-year licensing fee of two and a half million yuan?"

Thorne looked at Fan Guotao in silence, because the authorization fee on the document was not proposed by Thorne at all, but by Shanghai Automotive. Volkswagen wanted global authorization, not just authorization for the China region.

Shanghai Automotive Group (SAIC) wants to tie Volkswagen to its control, linking its negotiations with Snapdragon Automotive with SAIC Volkswagen. Bai Jianbo, the first secretary of SAIC, only cares about the domestic market in China. As for Volkswagen's global technology licensing, what does that have to do with SAIC? If you want to negotiate, negotiate separately.

Fan Guotao put down his teacup and waited patiently for the translator to finish speaking before smiling and saying, "Mr. Chen, 500,000 yuan is just our initial offer from Shanghai Automotive Volkswagen. We can discuss the specific details further, can't we?"

Chen Dong stopped speaking English and went straight to Fan Guotao, "Factory Manager Fan, how much licensing fee do you think we should receive over five years?"

"Mr. Chen, what do you mean? You can bring it up," Fan Guotao, true to his old hand who Bai Jianbo trusted to let him negotiate, didn't answer Chen Dong's question but instead asked a question, passing the buck back to Chen Dong.

"Two methods," Chen Dong said, holding up two fingers. "The first is a revenue-sharing model based on sales volume, where we collect a fixed 20% licensing fee per vehicle, and this is limited to the Chinese market. If Shanghai Automotive Volkswagen exports the vehicles, they must pay an additional 10% of our Xiaochi Motors' overseas patent licensing fees!"

"hiss!"

"Secondly, we at Xiaochi Auto will provide the necessary technical components at a price to be negotiated separately. We also prohibit the components we provide from being exported overseas; otherwise, we reserve the right to pursue legal action! As for the so-called five-year authorization period model, we are not considering it."

Fan Guotao hurriedly pressed Chen Dong, "Mr. Chen, does the technical spare parts you provide include the 1.6L engine from the 'Night-Shining White'?"

"Fan, the engine is a different story. Xiaochi Company can grant authorization, but there are conditions!"

Fan Guotao's eyes lit up. "Mr. Chen, please speak."

"The first authorization is for the engine, not the related electronic control system. You have to choose the electronic control system according to the two conditions I mentioned earlier. The second authorization period is ten years, and the revenue will be shared based on sales, with a fixed 10% authorization fee per vehicle."

"Third, Shanghai Automotive needs to guarantee that this engine will only be used for your own brand and that you will not produce the engine for sale separately or transfer it to a third party with the electronic control system. Otherwise, we will take legal action to pursue accountability and compensation."

After listening, Fan Guotao remained silent for a while. The fixed authorization fee of 10% of the total cost of each engine meant that Xiaochi could get a share of the profits from every "Phoenix" vehicle sold by Shanghai Automobile. This condition was not harsh, but it was not easy either.

Moreover, Xiaochi only licensed the engine blueprints; the most crucial electronic control system had to be purchased separately. In total, Shanghai Automotive had to pay Xiaochi Automotive Company a 30% patent licensing fee for every "Phoenix" sold.

Of course, Shanghai Automotive could choose to directly purchase the electronic control system produced by Xiaochi, but Bai Jianbo told him before he came that in the end, they could obtain the technology license and Shanghai Automotive could produce it themselves, which would also better drive the industrial workers.

Thorne shook his head and looked at Fan Guotao. "Fan, this won't do. 30% of the entire car's profit is already squeezed to the limit. Shanghai Automotive Volkswagen is basically losing money to make a name for itself!"

"Mr. Chen, these conditions are extremely harsh, and our Shanghai Automotive Volkswagen Company cannot accept them," Thorne said to Chen Dong. "You are also in the industry, so you should know that the net profit of companies is generally between 5% and 15%."

"If we pay 30% of the licensing fee to Xiaochi Motors, then our Shanghai Automotive Volkswagen Company will face huge losses every year. This model is simply unsustainable."

"Then you can choose the second option. Our Xiaochi Motors will provide you with a complete engine and electronic fuel injection system, as well as spare parts such as airbags," Chen Dong spread his hands, indicating that if it didn't work, then choose the second option. I didn't force you to choose technology licensing.

Thorne and Fan Guotao shook their heads simultaneously. They were joking. Volkswagen, a prestigious company, needed to purchase core automotive engines from your S-Class. If outsiders knew this, even if Volkswagen covered up the S-Class logo with a rebadged version, people would still laugh at them as S-Class's "OEM."

Thorne didn't even need to consult with Wolfsburg headquarters to know that President Bohr would never agree to the plan. Fan Guotao shared the same thought as Thorne. Shanghai Automotive was one of the three major state-owned automobile factories in China. If the Ministry of Industry and Information Technology found out that they didn't produce their own core engines and instead went to purchase them from Xiaochi, they would definitely issue a scathing rebuke.

"No, no, Mr. Chen, let's continue discussing the technology licensing fee. If you insist on a 20% licensing fee, we demand that you license all of Xiaochi's patented technologies to Shanghai Automotive Volkswagen!"

"Impossible, Mr. Thorne," Chen Zaisheng said directly, rejecting Thorne's "unreasonable idea."

"At present, we will only license electronic fuel injection technology and safety features such as airbags and ABS. We will not license other technologies to any third party. This is our bottom line at Xiaochi Company!"

Thorne's expression darkened upon hearing this. Granting licenses for only three technologies and demanding a patent fee of 20% of the vehicle's price was tantamount to giving Chen Dong a free ride. "Mr. Chen, these conditions are too harsh. I need to discuss this further with Fan and Wolfsburg."

Chen Dong waved his hand dismissively, "Mr. Thorne, no rush. Go back and discuss it slowly. Come back when you've thought it through. The doors of Xiaochi Company are always open, waiting for you to come and talk."