2003: Starting with Foreign Trade

Chapter 686 Huanghai Pure Electric Bus
I returned to Ningbo on December 21st.

Another year is about to pass. During his five days in Chuzhou, Tan Jincheng finalized the next steps in the research and development of pickup trucks, the sales plan for next year, and the incentive measures for Yangzi Automobile this year.

I also discussed Yangtze Motors' future expansion strategy with Zhu Pei and others.

Formulating plans based on Great Wall Motors' pickup truck production capacity is a suitable reference.

In the final month of December, the automotive market continued its boom, with the pickup truck sector also experiencing significant growth. According to data from the China Association of Automobile Manufacturers, total sales of pickup trucks this year are expected to exceed 250,000 units.

Great Wall pickup trucks are expected to achieve total sales of over 70,000 units, maintaining their position as the sales champion in this segment for the 12th consecutive year.

The sales volume of Yangzi pickup trucks, which is more than 20,000 units, is about one-third of that of Great Wall. Therefore, in terms of production capacity planning, based on Great Wall as a benchmark, it should also be increased to about one-third, which means an annual production of about 120,000 units.

The market boom caught many manufacturers off guard, and those who were unprepared were left behind in this wave of growth.

For Weilai Auto, Tan Jincheng's foresight was a bug. If they hadn't made sufficient preparations in advance, and had achieved a production capacity of 20,000 to 30,000 vehicles in the first year like other small manufacturers such as Zhongtai, they would have been completely caught off guard.

"A production capacity of 12 vehicles is necessary, but it will have to start next year. The company's debt ratio needs to be reduced. We just signed a new agreement with Luzhou."

With an annual production capacity of 5 vehicles, it's not too bad. Before new models are launched, it's unlikely that Yangzi Pickup's production capacity will see a major surge. Great Wall only saw a major surge after the launch of the Wingle 5.

Selling cars is actually quite similar to selling clothes. A hit product can boost sales of other products under the company, leading to a surge in production and sales.

Before the F3 became a bestseller, BYD's sales were lukewarm. The strong sales of the Yuechi A1 indirectly boosted the sales of Yangzi pickup trucks.

Mr. Tan promised to expand the production capacity of Yangzi Automobile after next year, which is both a cause for celebration and regret for the Chuzhou government.

The good news is that a promise has been made that Yangzi Automobile's output value will reach more than 10 billion yuan this year. This is a pleasant surprise for the CZ City government. After expanding its production capacity, Yangzi Automobile will not only bring more industrial output value, but also solve more tax and employment problems.

Unfortunately, it's just a promise for now, and it's unknown whether it can be fulfilled in the future. But in any case, Weilai Auto intends to make Chuzhou its pickup truck industrial base.

Chuzhou has to accept this offer.

Taking Chuzhou City Investment Group as an example, their 6000 million yuan investment now seems to have been a great bargain. Compared to the increased investment in Weilai Automobile by the Ningbo and Luzhou municipal governments, Chuzhou, a prefecture-level city, really has nothing to worry about.

So what if it's just empty promises? We've got nothing to lose, and besides, we've already made a fortune. Let's just go for it.

"Actually, if Yangzi Automobile is short of money, our city investment company can provide support. As for land, that's even better. Our city investment company may not have much else, but we have plenty of land."

In general, the managers of urban investment companies in prefecture-level cities are at the level of division chief or deputy division chief. Among all the urban investment companies that Shanchi Group has cooperated with, Du Jie, the manager of Chuzhou Urban Investment Company, is the lowest-ranking and also the least influential.

However, this is only relative to other urban investment companies. As representatives of local state-owned assets, urban investment companies have considerable influence after the reform, and many are eyeing this position.

Originally, Du Jie should not have had the opportunity to continue in this position. Last year, he was incredibly lucky and caught up with the early stage of Weilai. Combining the assets of Yangzi Automobile, Du Jie decided to invest in Weilai Automobile together with Luzhou City Investment.

Those who have been pushed to this position have something to offer, and the rest depends on their individual achievements. This investment led by Du Jie has undoubtedly brought him a lot of prestige.

After making grand promises, Chuzhou still wants to try harder and launch the expansion project as soon as possible.

"Thank you for your concern, Mr. Du. With your help, Yangzi Motors will be able to achieve better development."

"However, the existing production capacity can still support Yangzi's sales for the next two years. If it really doesn't work, we can keep the employees busy, like the Beicang factory, with three shifts. You know the risks of launching several large projects at the same time."

The project in Luzhou City has suddenly increased Wei Lai's loan amount significantly. If Yangzi Automobile expands its production further, it will inevitably need to increase its loan amount even more.

Tan Jincheng has always maintained a very cautious attitude towards bank loans, and has done a very good job of controlling the company's debt ratio and cash flow.

When cooperating with the government, everything is fine during the honeymoon period. However, if the cooperation does not go smoothly, every gift given before could become a knife in the company's development process.

The most painful thing about running a business is probably this: you have to maintain close cooperation with the government, but you also have to maintain a certain distance at all times. It's really hard to strike the right balance.

In just a few years, Flash Group has grown into a multi-billion dollar conglomerate. To say that it was completely compliant with regulations would be a joke.

The only thing Tan Jincheng could do was ensure that he didn't make any mistakes in the overall strategy. As for the minor problems in its execution, those were beyond his control.

