You promised to build cars, so why did you go into the military industry?
Chapter 4 Translation: What is an Industrial Miracle?
"What?! Old Zhao, you've been recruited by the government?"
"What do you mean by 'recruiting'? Can't you speak properly! It was clearly President Li who was impressed by my dedicated professionalism and personally invited me."
"Holy shit! I'm so damn jealous!"
Feeling the envy and jealousy on the faces of his peers, Zhao Shuhang felt extremely pleased.
When we first came here to "expose counterfeits," we were all nobodys in our own companies.
To outsiders who are unaware of the situation, showing off an interview pass can give them the audacity to act arrogantly. But insiders know their own situation; they are just marginalized figures being ostracized.
Originally, we were all poor, miserable people, and all we could do was put on airs and act tough in front of outsiders. The eldest brother didn't criticize the second brother, and everyone understood.
Now! You, with your thick eyebrows and big eyes, have betrayed us without a word?
The thought of having to go back and finish the manuscript made everyone's feelings even more complicated.
"Question the client, understand the client, join the client. Old Zhao, good luck!" Old Feng lightly punched Zhao Shuhang in the chest and turned to leave.
After more than ten days of testing, they were all too clear about the future prospects of this small factory.
It's a stock with absolute potential, and it's only a matter of time before it becomes one of the future automotive giants. Unfortunately, the opportunity was right in front of him, but he failed to seize it.
"Everyone must come to the product launch in a month!" Zhao Shuhang shouted to the departing crowd.
He was met with several middle fingers in response.
-----------------
Inside the factory, twenty engineering prototypes that had completed testing were being disassembled by engineers.
Looking at the dismantled vehicle in front of him, Wang Bing began to explain it to Li Ran:
"Thanks to the secondary upgrade of the production workshop, our manufacturing costs have been reduced by about 40%."
The material cost of a vehicle has been reduced from 22 yuan to about 13.2 yuan.
The hybrid system costs approximately 6.6 yuan, the body and chassis approximately 3.96 yuan, the interior approximately 1.35 yuan, and manufacturing and other costs approximately 1.29 yuan.
To make the most of our production line, we've eliminated the high and low configurations and now only offer one model.
Classic black and white paint, 30KW fast charging, 3.5KW slow charging, 3.5KW home charging station, car refrigerator, power driver and passenger seats, automatic folding mirrors, ventilated and heated seats, power tailgate...
In short, everything that could be installed was installed.
After listening, Li Ran quickly calculated in his mind that with a gross profit of 7%, the selling price would be 141,000 yuan. Adding purchase tax, insurance, license plate and other fees, the final price would be around 150,000 yuan.
But that's not enough to move people's hearts!
In 2009, China's per capita GDP was only US$3898!
Luxury car brands can charge any price, but what about a completely unknown domestic manufacturer? 150,000?
Consumers will vote with their feet!
Li Ran shook his head:
"Too expensive."
Wang Bing seemed to have thought of these things as well, and frowned:
"This price is already because our factory can directly produce most of the materials."
"With these things right in front of me, if those assembly plants come to buy them, I'd be doing it out of kindness if I didn't sell them for at least 30."
Upon hearing this, Li Ran agreed in his heart.
For the Lingyun SU7, patent fees and R&D expenses are almost negligible.
However, for most competitors, patent fees are a major headache.
Compared to them, the manufacturing cost of the Lingyun SU7 is significantly lower.
"By removing the fast charging port, power tailgate, ventilated and heated seats, vanity mirror lights, and replacing the home charging station with a 3.5kW onboard charger, how much can the cost be reduced?"
"3400".
"What about removing the ambient lighting and car refrigerator as well?"
"5200".
123,400 is a somewhat attractive price, but not much.
Li Ran stared at the car parts scattered on the ground, deep in thought.
"The cost of a one-piece die-cast body and chassis is close to 40,000?"
