2003: Starting with Foreign Trade

Chapter 649 Should we expand?
"Currently, my country's car ownership per thousand people is 38, which is far below the global average of 120 per thousand people, indicating that there is still a lot of market potential."

The news of Tan Jincheng's test drive quickly reached the district, and Zhao Jinsheng was sent over to investigate. Accompanying him was Xie Hongjun, the major shareholder who had also heard the news.

Tan Jincheng thought it was normal to develop an electric vehicle for the elderly in three months, but to those who didn't understand it, it seemed magical.

I wouldn't feel at ease unless I went to see it in person.

"Is this what they call a 'senior citizen's car'? You could tell from the blueprints it was small, but the actual product looks even smaller," Zhao Jinsheng exclaimed.

Others were also present when I attended that project briefing.

Even if men don't understand automotive technology, they still know a fair bit about cars. After seeing the actual product in person, they understand why it's so fast; this thing really does assemble quickly.

"Give it a try, Secretary Zhao, it's very simple."

Tan Jincheng was discussing automotive development with Xie Hongjun. General Motors had already officially entered bankruptcy proceedings, and the global automotive industry showed no signs of recovery, while we were experiencing growth against the trend.

Xie Hongjun was very worried that this might just be due to policy reasons, and what if the policy was stopped?
The cars from Weilai haven't been manufactured yet. Will they catch up with the policy period by then?
Where did you get this data? And is it the latest data?

"The China Association of Automobile Manufacturers has the latest statistics. We didn't reach this level before last year, so there is still a market. In addition, the later the economic recovery in foreign countries is, the more benefits we will receive."

Huang Ming went abroad to investigate lithium resources, but he also had another task: to help Wei Lai recruit high-end talents in the automotive industry in Europe and America, as the industry downturn is the easiest time to poach talent.

Since June, personnel changes at major domestic automakers have become more frequent. GM's bankruptcy reorganization announcement has undoubtedly made major automakers realize that this is a significant opportunity.

"Will your Yuechi be able to be launched at the Guangzhou Auto Show as planned?"

"We have to be able to, even if we can't. We have to put together at least a few prototype vehicles. That's a must."

Mass production is definitely out of reach, but small-batch trial production is still possible. If a few cars are taken to the exhibition, Tan Jincheng believes that some orders can be received, so that Wei Lai in 2009 will not be a complete failure.

No matter how much publicity you do, it's useless if you don't see the car coming out.

Ignoring the sweltering summer heat, Zhao Jinsheng excitedly ran around for a bit and returned to ask Tan Jincheng, "This little car is quite interesting. How much are you planning to sell it for? And what is its range?"

"The smaller one sells for 1 yuan on the market, while the larger one is more expensive. The range is between 60 and 120 kilometers."

The price of the old man's car is between 10,000 and 20,000 yuan. More expensive models may be developed in the future, but the current market price will not exceed 20,000 yuan. The first batch of products is mainly to open up the market.

Zhao Jinsheng nodded: "It's not expensive. It costs two or three months' salary to buy one. So this car should sell well. I feel like it should sell well in Beicang."

"Their company should be able to sell several thousand vehicles nationwide," Xie Hongjun joked.

"Haha, it's hard to say, but I feel that quite a few workers from my hometown will buy it."

Many workers in Wangjiang Industrial Park do not live in dormitories. The workers are mainly locals and workers from surrounding towns and villages. After work, they go home to live, partly because it is more comfortable to live at home, and partly to save money.

Like Tan Jincheng's two uncles, after work they ride motorcycles back to their rural hometown. Even now that they have money, they plan to buy houses in the county and never consider living in dormitories.

Those who remain in the dormitory are generally some of the headquarters' dispatched employees, as well as a small number of people from surrounding counties and cities of Wangjiang who come to work.

In small counties with underdeveloped public transportation, such an inexpensive and convenient mobility vehicle for the elderly certainly has a large market.

"Given your company's size, achieving sales of ten or twenty million is not difficult at all."

Zhao Jinsheng also agreed with Xie Hongjun's opinion. If other factors were not considered, this thing would be perfect for solving the needs of commuting to and from work, and it was indeed very easy to operate.

Xie Hongjun also joked, "Now I understand why President Tan stipulated that employees who bought houses must move out of the company dormitory."

"Mr. Xie, you're wronging me. It was a rule last year that we had to move out of the company dormitory after buying a house. I wasn't thinking about building an electric car for the elderly back then."

The apartments were handed over in May, and Flashlink gave a three-month period for employees to move out of the dormitory, meaning they had to move out of the company by the end of July. This rule was mainly to prevent employees who bought apartments from living in the dormitory and then renting them out to make money.