Even though the benefits offered by Chuzhou City Investment Group were very tempting, Boss Tan dared not accept them.

"Actually, there's no need to rush. With the construction progressing so quickly, we can start construction once the actual data for the Yangtze River comes out in the second half of next year."

Next year, Yangzi Motors will need to invest much less. There's no need to build any more marketing channels, and advertising can be reduced appropriately. As for discounts, they can be adjusted according to market changes.

Once sales reach expectations, profitability is guaranteed. "Mr. Tan's investment philosophy is somewhat different from others. Most entrepreneurs wouldn't refuse such opportunities in this year's favorable situation."

When Du Jie realized he couldn't persuade him anymore, he stopped. The city hadn't explicitly required him to persuade them, and he didn't have the ability to convince a billionaire entrepreneur to change his business strategy.

"I usually prefer to expand only after each branch has its own revenue-generating capacity, which is much safer for the entire company's system."

FlashDrive has already grown fast enough; there's no need to keep pursuing rapid expansion. Strengthening its own foundation is the most important thing.

Besides, the current technology is relatively outdated. It's pointless to scale up too much now, as you'll still need to upgrade the technology later, and the investment required will be substantial. It's better to build it up slowly.

"Expand only after the company has its own revenue-generating capacity?"

"That's right. I don't know if Mr. Du has noticed, but each of our subsidiaries only expands after they have specific businesses. Even our Jinshidai, which has the biggest losses, is supported by Dexian Electronics."

Jinpeng and Jinyi correspond to import and export trade. Shanchi Technology goes without saying. Weilai Auto only made its next move after confirming the success of Yuechi A1.

Simply put, you only decide on your next investment direction when you have money in your own pocket.

A rich person must be able to hold onto their money. If they have 10,000 yuan in their pocket, they will buy a bag to treat themselves. If they have a monthly salary of 15,000 yuan, they will rent a house for 5000 yuan a month. They will never get rich.
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"The renderings are out?"

The day after he returned, Zhang Yong informed Boss Tan that the renderings of the bus based on Huanghai's pure electric technology had been completed, which was quite fast.

Boss Tan also excitedly visited the former S1 laboratory on Meishan Island, now the Weilai Technology Research Institute.

The Weilai Technology Research Institute, expanded from the S1 laboratory, brought together experts from the original Physics Research Institute, some of whom Zhang Yong brought from Futian, and some automotive experts left behind by the original Changfeng Group.

In addition, there were some Japanese technical talents brought over from Yu Nagasawa, including experts in automobiles, batteries, and all sorts of other fields—it was a real hodgepodge.

At this stage, Weilai can't recruit any more senior talents. These are the ones that can be used, and at least they managed to get the Yuechi A1 out, right?
"Yes, that's why we asked you, boss, to give it your approval as soon as it was finished."

"Haha, what can I control? Besides, buses are all pretty much the same, as long as they don't infringe on copyrights."

"No, Huanghai Bus has a good reputation nationwide. After so many years, it has accumulated technical expertise, and converting gasoline buses to electric ones is not difficult."

Zhang Yong said confidently that he had a lot of experience in this area of ​​large commercial vehicles.

"Okay, I'll take a look."

这是一款中型的公交客车，8540*2500*3070的尺寸，轴距是4700，大概能装55到65个人左右。

Nowadays, these buses seem a bit small. There are too many oversized buses running through the city, like the 783 and 753 buses that go from Beicang to Ningbo. They are ridiculously big.

However, according to Tan Jincheng's requirements, Huanghai Bus will focus more on designing medium-sized and smaller buses for its future public transport business.

With urbanization and the widespread use of private cars, large cities have subways and light rail, and super-large buses will gradually be phased out of the market. Taking Beicang District as an example, in the future, there will be more small buses.

"It looks pretty good, all square and neat. What about the specs?"

These things really do look pretty much the same. It depends on individual aesthetic preferences; some people prefer something more rounded, while Tan Jincheng prefers something that looks more square.

"In terms of configuration, we plan to adopt a fully load-bearing structure, a lightweight design, and a three-zone separation design. The battery pack will be from Jinshidai, and we currently use lithium iron phosphate batteries."

"In terms of publicity, we can appropriately promote the concept of environmental protection. I feel that this is a good point of publicity for buses."

Tan Jincheng smiled and nodded. Comrade Zhang has made significant progress. Now he knows to bring up marketing on his own initiative. It seems that Yuechi's advertising expenditure of over 100 million yuan has not been wasted.

Compared to hybrid and fuel cell vehicles on the market, Weilai is going straight for pure electric vehicles in the field of new energy vehicles. In the future, it may develop some range-extended vehicles, but it will definitely not be the kind of deceptive vehicles it is now.

Currently, apart from the pure electric series, most of the products on the market are experimental.

If this thing were actually sold to consumers, Tan Jincheng would feel like he was losing money; he would even feel a little embarrassed if it were sold to local governments to be used as buses.

Knowing the ultimate trend of new energy vehicles, Wei Laiye really didn't need to develop these experimental products; it was just a waste of time and slowed down his progress.

"Okay, let's do it this way. Let's get a few prototypes out as soon as possible so we can market them."

According to the progress of this year's policies, the first batch of car manufacturers to benefit from new energy buses will be established next year. Weilai Auto needs to speed up its pace and catch this train.

(End of this chapter)