2003: Starting with Foreign Trade

Chapter 860 Who to sell it to?

Li Bing's request was simple: he wanted to obtain a car production license to ensure that the models he developed could be legally put into production.

He didn't care about anything except the production license, and he didn't care how Tan Jincheng negotiated with Lifan.

"That piece of paper was so important. Back then, we tried every possible method to get that piece of paper. It was much more difficult back then than it is now."

"But I'd like to ask Li Bing, why didn't you lend Wei Lai his readily available qualifications, and instead chose to acquire ours?"

Back then, in order to obtain a car production license, Boss Yin famously declared that he would even be someone else's "son." They initially wanted to borrow Geely's license, but Geely's asking price was too high, and it also restricted their brand development, so they ultimately did not agree.

Li Bing smiled and said, "We did consider this issue at the time, but since President Tan has invested in our company, if we were to rely on their production qualifications, it would give the impression of us being a subsidiary to the investors, which would be detrimental to our subsequent financing."

"In addition, our production capacity is also somewhat limited. For the time being, we do not have the ability to undertake whole vehicle manufacturing."

Weilai's new energy vehicle production capacity plan for this year is between 12 and 15 vehicles. This capacity is still quite tight for Weilai's current production capacity. This is one aspect, but the main reason is that Tan Jincheng is unwilling to do contract manufacturing.

If a domestic brand is doing well, who would want to do OEM manufacturing?

Mr. Yin nodded. Given that Wei Lai, which has always been cautious about expansion, had announced a recruitment plan at the beginning of the year, the tight production capacity was practically written all over their faces. It was normal for them not to accept OEM orders.

"Mr. Li can discuss the specifics with Mr. Mou. In principle, I am open to the sale of Lifan Motors' business."

When a company faces an operational crisis, selling its assets is within the normal scope of business operations. It is reasonable for Mr. Yin to agree to negotiations. As an entrepreneur who has successfully transformed his business multiple times, he must understand this point.

Lifan's problems are not simple. Its main motorcycle business is shrinking rapidly under the pressure of policy changes, and other businesses are not progressing well. Its real estate business cannot expand beyond Chongqing and can only operate as a local player. In addition, the high leverage is beyond the company's ability to sustain itself, and there is little future to be had.

The automotive business, which is of utmost importance to Lifan Motors, is riddled with deep-seated problems. The failure of Lifan Motors in the complete vehicle business was almost predictable. This is not due to a single factor, and it is already very difficult to make changes.

"I'm quite direct. Lifan's problems are very difficult to solve. To put it bluntly, the brand is ruined. Selling assets is the best way to deal with it."

On his first meal in the mountain city, Boss Tan still didn't get to eat hot pot. Boss Yin was quite hospitable and arranged a lavish welcome dinner. It seems that entrepreneurs who come from humble backgrounds particularly enjoy such things.

Unlike entrepreneurs of the new era, their generation was truly distinctive.

"Mr. Tan is certainly straightforward, but I like it when he says that! Here, let me buy you a drink."

Young Master Yin didn't mind Tan Jincheng's directness at all and just laughed it off.

This young man, who is over 40 years old, gives the impression of being a spoiled brat, but that is not the case at all. He genuinely loves luxury cars, and he just revealed that he is a Lotus Lotus series owner and has a lot of luxury brand cars at home.

However, his life was not as extravagant and dissolute as one might imagine. Furthermore, although he explicitly stated that he would not take over the group company, the family assets were under his management, and he had maintained a good separation from the group company in terms of shareholding.

He was very clever to think that no matter how well the company performed or whether it went bankrupt, it would not affect his and his family's assets.

Perhaps the image of a spoiled brat was deliberately created by him, just like Xiao Wang; this is the persona that belongs to these second-generation rich kids.

However, Mr. Yin's daughter, who was slated to take over the business, was somewhat unconvinced by Tan Jincheng's statement. This young lady was two years younger than Tan Jincheng and was currently working at the group company, where she was very likely to take over the company in the future.

