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

Chapter 385 You Need to Understand the Company's Difficulties

Thorne pondered how to report the progress of the technology licensing negotiations to Wolfsburg. By the time he returned to the guesthouse arranged by the Zhaoyang District Committee, it was already dark. Thorne leaned against the bed, lit a cigarette, and carefully considered the details of today's negotiations.

After thinking for a moment, he stubbed out his cigarette, glanced at his watch—it was 7 p.m., which should be 1 p.m. in Wolfsburg. Thorne immediately took out his satellite phone and dialed an international number.

After waiting for a long time, Paul's slightly sweet voice finally came from the other end. Thorne didn't waste any words with her and transferred the call to Paul's office. Paul's usual cold and stern question came through: "Thorne, I hope you have good news for me!"

"I'm afraid I'll have to disappoint you, Mr. Paul," Thorne told Paul about the two conditions he had obtained from Chen Dong, which was met with a long silence from Paul.

"Tell Xiaochi that we cannot accept these conditions, not a single one of them!"

“I told you, Tony Chen said there’s no rush, let us think it over slowly, and then contact him again,” Thorne paused, “Mr. Paul, I don’t think he’s bluffing.”

Bohr knew, of course, that Chen Dong wasn't bluffing. The technologies held by Xiaochi or Huasheng Fund were currently only produced by a few companies, and Bosch, Delphi, Denso, and other companies were quoting very high prices.

Bosch quoted 12% of the total vehicle price, and only the electronic fuel injection system could be licensed. The Snapdragon was priced at 20%, which seemed expensive, but it included airbags and ABS technology. Volkswagen obtained these separately from Bosch and Delphi, and the total price would not be less than 20% of the Snapdragon's price.

Paul had done the math, but as a professional manager, he knew that Snapdragon was a better deal, but he just didn't want to admit it. He simply wanted to get those technologies from Snapdragon at a lower licensing price.

Half of Bosch's technology was derived from Delphi's patents. These days, everyone has to go around in circles, but Snapdragon is different.

These Yang Ji guys really understand technological patent barriers too well; they've built such high patent walls that even Bosch has to bow down.

After a long silence, Paul spoke again, "Thorne, the company's bottom line is 20%, but it requires Skoda to license four technologies, including high-pressure common rail electronic fuel injection and multi-point electronic fuel injection. You know how much Europa customers love diesel cars; this technology is extremely important to us!"

"I understand, Mr. Paul!"

The European car market has always favored diesel cars. In Europe, a large part of the price of fuel is tax, and due to the oil crisis, people pay more attention to fuel-efficient cars rather than pursuing large displacement and high horsepower.

In terms of price, diesel has a natural advantage. Not only is it cheaper than gasoline, but it also has a lower tax rate. Diesel engines are also 25% more thermally efficient than gasoline engines. This means that when you fill up a tank of gas, not only is the price lower, but you can also get much more mileage than a gasoline car.

Volkswagen also has its eye on the unique high-pressure common rail electronic fuel injection technology of the Scirocco. If it can obtain the technology license for Scirocco, then Ball believes that, given the current high gasoline prices and tax rates in various European countries, Volkswagen will definitely be able to dominate the entire European diesel car market as long as it launches a diesel car with high-pressure common rail electronic fuel injection technology.

Unlike America, the average price of fuel in America is at least half that of other European countries. This is one of the reasons why people in America prefer cars with large V8 engines. The cost savings of diesel cars are completely insignificant compared to the high horsepower, high RPM, and high acceleration of a large V8.

floor it and get going, just pure exhilaration!

Throughout the 1980s and 90s, gasoline cars accounted for 95% of all cars in America, and many gas stations did not even have diesel fuel pumps installed. China was a bit different. Many people would say that the quality of diesel fuel in China was not good, which is why there were no diesel cars in the country.

This is simply parroting what others say. The refining process and experience for diesel are the same as those for gasoline. Why does no one question the quality of gasoline, but insist that diesel is inferior? This is completely illogical.

The real reason is that diesel is a strategic reserve energy source in China. It has high value and strategic significance for both transportation and military use, and it is not allowed to be widely used in the civilian market.

Whether it's freight or agricultural machinery, the economic value and status generated by diesel-powered machinery far surpasses that of gasoline-powered passenger cars.

Moreover, diesel consumption in China has always exceeded that of gasoline. Trucks, agricultural machinery, military trucks, tanks, and other vehicles on the road are the main consumers of diesel. Once diesel cars are widely used in the civilian market, it will further squeeze the market share of freight and agricultural machinery that originally used diesel.

These factors would further increase transportation and farming costs within China, which is not permitted by the government.

Crude oil can be refined into aviation kerosene, diesel, and gasoline. Aviation kerosene is of the highest priority and cannot be interrupted or lacking, and its quality must not be reduced.

Diesel is the second priority, the lifeblood of industry, and holds the key to the nation's economic lifeline. Gasoline is only the third priority, a non-essential fuel that can be abandoned at any time.

Many people in later generations saw civilian cars everywhere and assumed that gasoline was more valuable than diesel. However, in the event of war, when a country faces a shortage of crude oil, gasoline would be the first product to be stopped from refining.

Moreover, it is an indisputable fact that good diesel engines are inherently more expensive than gasoline engines.

Volkswagen has been vying for the diesel passenger car market in Europe. Now that the Snapdragon has high-pressure common rail electronic fuel injection technology, Ball can further begin its strategic layout in the diesel passenger car market.

"Thorne, these technologies are extremely important to the company. You must strive to acquire them. At the same time, you know that the company's financial situation isn't very good; you must understand the company's difficulties!"

"I understand. In subsequent negotiations with Snapdragon, I will do my best to secure more technology licenses for the company at the lowest possible cost!"

To put it bluntly, Bohr wanted both, but Fan Guotao's situation was different. In his phone call with Bai Jianbo, he mentioned Chen Dong's two suggestions from earlier that day. Bai Jianbo was about to agree immediately, but then he realized that if he agreed too readily, it would be difficult to get more technology from Chen Dong later.

"Old Fan, here's what you do. Tell Chen Zaidong that we, Shanghai Automotive, will sign a separate contract with Xiaochi Automotive. We want both options," Bai Jianbo instructed over the phone. "We also want the authorization, and we want the complete engines produced by Xiaochi."

"Secretary Bai, this profit-sharing ratio is difficult to negotiate!"

"Why is it hard to negotiate? Just tell Chen Zaidong, 20%. We only want the engine and related technology licenses. As for things like airbags, you can negotiate with him about that!"

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