2003: Starting with Foreign Trade

Chapter 641 Securing the Contract
As the head of Beicang City Investment, Xie Hongjun's status rose rapidly with the reform of the city investment company.

There aren't many people or projects that can be summoned to another city with just one phone call; Tan Jincheng is one of them.

At this very moment, in Ying Jianren's office, the two were carefully reviewing the project plan that had been hastily prepared overnight.

Although it was rushed out overnight, Tan Jincheng did not cut corners at all; all the necessary data was collected with the help of the entire president's office.

He wasn't the only one working overtime that night.

It provides a fairly detailed description of everything from market analysis, product services, marketing strategies, operations and management, to financial planning, risk analysis, and the needs and uses of funds.

"According to the contents of Mr. Tan's plan, this low-speed electric vehicle project is indeed a good project."

Both Ying Jianren and Xie Hongjun only read the market analysis at the beginning. As for the rest, they only skimmed through it. Time was limited, and they couldn't care less about how to operate the business or how to spend the money.

Given Tan Jincheng's personality, if you try to tell him how the company should be operated or what's unreasonable about it, he'll immediately break up the partnership.

"It's a pretty good project. The investment isn't large, and the market size is expected to reach 1000 million vehicles in the future. In addition, it can be exported to earn foreign exchange."

Xie Hongjun also agreed with Ying Jianren's understanding. Judging from the market size alone, if a market share of 10% could be achieved, the production and sales could reach a scale of nearly 10 billion yuan.

What Xie Hongjun cared about most was the scale and profit of exports. The leaders of Beicang were very sensitive to exports, and any business that could be exported was a good business.

"If you two approve of this plan, then there shouldn't be any problems, right?"

In Tan Jincheng's view, the most important thing about a project proposal or business plan is to convince the other party of your business model, or in other words, to give you a tangible incentive, so that they will invest money.

As for the specifics of how to operate, venture capital is all about the people involved, and mature entrepreneurs have already built their own reputation.

"I have no problem with that. Let's proceed with the valuation that President Tan and President Ying discussed before. Does President Ying have anything to add?"

After a brief review of the plan, Xie Hongjun had already formed his own judgment: it was a very mature business plan.

"Four-wheel low-speed electric vehicle, the official name doesn't sound imposing enough, but the nickname Mr. Tan mentioned, 'old man's joy,' is quite interesting, haha, I have no problem with it."

Ying Jianren actually wanted to get more shares, but Tan Jincheng only gave him a maximum of 10%, so he decided to just leave it at that.

"The meaning of 'old man's joy' is that this car is easy to drive, even an old man can drive it."

How to resolve the traffic regulations issue?

"To be honest, I don't have a solution to the traffic regulations issue yet, but that's not the main point. There will always be a way. Where there's a market, there's demand. If all else fails, we'll just focus on exports."

While focusing solely on exports may limit market size, it's still a way to quietly make a fortune.

Many things that are insignificant in China have a large market among foreigners.

"Hey, don't worry about this in the early stages. Electric bikes were a mess in the beginning too, as long as you can make money," Xie Hongjun replied with a smile.

This model applies to almost every industry in China: they do things first and then discuss the results, and only later do they introduce various industry standards.

"Haha, that's true. Back when we didn't have the qualifications, we were all thinking about whether we could take other paths. I was worrying about this for nothing."

"Okay, then it's decided. I will bring this project to market as soon as possible, at the earliest by the end of this year."

With existing production lines, workers, and design blueprints, once the parts supplier issue is resolved, there are basically no more problems.

The components of the old man's car are actually quite similar to those of two-wheeled electric vehicles. Even in terms of batteries, lead-acid batteries can be used, which is perfectly compatible with the existing supplier system of Flash Motors electric vehicles.

All they need to do is ask them to make some technical adaptations.

Even distribution channels can be shared.

"That's great! If sales are good, we can get a share of the profits next year," Xie Hongjun joked.

Tan Jincheng is quite generous. In the past, he distributed dividends to shareholders for his investments in physical enterprises, even before they went public, provided that sufficient operating funds were reserved.

The amount of dividends distributed is a matter of attitude. If the companies under its umbrella can uphold the attitude of distributing dividends every year, it is a very happy thing for minority shareholders.

"Haha, I hope so. I can make money sooner and have peace of mind sooner. I'll try my best."

Ying Jianren had not participated in the investment of Tan Jincheng Enterprises and did not express much opinion on it. Since the three major shareholders had made their decision, the legal department would arrange the contract. A share transfer was not a particularly big deal.

"I will transfer the 1.365 million yuan to you within a month. How about lending me the 2100 million yuan to me first?"

While the legal department was preparing the contract, Tan Jincheng started joking again.

