2003: Starting with Foreign Trade

Chapter 638 Seeing Boss Ying Again
The 6 sets of digital Tanjincheng were calculated based on costs, and this figure is an acceptable initial investment for Weilai at present.

This cost will not be mentioned during the small-batch trial production period.

In terms of actual production, Tan Jincheng plans to set the initial production capacity at 5000 gasoline models and 1500 diesel models, which is also the initial procurement volume of parts.

Based on cost calculations, the first batch cost approximately 5.5 million yuan.

Wei Lai can afford to pay this money; to put it more arrogantly, he can afford to lose it.

And the first batch of products will definitely have advance orders. Just like the real estate industry, cars can also be turned into financial products. Unless not a single car can be sold, it will be within a controllable range.

“6 sets is a year’s worth, not a month’s worth, so Mr. Nagasawa doesn’t need to be so surprised.”

Tan Jincheng found Nagasawa Yu's stunned expression somewhat amusing, but it was a normal reaction. It was unheard of for a first car model to have 6 pre-orders, even if they were in batches.

With 6 sets of engines, is Weilai Auto planning to sell the engines at a discount through large orders and make a profit from the price difference?
"Isn't this a bit too much? Mr. Tan, you need to think this through. What if we can't use the remaining 5.5 units? That would mean paying a penalty for breach of contract."

Tan Jincheng told him that the first batch was 5000 sets, but the contract was for a total of 6 sets for the whole year. In Chang Zeyu's view, an order of 5000 sets was already a large order for Weilai Auto at present.

“I understand Mr. Nagasawa’s concerns. How about this, we’ll purchase 5000 sets first, but we need to sign a supplementary agreement. If the market response to our Yuechi is good, then we’ll proceed as I request.”

After thinking about it, Nagasawa Yu thought the plan seemed to be fine, so he nodded in agreement.

"If it's the first batch of 5000 sets, you have to give us a discount. You have to supply us at the price for 6 sets."

Nagasawa Yu glanced at Tan Jincheng, whose face radiated confidence.

"Mr. Tan, you think so highly of your new car? Then I'm really looking forward to it. How about you send me one to experience it when it's released?"

"That's definitely no problem. I'll send one over when the time comes."

Nagasawa Yu was genuinely curious about what kind of car model gave Tan Jincheng such confidence that he dared to place an order for 6 units. All that was known so far was the brand name, the trademark, and that the model was an SUV.

The R&D project team of Yuechi was placed in the deepest part of the Meishan Island factory by Tan Jincheng. Before 2008, Meishan Island was so remote that even people from Beicang were reluctant to go there, let alone outsiders.

In addition, the security of the Yuechi project's R&D team and testing site is very strict. Even employees of the factory area are not allowed to enter without permission, in order to maintain maximum confidentiality.

If a car's design is leaked early on, it can be fatal.

It's like someone revealing your trade secrets during the IPO process.

"I'm really looking forward to the launch of the Yuechi A1. I wish it great success," said Yu Nagasawa.

Tan Jincheng roughly understood what he meant: Mitsubishi would introduce the Outlander and ASX models, along with the existing Pajero. These three models embody Mitsubishi's dream of conquering new territories.

Weilai also launched an SUV. Although Nagasawa Yu understood that Weilai could not directly launch a model similar to Mitsubishi's, which would undoubtedly be like fighting with his own left hand, it did not mean that he did not have other ideas in mind.

In recent years, China's own brands have been developing better and better, and BYD has been selling particularly well this year.

"To be honest, Yuechi's competitors should be Honda's CRV and Volkswagen's Tiguan."

Of course, Tan Jincheng wouldn't tell Changze Yu this. In about six months, it will be released. You can guess whatever you want.

If I can actually sell 6 cars in the first year, I don't believe you won't sell me the engines. I can't manufacture engines right now, but I'm not worried about not being able to buy them.

It's a pity that they started too late. If it had been a few years earlier, Weilai would definitely have developed its own engine like Chery. With its own engine system, the cost could have been reduced by who knows how much.

However, as long as we can get through 2010, things will be fine. By 2011, the engine project in cooperation with Foton Cummins will be available, and at that time, as a minority shareholder, Weilai Automobile will be able to reduce costs to some extent.

Cummins' diesel engine series is of good quality. While its gasoline engines may not be able to outperform Mitsubishi's, its diesel engines can completely replace Isuzu's, and can also reduce the costs of Yangzi pickup trucks and the soon-to-be-acquired Huanghai Automobile.

In terms of the cost of traditional fuel vehicle components, the engine accounts for a relatively high proportion of the cost, about 15% for passenger cars and about 23% for commercial vehicles.

Secondly, there's the transmission. These two components account for about 35% of the total cost, while the cost of other parts generally accounts for 40% to 60% of the total vehicle cost.

For every percentage point reduction in component costs, the investment in the first batch of Weilai Auto products will be reduced by hundreds of millions of yuan. In addition, the cost of automobiles also includes internal costs, external costs, and sales costs.

