2003: Starting with Foreign Trade

Chapter 656 Yuechi's Pricing

"The space and exterior are quite good, but the interior is a bit lacking."

"Also, it's a bit sluggish when starting, is there no more power? And the sound insulation is just average, so the driving comfort feels a bit lacking."

Tan Jincheng looked at his old friend with some appreciation.

"That's impressive. We don't drive much anymore, and you've already asked so many questions on your first test drive. You're quite professional."

"Haha, I drove pickup trucks, Passats, and A6s a few years ago, and I hauled goods for you for over a month. How could I not know anything about it?"

Tan Jincheng's gaze and words made Zhang Xupeng somewhat smug.

"The problems you mentioned do exist; many people who have test-driven it have had similar experiences. However, this is our first car, so it's normal for it to have some minor issues."

"Also, the interior isn't too bad. It's comparable to the CRV, although the CRV's interior is just so-so. But if these flaws are considered when the starting price is less than 10 yuan, then they're not really flaws."

"A starting price of less than 10? Holy crap, then there's nothing wrong with that."

No car is perfect, and Mr. Tan isn't that obsessive-compulsive about making the product the best it can be. Yuechi has never announced its price, but the starting price will definitely not exceed 10 yuan.

As a mid-size SUV that rivals the CR-V, the Yuechi's modern design and features, coupled with a starting price under 10 yuan, make it an absolute bargain.

"The 1.5T is indeed a bit sluggish, but the 2.0T is better. We won't go any higher, as it's a gas guzzler and won't sell very well."

Many companies offer 2.4T engines, but with immature workmanship and technology, they are basically high-fuel-consumption vehicles. Consumers complain bitterly after buying them for a while, feeling that they are being ripped off.

Yuechi A1 does not plan to produce models with engines higher than 2.0T. Making a little money would damage its reputation. As an urban SUV, unless you go to places with particularly bad road conditions, the current power is definitely enough.

Zhang Xupeng thought for a moment and said, "That makes some sense. As long as the car is spacious and cheap, it's fine. But I don't know how many of these cars you can sell with this production capacity."

"Let's send a batch to the dealers and 4S stores first and then see what happens."

Currently, Weilai has established a total of 400 4S stores and dealerships nationwide. Ideally, each 4S store and dealership would sell an average of one car per day, which would result in an annual sales volume of 14.6 vehicles.

This is why Tan Jincheng told Wei Lai that the annual production capacity must be increased to more than 12 vehicles next year.

Once established, sales channels like 4S stores and dealerships are unlikely to be changed. Since last year, Weilai has spent a lot of money to transform the existing dealership system of Yangzi Automobile.

We may expand it further later, but probably not by much.

According to the design, the number of suppliers in the Weilai Auto fuel vehicle system will not exceed 600, and will be roughly controlled at around 500.

Fuel-powered vehicles are the initial requirement. Tan Jincheng's ideal is for Yangzi pickup trucks to sell more than 2 pickup trucks annually, Huanghai buses to sell around 1000 commercial vehicles, and SUVs to sell 10 units.

In this way, Weilai Auto can live very comfortably and invest the profits in the research and development of new energy vehicles.

"Make time for me on the 18th of next month, come with me to the Shanghai New Car Launch Event, and bring your little darling wife along."

"I might not be free. The Canton Fair starts on the 15th, so please try to make time for me. There's no need to make special arrangements for me."

Zhang Xupeng was having a headache. Affected by the international financial crisis, import and export trade had plummeted since November of last year, and only gradually stabilized in March of this year, but the market was still very sluggish.

The bilateral trade share of the three major trading partners, the EU, the US, and China, has all declined by more than 10% this year. The spring Canton Fair is practically a waste, and we are just hoping that things will be better in the autumn.

Jinpeng is not making any major investments this year, mainly because the import and export trade situation was not good in the first half of the year. Fortunately, the GXG project in China has been launched.

Starting in October, Zhang Xupeng will be very busy.

The engagement, the Canton Fair which started on October 15th, and this year's Double Eleven shopping festival, where Taobao Mall, under Jack Ma's control, which later became Tmall, officially launched the Double Eleven shopping festival.

Individual businesses cannot join, brands need authorization, existing C2C online stores cannot be upgraded with one click, and the fees are much higher than those of previous C2C online stores. For example, Taobao's commission rate for clothing is as high as 5%.