"You little rascal, you really know how to take advantage of every little thing you can."

Xie Hongjun laughed too; it seemed to be his style to always try and fleece any easy target. "Alright, 2000 million isn't a huge sum for a city investment company, I'll lend it to you."

That sounds powerful, but it's the truth.

"Haha, I don't have any money to lend to President Tan. I wouldn't have transferred the contract if I wasn't short of money."

The acquisition of the Fiat project was a huge blow to him, tying up a lot of the company's cash flow. The key issue was that the car models were not selling well. It's unclear whether Tan Jincheng has any good solutions.

Thinking of this, Ying Jianren had an idea: "President Tan, your Yuechi is an SUV. I wonder what your thoughts are on our Mengbo Dilang?"

"Um, what do you mean by that, Mr. Ying?"

"Sigh, it's not selling well. I was planning to try creating original content, but I didn't expect it to be so difficult. I'd like to hear Mr. Tan's opinion. Zhongtai2008 owes a lot to you back then."

Hey, this old guy's trying to get something for free.

"Haha, the success of Zhongtai2008 is not due to me, but mainly because it is cheap. We should all understand one thing: no matter how amazing a product is, it has no power in the face of cheapness."

Even though Flash's low-end electric bikes are touted as having the best value for money in the city, there are still a lot of electric bikes on the market priced around 1,000 yuan. Although their quality is questionable, they are cheap.

Just like Pinduoduo, the low price is enough to attract many people.

"Then we have no choice but to lower the price?" Ying Jianren asked, frowning.

Xie Hongjun, standing to the side, watched the two with a smile, finding it somewhat amusing that a seasoned businessman who had been in the business world for decades was actually asking a young man who had been running his business for less than five years for advice.

If you hadn't seen it with your own eyes, who could believe it?

"It's hard to say about lowering prices; it depends on your internal discussions. To be honest, I don't have any good solutions right now."

The vehicle design has been finalized, and poor sales prove that the model is a failure. There is no other way but to lower prices and promote sales, and to fool some consumers who like to take advantage of small deals.

However, for Mr. Ying, who aspires to produce models priced above 10 yuan, the fact that his new car was discounted less than six months after its launch was quite a blow.

In Tan Jincheng's opinion, the car is just too ugly, and the positioning is also problematic. The competition in the MPV market around 15 yuan is already fierce, and you've made the model so bizarre.

The three seats in the front row are absurd; their aesthetic sense is truly appalling.

Ying Jianren sighed, realizing that the question was pointless. The market had already reacted; consumers were not accepting this price point or this particular model. There was no better solution than a major promotion.

The problem is that we use an imported production line, and most of the parts have to be imported from abroad. If we lower the price, we'll lose money on every car we sell.

"Sigh, this car is taking up too much of our energy."

"President Ying, don't worry too much. No product can be successful. At least the two Zhongtai products and the Aoto product are selling very well," Xie Hongjun comforted him.

"I understand the logic, but it still hurts."

The main problem is the excessive consumption. As an emerging car company, Zhongtai does not have enough energy to support such consumption.

Wei Lai also faces the same problem. If Yuechi fails, it will be difficult for it to develop. Large entrepreneurs and large businesses can afford to lose one or two projects, but small businesses cannot.

The topic had become too heavy, and Xie Hongjun noticed that the atmosphere wasn't as lively as before, so he changed the subject and started chatting casually.

"By the way, Xiao Tan, someone in the district asked me to ask what you meant by raising your bid for Shuguang Auto. Are you trying to acquire them?"

Before he came, someone did ask him to inquire about Tan Jincheng's intentions. If he really wanted to acquire Shuguang Auto, the district could make arrangements to cooperate. Why not have another listed company?

"No, it's just some collaboration. I can't go into the details, please check the official announcement."

Tan Jincheng has no interest in acquiring a controlling stake in Shuguang Auto; he simply wants to acquire Huanghai Auto to enrich Weilai Auto's product line.

It's true that you should build your own supplier system, but you can't be too monopolistic in business.

If you're even handling the parts business yourself, and not even giving anyone a share of the profits, why would anyone want to work with you?
Taking control of Shuguang Auto would undoubtedly be interpreted negatively by existing supplier members, something Tan Jincheng would never do.

"Oh, I see. The district thought you were planning to create your third listed company, which excited them quite a bit."

"Haha, there's no need for that. I've already done a backdoor listing with another company. If I want to go public again, I'll definitely go through the proper IPO process."

FlashChi doesn't have any good listed companies at the moment. Jinpeng Industry is making money right now, so there's no need for it to go public. It would be better to wait a few more years to go public and raise some funds.

Theoretically speaking, 2012 would have been the most suitable year to go public.

(End of this chapter)