Tan Jincheng chatted with Nagasawa Yu about cost control. Nagasawa Yu was quite straightforward, explaining his knowledge to Tan Jincheng in simple terms. The fact that they could communicate in English without a translator was a significant advantage for Tan Jincheng.

"There's something I've always been curious about, Mr. Tan. You didn't go to university, so why is your English so good? Or is it really, as the media says, that you learned it from your wife?"

Actually, Nagasawa Yu wanted to ask this question when they first met.

However, the two were not familiar with each other at that time, and it would be impolite to ask directly.

"After graduation, I worked on a cruise ship for a while due to some changes. The environment there required the use of English, and I actually learned most of it during that time."

Many people know about this dark history. Almost everyone in Yicheng who knew Tan Jincheng before 2003 knows about it. However, as Tan Jincheng and Zhang Xupeng have achieved success, few people mention it anymore.

However, if one were to inquire seriously, one could find out. Given Mitsubishi's information gathering capabilities, it's impossible that they didn't know this. Therefore, when Tan Jincheng was asked by Nagasawa Yu, there was no need for him to hide it.

In reality, it is the combined experience of two lifetimes on cruise ships, totaling 28 months, along with foreign trade, that has shaped Tan Jincheng into who he is today.

Unlike what Gu Qingqing learned at school, Tan Jincheng, who learned English through his own work, often finds it easier to communicate in spoken English.

"I see. It seems the experience at sea left a deep impression on President Tan," Nagasawa Yu said with a sudden realization.

He did not deny knowing about Tan Jincheng's experiences at sea, which made sense, since survival is the best teacher.

After talking with Nagasawa Yu, Tan Jincheng had dinner at Mitsubishi headquarters and then went back.

After spending one night at the hotel, Tan Jincheng and Li Yaohui made a brief appearance at the exhibition the next day, chatted with their staff, and gave each other a pep talk before setting off from Shanghai for Yongkang.

It's been a long time since Tan Jincheng has seen Ying Jianren.

2008 was a difficult year for most businesses, with businesses of all sizes affected to some extent. Flashpoint and Zhongtai were no exception.

However, compared to other companies, Flashpoint and Zhongtai are doing quite well.

Both companies made large-scale acquisitions in the capital market and got what they wanted. Both groups expanded rapidly. Although Mengbodilang had a poor start, it was just a setback on the transformation of Zhongtai.

If changes can be made quickly at this time, Zhongtai may be able to replicate the path of Chery or Geely.

However, after the setback, Ying Jianren's mindset has changed somewhat. He feels that it's better to just copy than to create something original, especially after seeing BYD's F3 become so popular this year.

The car market was sluggish in 2008, but got off to a good start in 2009. Under the influence of the purchase tax policy, sales of small-displacement models were exceptionally strong, and the biggest beneficiary was BYD's best-selling F3 model.

In the first quarter, the F3 sold a total of 47757 units, surpassing best-selling models from joint venture brands such as Jetta, Excelle, and Corolla for three consecutive months and firmly holding the title of monthly sales champion. BYD executives even boldly declared that the sales target for the F3 in 2009 was 40 units!
Who wouldn't be envious?
F3 imitated Huaguan, and after seeing the success of F3, Mr. Ying, who had started by copying, began to waver in his commitment to creating original content. It was after the success of F3 that Mr. Ying began to set his sights on Xia Bing, a senior executive at BYD.

Not many people may know the name Xia Bing, but he was the one who spearheaded the design of the F3, which is a pixelated replica of the Corolla.

Feeling that his own car manufacturing capabilities were inadequate, Boss Ying thought about poaching talent. In fact, he got the inspiration from Tan Jincheng and Wei Lai Auto's operations.

Wherever Boss Tan goes, he wants to take a few talented people with him. Before Weilai Automobile even started construction, the first step was to poach Zhang Yong from Futian. Ever since he wanted to transfer the Beicang factory to Tan Jincheng, Boss Ying has had these thoughts.

However, given the immense popularity of F3 this year, Ying Jianren knew that poaching Xia Bing would be extremely difficult. If he could get some money from Tan Jincheng, Mengbo Dilang might be able to struggle a little longer.

If it really can't be done, then we should try to poach Xia Bing.

Tan Jincheng, who was in a hurry, arrived in Yongkang at three o'clock in the afternoon.

Having missed lunch, Tan Jincheng didn't waste any time and went straight to the Zhongtai factory, where Ying Jianren was waiting for him.

Upon meeting, Tan Jincheng bluntly asked Ying Jianren, "President Ying, please have someone get me and Brother Li some food. We're starving."

Ying Jianren was speechless at Tan Jincheng's shameless behavior, but this casual attitude eliminated the lingering resentment he had about the Zhongtai Beicang factory.

Brother Tan is still the same Brother Tan. Putting aside that matter, he is indeed a person worth befriending.

"Okay, I'll have someone arrange it right away. Come and have some water with Xiao Li first."

(End of this chapter)