Old Ma himself started his own online store, which met with resistance from C2C ​​websites. Coupled with the increase in commission rates and entry barriers, this year's Double Eleven shopping festival was somewhat lackluster.

Only 27 brands participated in Taobao Mall's Double Eleven shopping festival. Most brands simply used it as a channel to clear out their inventory, and GXG was one of them.

Compared to other merchants, GXG has much more experience participating in such large-scale online shopping festivals.

After a moment's thought, Tan Jincheng understood why Zhang Xupeng said he might not have time; the kid was probably just as busy as he was before New Year's Day.

Tan Jincheng still remembers the Double Eleven shopping festival back then. The delivery service was simply ridiculous. Things bought on Double Eleven might not even arrive by Double Twelve.

But this life should be better, right? Singles' Day was first created by Orange Products.

"By the way, let's sell our Taobao stores. We don't need them anymore; they've fulfilled their historical mission."

GXG, and Yueyue, a children's clothing brand under Jinpeng, both have opened flagship stores on Taobao Mall.

Zhang Xupeng asked with some doubt, "Why sell it? It won't fetch much money anyway."

"You've had too many good days. With the establishment of Taobao Mall, the value of these C2C online stores will definitely depreciate. Wouldn't it be more useful to sell them now and buy a shop or an apartment instead of keeping them?"

Besides the flagship store on Taobao Mall, Jinpeng currently owns a total of 5 C2C online stores. As the earliest batch of online stores, these 5 stores have the highest ratings and the best reputation.

If you sell all of them, you can buy a 100-square-meter apartment in Ningbo.

"His mall only has a few dozen merchants, how much of a fuss can it possibly achieve?"

On the internet, Zhang Xupeng only came into contact with Tan Jincheng. Ever since Tan Jincheng became busy with Shanchi's affairs, Zhang Xupeng hadn't really embraced internet thinking, and opening an online store was just a continuation of his old traditions.

Although internet companies were booming in 2009, they are not yet a mainstream industry. Real estate and physical manufacturing are still the most prominent sectors.

Compared to Tan Jincheng, Zhang Xupeng's thinking is more traditional. He is happy to buy houses and shops, but he doesn't want to invest too much in the internet industry.

To be honest, Zhang Xupeng's understanding of the internet is still inferior to Li Jinglan's.

"You underestimate Lao Ma. Just watch, he'll be the richest man in a few years. Focus on developing GXG's online store; that's his future. If you don't understand, transfer Li Jinglan back and let her handle this for you." Orange Technology has no shortage of internet talent, and Li Jinglan has been working at Orange Technology for almost two years. Transferring her back to Jinpeng to oversee the internet e-commerce business is indeed feasible.

In addition, she can also connect with Orange Products Club, as GXG is sold on e-commerce websites such as Orange Products Club and JD.com.

"Okay, then transfer her back. It'll be good for her to try out this business, and it'll give me some free time."

Zhang Xupeng couldn't be happier. He could clearly feel the rise in housing prices. He was quite interested in the plan to build the Jinpeng commercial and residential building that was mentioned on the way here, and planned to put some time and energy into it when he had some free time.

"Oh, right, there's one more thing. Ruoxi will be leaving the company soon. Do you have any good projects to recommend?"

Zhang Xupeng said it casually, but Tan Jincheng was taken aback for a moment, then looked at him intently and asked, "Hmm?"

Meeting Tan Jincheng's gaze, Zhang Xupeng smiled and said, "What's up? Introduce a project, preferably something easy."

Tan Jincheng sighed: "You don't have to do this, but since you've made up your mind, then so be it."

Nie Ruoxi previously worked in the finance department of Jinpeng Industrial, where she didn't actually have much power. However, Zhang Xupeng was clearly trying to avoid suspicion, fearing that the change in his status after marriage might cause unexpected problems for the company.

It has to be said that Zhang Xupeng has truly matured.

In reality, Tan Jincheng didn't care much. The foreign trade garment industry was originally his first pot of gold, and he didn't intend to do it for a long time. The merger with Flash Group was an unexpected opportunity.

It's actually somewhat out of place with the group's overall business; it's more like an independent entity.

Tan Jincheng respected Zhang Xupeng's decision. Considering Nie Yunlai's relationship with him, transferring Nie Ruoxi away from Jinpeng was indeed a good decision. Who knows if Nie Yunlai will advance further in the future?