"I may not be able to put it nicely, and you may think that I am trying to drive down the price in order to acquire the company, but in terms of operating costs, it is much more difficult to revive Lifan Motors than to sell it directly."

Mr. Yin listened with a smile without saying a word. He had specially organized this dinner party for him. Tan Jincheng was very capable in both business management and capital operation, and he wanted to hear Tan Jincheng's views on Lifan.

"Is it not possible to have Mr. Tan come?"

"To be honest, no. The market competition and consumer attitudes have changed dramatically compared to a decade or so ago. A brand's reputation and image in the minds of consumers are extremely important."

"If Lifan wants to turn around its image, it must develop its own technology. However, Lifan is not capable of doing so at present and would have to invest a lot of money. Such a large investment would be better spent creating a new brand."

"In the context of global market competition, technology and innovation are the keys to success."

Tan Jincheng's meaning is very clear: this brand is already ruined. Instead of investing a lot of manpower and resources to revive it, it would be better to start from scratch. This is actually the same idea he had when he acquired Yangzi Automobile.

After taking over, they sealed off the inventory and reorganized the Feiyang brand, which had a poor market reputation, and created a new brand by reorganizing the production line and supply chain.

Of course, his directness was also a deliberate attempt to pressure Li Bing to lower the price; belittling the opponent during negotiations is also a tactic.

Yin Suowei was still somewhat unconvinced. As a fellow post-80s generation, she was a returnee from overseas with management experience, while Tan Jincheng was just a high school graduate. Before the banquet, her father's attitude of asking her and her brother to learn from Tan Jincheng made her somewhat eager to compete.

Tan Jincheng's ruthless and domineering attitude made her very uncomfortable. Her attitude towards saving Li Fan was quite different from her brother's.

"I wonder if Wei Lai has any chance to reach some cooperation with Lifan in the field of new energy vehicles, such as batteries and charging piles."

Mr. Yin interrupted his daughter, who was about to ask more questions. He had just finished discussing the sale of Wenjie's car license with You Mou, so he didn't need to worry about that. What he was most concerned about was actually the cooperation with Wei Lai.

Weilai has just reached a strategic cooperation framework agreement with Dongfeng, and there are also rumors that SAIC intends to establish a joint venture with Weilai. In terms of status in the new energy field, Weilai is a powerful force, both in terms of capital and background.

Wen Jie wanted to acquire Li Fan's automobile production qualifications. This matter did not require an investor like Tan Jincheng to come forward. It is likely that his trip to Shancheng was not simply to accompany Li Bing to negotiate.

"Weilai has always maintained an open and cooperative attitude. We welcome cooperation from all our peers in the field of new energy, and I welcome cooperation with your company."

Weilai has its own charging pile project, but with such a large land area, it is difficult to succeed by relying on just one company. Cooperating with more charging pile companies is also one of Weilai's business strategies.

Lifan has many charging stations in Chongqing and is a local powerhouse. If a cooperation can be reached, it will be very beneficial for Weilai's promotion in the southwest region.

"To be honest, the main reason I came to Chongqing this time is to investigate the market in the southwest region. Mr. Yin should know that pickup trucks have been deregulated in some cities. I came here to investigate the Yangtze Automobile project."

Yangzi Pickup plans to expand its production capacity to around 200,000 vehicles per year. Tan Jincheng plans to establish a production base in the southwest region with an annual capacity of around 50,000 vehicles, and further expand the production base in Chuzhou, forming two major production bases in the north and south, thus finalizing the scale of Yangzi Pickup.

With an annual production capacity of 20 vehicles, and given Yangzi Automobile's current market share, it is sufficient to ensure a balance between production and sales until 2023.

In addition, the pickup truck market also plans to develop some hybrid models to adapt to future market changes.

"Pickup trucks? Mr. Tan's market acumen is truly remarkable. Indeed, the Southwest market is an excellent springboard for pickup trucks."