Faced with Li Ran's question, Wang Bing was also quite troubled:
"Our factory is too small. The cost of the car body and chassis is the cost of operating the current production line at full capacity, and the cost of the hybrid system is the same."
Before Li Ran could continue, Wang Bing pulled a piece of paper from his pocket and handed it to Li Ran:
"With current technological capabilities, simply expanding the factory and increasing production capacity from 8 units to 15 units per year can reduce overall costs by 13%."
With an annual production capacity of over 50 units, the overall cost can be reduced by another 7%!
Taking the paper and glancing at the calculations, Li Ran said:
"After the cost reduction, based on an annual production of 150,000 units, the cost would be around 107,000? The selling price would be 114,800, and the total cost after taxes and fees would be around 120,000."
The base price of a top-spec Honda Fit is higher than this!
However, as a new domestic brand, it would be a miracle if the Lingyun SU7 could sell 70,000 to 80,000 units a year.
If there is a way to increase production and sales, costs can drop dramatically, and the final selling price can also be reduced significantly.
Its lower price and higher configuration make it extremely cost-effective. In an era where per capita income is not high, the Lingyun SU7, although a new domestic brand, still has strong competitiveness.
After thinking for a while, Li Ran decided to expand the potential consumer base from individuals to a portion of the taxi market.
"That's settled! The high-end configuration remains unchanged!"
A base model will be produced exclusively for taxi companies.
The interior was kept simple, with all interior components that use motors removed.
The complex structures like makeup mirrors and sunroofs have been removed! The seats are all made of knitted fabric.
With extremely low production costs and extremely low vehicle usage costs, they aim to disrupt the taxi market.
Then we can use this production volume to increase our annual output, thereby lowering the production cost of high-end vehicles for individual users.
Upon hearing this, Wang Bing's eyes lit up.
It's worth noting that in 2009, taxis traveling on well-maintained city roads typically consumed 8-10 liters of fuel per 100 kilometers.
Oil prices have surged from 5.56 yuan/liter at the beginning of the year to 6.45 yuan/liter.
Based on a daily driving distance of 300 kilometers, the monthly fuel cost would be 5800 yuan.
But what if we switch to the Lingyun SU7?
With a fuel consumption of 2.5 liters per 100 kilometers, the monthly fuel cost is 1451.25 yuan! That's a full 4348.75 yuan less!
For taxi drivers, this is real income!
If you charge it every day using a 220V, 16A socket?
The Lingyun SU7, equipped with a 30.64 kWh battery, has a pure electric range of over 300 kilometers.
At 6 cents per kilowatt-hour, a full charge of the battery would cost less than 20 yuan.
After explaining his thoughts to Li Ran, Wang Bing couldn't help but sigh:
"If you smoke one less pack of cigarettes a day, rounding it down, it's practically free!"
After speaking, Wang Bing casually picked up a piece of paper and started scribbling. After a while, he looked up at Li Ran:
"Let's stick with the black and white paint scheme for the base model, while vehicles aimed at individual users will be distinguished by a more premium silver-white color scheme."
In addition, let's change the name and logo of the base model and call it "Shuntu" (meaning "smooth journey"), for the auspicious meaning of a smooth road.
The appearance should also be adjusted so that it doesn't remind people of the Lingyun SU7, lest it annoy users.
With an annual production capacity of 150,000 units, the cost of the Lingyun SU7 can be controlled at around 114,800 yuan.
While ensuring safety and performance are not compromised, removing some intelligent features can bring the total cost down to around 76,900.
Once the calculations were complete, the configuration and cost were clearly written down on paper, everything perfectly clear.
"These joint venture/imported gasoline cars are really making a killing."
With this configuration, if you just change the nameplate, it would easily cost at least a million.
Even so, if you want to pick it up, you'll have to wait two months; they say there are no cars available right now.
After Li Ran finished speaking, he slammed his hand on the table:
"It's time to give them a real shock with industrial miracles."
Do it this way!
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