Not only did it create a chaotic atmosphere in the community, it also went against the original intention of providing employee benefits.

In Tan Jincheng's view, in the days when housing prices were not very high, those who had the courage to buy a house were people with certain economic strength or those with good incomes in their companies.

It's unfair to allow them to enjoy preferential housing benefits while occupying company dormitories, as this is unfair to other employees with lower incomes.

In addition, there is currently no company shuttle bus provided for residents living in the Shanchi community, so they have to find their own way to and from work.

Zhao Jinsheng was right. If each car was priced at 10,000 yuan, and a thousand people bought them, that would be 10 million yuan in sales. Given the current size of the Flash Group's workforce, this was not an insurmountable task.

"When will mass production begin?" Zhao Jinsheng asked after the joke. He was there partly out of curiosity and partly with a mission.

Low-speed electric vehicles, they still have four wheels. This project was not considered low-end in 2009, especially since the Leichi was an original model, not a copy. In the eyes of professionals, its appearance was not very good.

However, from a consumer's perspective, it's actually quite good; it's small, cute, and offers excellent value for money.

"We will produce some prototype vehicles next month for dealers to promote, and mass production will begin in September, with the first batch planned to be 5000 vehicles."

5000 vehicles?

Zhao Jinsheng smiled. 5000 vehicles! If they are all sold in the fourth quarter, that would be 40 to 50 million in sales, making it another large-scale enterprise.

This kid is really something. He's managed to come up with a project of considerable scale in just a few months. He said he could start mass production by the end of the year, but that seems like a conservative estimate now.

"Yes, 5000 vehicles. Let's try it out first and see how well the market accepts it. We also need to see how well foreigners accept it."

According to Tan Jincheng's plan, the domestic market size for electric vehicles for the elderly is limited, and the market growth period will probably last until 2020, with annual sales likely to be between 10 and 30 vehicles.

If we want to extend the company's lifecycle, we need to fully explore the potential of overseas markets.

Does Leichi have any expansion plans?

"Hmm? Why would you ask that?"

Zhao Jinsheng couldn't have just come to take a look and test drive out of boredom; he must have something on his mind. Tan Jincheng knew this, but asking Lei Chi about expansion plans really left Tan Jincheng somewhat bewildered.

This hasn't even been sold yet, how come you guys are more optimistic about it than I am?

"Yes, if there are expansion plans, the district can make plans in advance."

The treatment is excellent. Flash's series of projects are now under close scrutiny. Flash is performing well, and Zhao Jinsheng can't help but wonder when the second phase can be launched.

Tan Jincheng was dumbfounded. Damn it, this was planned in advance?

Holy crap, what if the subway line is rerouted? How am I supposed to make money from the relocation?

"Well, that can't be the case. The current factory area is enough for several years. According to my market research, after Zhongtai transfers their production capacity, Leichi's existing production capacity should be sufficient until 2015."

There are still six years until 2015, and our Boss Tan really wants that relocation fee!

The relocation of over 1000 acres of factory buildings, in addition to providing new industrial land, must have relocation subsidies alone amount to at least nine figures, right?

"Besides, the production of old man's cars is actually quite simple and the profit is not high. It is more suitable to be located in a small county town. It would be a waste to place it in our district. My factory is intended to produce real new energy vehicles in the future."

Tan Jincheng kindly advised that the district should focus on real new energy vehicles, not these kinds of old-fashioned electric cars.

He definitely wasn't after that relocation fee!
"A true new energy vehicle?"

"Yes, true new energy vehicles, like current gasoline vehicles, can easily meet travel needs and have a range of several hundred kilometers."

Opinions vary on whether new energy vehicles are superior to gasoline vehicles.

However, a set of data shows that the new energy vehicle project in the 863 Program is essential: "In 2008, 500 domestically produced cars were sold nationwide, of which foreign brands accounted for as much as 74%."

Industrial upgrading is now a necessity; if you want to make money, you have to follow the policies.

"Alright, I'll go back and report. Oh, and remember to send a few of the improved prototypes to the district after they're finished. Also, arrange an inspection as soon as possible."

Zhao Jinsheng didn't know what to say. This was the general policy direction. Although there were still many doubts about the development of the new energy industry, and although most car companies expressed their support, very few of them actually did.

Currently, only BYD truly supports the development of new energy vehicles. Other companies may verbally express their support, but they are still heavily investing in and developing gasoline-powered vehicles.

Even with Weilai Motors, although Tan Jincheng has stated on several public occasions that he will vigorously develop new energy vehicles, it has only remained lip service.

"That's no problem. Secretary Zhao can let us know as soon as he has made the arrangements."

Tan Jincheng readily agreed. He liked this kind of promotion and was happy to come several times a month!

(End of this chapter)