The varied terrain of the Southwest region is indeed more suitable for pickup trucks and all-terrain SUVs, including off-road vehicles. As soon as the policies loosened a little, Tan Jincheng dared to expand production and expand his business. In addition to his high market sensitivity, he is also very bold.

Of course, if done well, it can also be a very considerable market. Given Yangzi Automobile's current market share, once this market is opened up on a large scale, it will become another subsidiary with revenue in the tens of billions.

Tan Jincheng revealed Yangzi Automobile's production capacity plan to him, and he knew his intention.

Besides valuing the resources in Li Fan's hands, he probably also intended to use him to spread rumors and attract the attention of local governments.

It seems there's a good chance of reaching a cooperation agreement. Boss Yin smiled and said, "Eat your food, eat your food. Don't just chat. You two should offer a toast. Don't just sit there."

At the dinner, all three parties expressed their respective needs and heard what they wanted to hear, so the guests and hosts had a pleasant time.

"What do you think?"

After seeing off Tan Jincheng and Li Bing's group, the three members of the Yin family sat upright in the living room. Naturally, Mr. Yin did not ask his children about specific business matters, nor did he ask about Li Bing.

It's not that I look down on Li Bing, but from any perspective, Tan Jincheng is more important to the company and their family.

To put it another way, Tan Jincheng was capable of taking over the entire Lifan Motors business, while Li Bing was clearly only interested in the production license, or rather, he could only afford the production license and did not have the ability to digest the entire business system.

"He has a strong presence and is very sharp. He looks at problems very directly. Xiao Wei, don't be unconvinced. Although what he said didn't give us any face, it was the truth. Besides, his solution was actually the best one."

Young Master Yin manages the family assets and has invested in popular industries such as entertainment and gaming, earning the family a considerable amount of money. These businesses are all under his personal name, far from what the outside world sees.

A multi-billion dollar corporation saying they don't want it and then really not? Do they really think they're stupid?

“Mr. Tan is right. We still have the opportunity to negotiate, but we won’t be able to do so in two years. My opinion is that we should sell if the price is right.”

"Of course, if we want to maintain a further cooperative relationship with Wei, I think it would be best to sell the automobile production qualification to President Li first, and then we can slowly integrate other businesses. Not playing the whole vehicle business does not mean withdrawing from the new energy industry."

"This is just my suggestion. You can decide for yourselves what to think. I won't interfere. Speaking of which, I'm quite interested in Wei Lai's ES8. I'll go find Boss Tan tomorrow to get one to try out."

Young Master Yin may seem carefree and nonchalant, but his words reveal a different story and hold some truth. Boss Yin is also considering this issue.

Yes, they still have the ability to bargain now, but in two years they really won't have the right to bargain anymore. The competition is getting more and more intense. In fact, besides Weilai, they also have connections with Geely.

Although there was some unpleasantness between the two sides regarding the issue of automobile production qualifications back then, so many years have passed, and that matter is long gone.

"Selling is definitely going to happen, but what do you think about selling it to Geely or Weilai?"

Mr. Yin asked about his youngest daughter, who is directly involved in the company's operations and is more familiar with the company's business.

“In terms of strength, Geely is stronger, but from the perspective of cooperation, it is better to cooperate with Weilai. Although we are not familiar with this Mr. Tan, he has a very good reputation in the industry, and many parts manufacturers are eager to cooperate with him.”

"In addition, this Mr. Tan is very generous with money. He rarely owes money when acquiring assets and always pays on time. He is also very particular about subsequent cooperation. Most importantly, he is very capable in the capital market. If we cooperate with him, we can get some help from the capital market."

Each has its own advantages. Geely has a strong background and its overseas business, especially in Russia, can provide a lot of help to the group. However, if you cooperate with them, you will have no say in the matter.

Weilai's overseas business is currently mainly developing in Southeast Asia and Europe. They haven't done any development in Russia. Their brand is already ruined in Southeast Asia, and their quality in Europe is simply unacceptable.