By then, he will be able to influence Jinpeng's development through his daughter.

"How about opening a 4S store in Weilai? Hire a group of people to be her boss's wives. It should be a relatively easy job, and you can earn quite a bit."

A 4S dealership is a relatively profitable business, selling vehicles and providing additional services such as financing and insurance. Generally, a 4S dealership can earn about 10,000 to 20,000 yuan for each car sold.

The average investment for a 4S store is around 200 million yuan, and the investment can be recouped within a year.

With connections and resources, this should be a great business: "That's a good idea. Could you help me with that? You're more professional than me when it comes to site selection and recruitment. Just let me know how much it costs."

"No need for all that trouble. The 4S store in Beicang is our own business. We can just transfer it to you. Just give Wei Lai 300 million and have Zhang Yong sign the contract."

The 4S store in Beicang is the flagship store of Weilai, which sells all of Weilai's current models, including sports cars.

"Haha, I can't accept that. Let's go find General Manager Zhang."

Zhang Xupeng didn't stand on ceremony; he grabbed Tan Jincheng and headed towards the office.

The boss came to inspect the factory and even took his good friend for a test drive. Zhang Yong knew about this as soon as Tan Jincheng entered the factory area, but Zhang Yong did not approach him. He would have someone notify the boss if he wanted to see him.

Besides, he's been incredibly busy lately. As a newly established car company, many staff members lacked experience in launching their first self-developed model.

At this moment, Zhang Yong, who was in charge of the central army, became particularly important.

The first batch of cars produced in a small batch recently is about to be shipped to 4S stores and dealerships in various places, but there is still a very important problem to be faced.

That means the boss hasn't signed off on the specific price yet.

See, this is a huge blunder. Keeping the price a secret is understandable, but the cars are about to be shipped out, and even the actual manager can't determine the market price. How can they negotiate with the dealers?
"Boss, you've come at the right time. Here's a document for you to sign."

Seeing the boss arrive, Zhang Yong disregarded Zhang Xupeng's presence and quickly pulled Tan Jincheng over to finalize the market price.

Tan Jincheng took the document and looked at it, feeling somewhat embarrassed.

Damn it, I forgot about this. I thought it was already decided.

The newly released Yuechi A1 includes six models in total, including both gasoline and diesel versions. The gasoline version is the main focus, while the diesel version is priced between 12.18 and 14.18 yuan.

The gasoline version has two options, one ranging from 8.88 yuan to 15.49 yuan.

The other option is between 9.58 yuan and 16.28 yuan.

"Cars are selling well this year, so there's no need to lower prices or do promotions. Let's stick with the starting suggested retail price of 9.58 yuan. As for the price given to dealers, we'll still offer a discount of 8.88 yuan."

If the market is good, then we don't need to be nice guys. There's no doubt that the base model should be priced below 10 yuan, but if it can be a little higher, then it will seem more high-end.

In addition, it can provide dealers with ample room for discounts.

"Is this something I can listen to? Mr. Zhang, you don't have high hopes for me."

Zhang Xupeng, who followed him in, couldn't help but roll his eyes. The market price of a car was a closely guarded secret before it was launched.

If you encounter a competitor, once they know your price, they can easily hold a launch event for a similar model the day before your new car launch to launch their own.

"It's not a big problem. Our model currently has no competitors, but Mr. Zhang, you can just pretend you didn't hear that."

Generally speaking, the ex-factory price is usually 15% to 20% lower than the market guidance price. This means that if a car has a market price of 10 yuan, the car manufacturer will give the 4S store and dealer the price of around 8 yuan.

Unlike two-wheeled electric vehicles, 4S stores have some autonomy in pricing, depending on the region and preferential policies. For example, if the suggested retail price is 10 yuan, the 4S store can sell it for 9 yuan after discounts.

The boss set the suggested retail price at 9.58 yuan, while the ex-factory suggested retail price was 8.88 yuan, which gave Zhang Yong ample autonomy to negotiate with distributors.

Tan Jincheng's actions ignited Zhang Yong's arrogance, and his words became incredibly boastful.

"Hahaha, no rivals? Mr. Tan, I've noticed that the staff at Weilai are all incredibly arrogant. Is this all because of your influence?"

Zhang Xupeng laughed heartily, then added, "However, as your brother, I wish you all the best in everything. How about this, I'll support you with 10 top-of-the-line models, just give them to me at your factory price."

(End of this chapter)