Crazy Entertainment System

Chapter 549 Profit

The news broadcast on CCTV News has unsettled several car brands. Audi and Volkswagen have long been the preferred brands for official vehicles in China, but the emergence of Longteng Auto has shaken their positions.

While expressing understanding, after all, Longteng Auto is a local Chinese company, and the Chinese government naturally wants to support the development of local companies.

More importantly, the Ruilong model used for official vehicles is better looking than our own, and its configuration and technology are also more advanced.

With the added influence of the Longteng brand, they had no choice but to get moving.

But before they could even smooth things over, the official document from above had already arrived. All government vehicles were to be standard models from Longteng Motors, priced at 75% of the market price, and ordered centrally; all that was needed was an application.

Otherwise, once discovered, it will be dealt with seriously.

Most importantly, these buses are equipped with GPS tracking systems, and their routes are uploaded to a dedicated database that can be easily accessed to prevent misuse of public vehicles.

Most importantly, every quarter, Longteng Auto's personnel will randomly perform maintenance on Longteng Auto's route recording equipment.

This greatly ensures that official vehicles are not used for private purposes.

This situation is a major headache for countless politicians.

This reduces their earnings significantly, and more importantly, it makes their travel much more inconvenient, as they are constantly under surveillance.

Of course, they could choose to quit. But they couldn't bear to, because countless people were eyeing their positions.

To Chen Yu's surprise, the next day the government signed a contract with Longteng Automobile to order 1 Ruilong standard edition cars and 5000 Tiguan 2008 standard edition cars.

Prices are 25% of the market price.

Overall, the price is acceptable.

To Chen Yu's surprise, Huanghelou has actually established more than 8000 4S stores worldwide, and of course, it also cooperates with 4S stores in some local areas.

However, the reputations of these stores have stood the test of time.

Taxes, technology transfer fees, car manufacturer's profit on the whole vehicle, 4S store's profit, and the cost of the car are all things that are normally included in the price of a car.

However, Longteng Auto does not offer technology transfer fees, while joint venture automakers do. To be honest, the profit margin of 4S stores is not very high, around 5% to 10%.

Many people are surprised by this, thinking: How is that possible? The money earned from selling cars alone certainly wouldn't be enough to cover the expenses of an entire 4S store (rent, labor costs, equipment depreciation, utilities). But that's the reality. Currently, many 4S stores, due to insufficient funds, mortgage the vehicle registration certificates and master keys of their vehicles to banks for loans. They then redeem the certificates after the car is sold. However, there have been cases where the dealership is unable to redeem the vehicle registration certificates after selling the car, preventing the owner from registering the vehicle on time. Therefore, many 4S stores don't actually earn much profit from selling a single car; they mainly rely on frantically selling cars to get rebates from the manufacturer at the end of the year.

Of course, this doesn't mean that 4S stores can't make money. On the contrary, they can make money, but not mainly from selling cars. Instead, they make money from other businesses, such as insurance, interior decoration, vehicle registration, and other additional profit points.

Of course, many 4S stores also break the rules and refurbish and sell some accident cars, faulty cars, flood-damaged cars and other used cars as new.

This kind of thing happens frequently. Normally, from the time a new car leaves the factory until it reaches our customers, a total of 38% in taxes and fees needs to be paid. However, for many reasons, Longteng Auto's tax rate is not that high, only around 18%.

This greatly increased Longteng Auto's profits and gave Longteng Auto sufficient room for maneuver.

What surprised Chen Yu the most was that after the Longteng Auto launch event, Future Bank received more than 300 million inquiries from customers about car loan interest rates.

Fortunately, Future Bank was prepared and responded to these challenges in a timely manner.

Although the car has not yet been launched, as many as 50 users have already signed pre-order contracts.

The personal credit loans offered by banks in the future have been accepted by countless depositors, who have opened accounts one after another.

Personal loans have a grace period for repayment, which is much better than credit cards, whose late fees and interest calculations are terrifying.

Personal credit loans, on the other hand, are very cost-effective.

At the same time, Alipay has successfully entered the world market, launched many financial services in conjunction with Future Bank, and cooperated with banks in other countries.

Alipay's growth has undoubtedly made it a hot commodity for many investors, who have extended olive branches to it, but Alipay has not taken much action in response.

Instead, they sought cooperation, with Citibank, JPMorgan Chase, HSBC, and others seeking partnerships with Alipay.

However, these capitalists were very profit-driven and demanded certain transaction fees. Prolonged negotiations failed to persuade the banks to back down; they insisted on fees ranging from 0.1% to 0.3%. Alipay, heeding Chen Yu's advice, agreed, but publicly announced that this was the companies' demand. In the future, banks would not be required to pay any transaction fees.

This move has drawn dissatisfaction from countless depositors, who are now turning their attention to banks in the future.

After all, no one dislikes free things, whether they are Chinese or Westerners.

The banks' management quickly noticed this situation because they found that depositors were less active and many accounts were seeing a decrease in deposits.

If it's just a small, occasional occurrence, that's fine, but if this number keeps increasing, then it's a big problem.

It was quickly discovered that the depositors' funds had been transferred to Future Bank.

Although these depositors don't have much money, there are many of them.

There's only one reason for this: transfers are free for users within a certain spending limit. As long as the currency isn't exchanged for other countries and the transaction amount doesn't exceed the usual daily limit, it's free.

Most importantly, Alipay has integrated with third-party payment channels, and many online payment platforms support it. Although Alipay charges a fee, the convenience and profits it provides are substantial.

With the combined power of three major express delivery companies—One Step: a US-based express delivery group, Windspeed: a European express delivery group, and YTO Express: an Asian express delivery group—global shopping has become a widespread phenomenon, and e-commerce has begun to flourish globally.

The biggest problem with e-commerce is delivery.

The widespread adoption of e-commerce has led to the rapid development of third-party payment, and Alipay, the leading third-party payment platform, has seized this opportunity to enter the global payment market.