The scandal this year dealt a huge blow to the brand; this month's sales are almost halved compared to last year.

Although she harbored a competitive spirit, Miss Yin secretly admired Tan Jincheng. Like her father, he had started from scratch and built his business into a thriving enterprise, a feat she could not match.

At the same time, back at the hotel, Tan Jincheng and Li Bing were also discussing the acquisition.

"From the current perspective, you should have no problem obtaining the car production qualification smoothly. The only difference is the price you're asking for. These things aren't cheap these days."

When Weilai acquired Yangzi Automobile, it was mainly to solve the problem of automobile production qualifications. Although prices had risen a lot at that time, they were still incredibly cheap compared to now.

Li Bing sighed, "In the past two years, a large number of zombie companies have been dealt with, which has made automobile production qualifications more and more expensive. At the current market price, it would cost about 500 to 600 million yuan to acquire one, which is indeed not cheap."

In the past, when a company went bankrupt, its qualifications might be retained for a period of time. Andar survived for several years in this way. However, this is definitely not the case now. Bankrupt companies will have their production qualifications revoked directly.

"Then let's negotiate at this price. It doesn't matter if it's a little more expensive. Lifan can hold on for another two or three years. They're not in a hurry, so you're not either."

"It's a bit difficult for me to buy their production base."

A production base is not just the factory buildings and equipment inside; those assets are not worth much. The most valuable part is the land. Nowadays, many companies take advantage of expansion to acquire large amounts of land in order to increase its value.

The most crucial question is whether Lifan is willing to sell these land plots.

Lifan is indeed a hot potato, but they have a lot of high-quality land resources. For example, their Yuanyang factory site is located in Liangjiang New Area, a mountain city with the automotive industry as its main industry, with a net land area of ​​about 740 acres.

According to estimates, if the Yuanyang plot were to be auctioned, its total value would exceed 100 billion yuan.

Although Tan Jincheng doesn't actively pursue commercial real estate, he won't reject real estate value. In terms of acquisition, this piece of land is still very attractive to Wei Lai, and if he wants to acquire it, this piece of land is a must.

We will absolutely not acquire the land in the Yuanyang plot if we cannot secure it.

"Haha, your acquisition is indeed more difficult than ours. Everyone knows that land is valuable, especially in a mountainous city, a major town in the southwest region."

"Let's take it slow. But when we're negotiating, we should try to communicate with President Yin as much as possible. If that doesn't work, we can also communicate with his daughter. I think the management team has limited influence."

At tonight's dinner, Tan Jincheng also discerned some underlying issues: although Boss Yin claimed to be handing over the company to a so-called professional management team, he actually still favored family succession.

Tan Jincheng really couldn't approve of this operating model. The worst thing in running a business is to be indecisive, especially when it comes to the issue of power.

Compared to the last time I went to Foshan to discuss cooperation with Midea, the other party didn't have so many tricks up their sleeve. Whatever Fang Hongbo said went. The cooperation model was quite simple. Fang Hongbo simply took them to visit each other's homes, and the actual controller had nothing to do with the rest.

This is the true professional manager management model.

"Indeed, I noticed that too. Their so-called professional management team doesn't have as much say as his daughter, so negotiations will be a bit difficult."

"Let's talk it over slowly, there's no rush."

There's no rush. Yangzi Automobile's current production capacity is sufficient. The lifting of restrictions is only a pilot program, and the actual lifting of restrictions may take several more years. Besides, Chuzhou also has a need to expand production.

Monday, April 2th.

On the fourth day after Tan Jincheng arrived in Chongqing, having basically reached a cooperation agreement with Boss Yin, Zhu Pei, the new president of Yangzi Automobile, arrived in Chongqing to participate in subsequent negotiations. This cooperation is based on Yangzi Automobile as the main entity and the parent company, Weilai Group, as the auxiliary entity.

That said, Yangzi Automobile, which has been quietly making a fortune over the years, has also accumulated some wealth, and it's time to spend some of it.

"The rest of the negotiations are up to you. There are two basic principles: one is the land for the Yuanyang factory, and the other is the financial license. Without these two, there's no point in discussing the acquisition."

Tan Jincheng will not be involved in the specific negotiations, just as Boss Yin will not be involved. Once these top decision-makers get involved, there will be no room for maneuver.

"Okay, boss, are you going back to Ningbo?"

"Yes, what's wrong?"

"Why don't you take a trip to Chuzhou before you go back? Our operation this time is quite significant, and the city would like to discuss it with you."

The expansion and acquisition of Yangzi Automobile were both a pleasant surprise and a cause for celebration for the Chuzhou local government. The pleasant surprise was that after so many years, Mr. Tan had finally turned his attention back to Yangzi Automobile, bringing new vitality to the company.

What's surprising is that the other party actually went to such a faraway place as Chongqing to build a base. Building a base is not a problem, but the Chuzhou government, especially the Langya District government, would prefer that Boss Tan invest more resources in Chuzhou.

"Okay, I understand. I'll go there by another route."

The main reason for this trip back is to attend the shareholders' meeting, which is the annual report season. Both A-share listed companies require him to attend the shareholders' meeting and investor conference call. In addition, he needs to go to Beijing for a meeting every March.

"There's a bit of unnecessary worry. Our industrial focus will always be the Yangtze River Delta. Chuzhou's industrial status has been rising in the past two years, so how could we possibly give it up?"

"Yes, that's what I told the city and district officials, but they don't believe me. You should reassure them yourself, boss."

Chuzhou's geographical location is indeed excellent. As part of the Yangtze River Delta industrial chain, it is located between Luzhou and Huizhou, not far from Wuhu and Zhejiang Province, and borders northern Anhui. In addition, it is now one of the photovoltaic industry bases. How could Tan Jincheng possibly give up his investment in Chuzhou?

"Oh, by the way, when you talk to them, try to be careful about dealing with the media to avoid causing stock price fluctuations."

Normally, listed companies would need to suspend trading when selling assets like this, but Lifan has not made any moves so far, and its stock is still being traded on the secondary market. Tan Jincheng suspects that they are trying to take this opportunity to manipulate the stock price.

Lifan's stock price has indeed risen significantly in the past few days, with a rebound of over 16%.

Sigh, Mr. Yin isn't as kind as Li Jianxin.

The two circuit breakers at the start of the year foreshadowed an eventful 2016 for the A-share market. Under the strict regulatory policies of the new head of the China Securities Regulatory Commission, the market, like the zodiac animal of the year, was poised for dramatic ups and downs.

Just like last year, Weilai once again announced its performance results earlier than its peers this year.

After returning to Ningbo from Chuzhou, on February 29th after the market closed, Weilai released its 2015 annual report and its first-quarter 2016 earnings forecast.

2015年度，尉来整体营收从2014年的390.67亿元飙升至767.32亿元，其中动力电池板块业务从2014年的8.67亿元增长至57.03亿元，净利润从5443万元增长至9.306亿元。

Weilai's overall net profit increased from 50.06 billion yuan in 2014 to 86.39 billion yuan, with revenue nearly doubling and net profit growth rate reaching 72.57%!

"In 2015, the only domestic brand that made more money than us was Great Wall Motors, but Great Wall Motors doesn't have a power battery business. Also, our revenue is close to Great Wall Motors', so it looks like we won't have to wait three years, right?"

As soon as the official annual report was released, Boss Tan immediately found Zhang Li, with a smile on his face like that of a treacherous minister.

The rebound that lasted throughout February ended in a decline in the last three trading days. The Shanghai Composite Index closed at 2687.98 points, while the ChiNext Index fell by 5.71%, hitting a new low for the previous month at 1880.15 points.

"Wei Lai's financial report came at just the right time; this kid knows politics."

(End of this chapter)