I want to be emperor

Chapter 1071 The tragic automobile industry

The automobile industry is a huge pie, and there are many people who are interested in it and want to participate in it.

However, most people or companies do not have the strength or courage to participate in vehicle manufacturing... Even if it is only a third-party manufacturer in the small workshop model with the lowest technical content, in fact it is a high-tech industry, not a bit hard. You can't play with your strength.

Although you can purchase parts such as engines and gearboxes, and even the car casing can be entrusted to other factories for processing...but you still have to design the chassis, and then assemble the many parts.

Just designing and assembling a car chassis is not a simple matter.

Therefore, any company that can produce a complete vehicle these days, even if it is an assembled vehicle that relies on purchasing all parts, still has hard power.

If you want to do something on a slightly larger scale and adopt a mass production model, the investment required can easily reach hundreds of thousands.

The North American Automobile Company run by Song Erniu is a typical example... You have to say how high its technical content is, but in fact it is not. All core parts are purchased.

But if you want to say that its technical content is low, that is even more nonsense. North American Automobile Company has set up an automobile R&D center in Songjiang and has a R&D team of more than 100 people.

We haven't even seen a prototype of the car yet, but hundreds of thousands of dollars have been spent on it.

However, the auto parts business is relatively simple, and the market is also very large.

For example, Songjiang Xihu Automobile Company is a typical third-party automobile manufacturer with a small workshop model. The annual output is only a few dozen vehicles. The production model adopts the manual production model of a manual workshop, but its founder is Tangshan Machinery Company. There are former core engineers in the automotive team and more than a dozen technical backbones in the automotive industry.

Therefore, in the automobile business, the threshold is actually very high. You can’t just get in if you want to get in... If ordinary companies rush in rashly, you will find that nothing can be done.

For a long time, the operating income of Suzhou River Hotel, which Wang Liqing personally managed and operated, was not even enough to cover the hotel's operating costs, let alone make money or even recover the investment cost of more than one million yuan.

This skyscraper luxury hotel with a height of more than 100 meters has certainly made the Wang couple's social reputation rise again, making them important figures in the upper class society of Songjiang Prefecture.

Parts in other parts of the car are basically purchased externally, which involves a very large auto parts supply market.

Many other seemingly inconspicuous small car assembly workshops are often led by technical bosses and have their own core technical teams. However, they have not found large-scale investment for a while, and they have little money.

To be honest, their technical capabilities are almost less than the so-called R&D team of more than 100 people recruited by Song Erniu... It’s just that I don’t have much money and can’t find investment with good conditions, so I won’t be able to build a large-scale project for a while. The mass production factories can only adopt the small-scale and high-price customization model.

Quite, relatively speaking, some small-scale handicraft workshops are relatively simple, but this simplicity is also relative.

As for ordinary people...don't even think about it.

But Mrs. Wang is already frightened by her husband's business operations... He is already several decades old, and he is still thinking about starting a business every day. I feel tired even if he is tired.

A car is a large and complex industrial consumer product that requires thousands or even tens of thousands of parts.

Mrs. Wang has been engaged in real estate and hotels all her life...the only investment failure was when she upgraded and built the super luxurious Suzhou River Hotel.

But from an investment point of view, after spending millions of dollars, I barely made a few cents and almost lost all my pants...

Therefore, many people nowadays are aiming at this auto parts market... Even Wang Liqing, who is a soft ricer, has seen the opportunity and wants to get involved.

Because if you want to produce all parts yourself, it is basically no different from building a complete industrial system yourself.

Subsequently, Mrs. Wang fired her husband, found the old operation team for operation, and changed the multiple floors at the bottom of the building into luxury jewelry manufacturers and luxury restaurants. After comprehensive operations, it was considered that there was improvement... But it is still a long way from recovering the investment cost.

In the past, when I was young, I talked about making cotton yarn, but when I became middle-aged, I talked about making new cotton yarn... When I was in my fifties, I talked about building a super luxury hotel, and wanted to build the first luxury hotel in Songjiang... As a result, the cotton yarn factory that I have been working on all my life is still the same. Half-dead, in the end I couldn’t even afford a few buildings with the money I earned...

With so many parts, it is impossible for car manufacturers to produce all parts themselves... they don't have the ability.

The luxury hotel business is even worse... Suzhou River Hotel is one of the top luxury hotels in Songjiang Prefecture. Its more than 100-meter-high building has also made it one of the current landmark buildings of Songjiang Prefecture.

As powerful as the four major automobile manufacturers, they seem to develop and produce engines and gearboxes by themselves... but in fact, even many parts of the engine and gearbox are purchased from external sources.

After this experience, Mrs. Wang couldn't believe Wang Liqing anymore... You just rested if nothing happened. If you really couldn't stop, go to your shabby cotton yarn factory.

As for our family's real property, you don't have to deal with it. You have to leave it to the children.

Wang Liqing was helpless about this...but he was optimistic about the auto parts business. He even thought about the specific direction and decided to make sofas for cars!

For this reason, I once wanted to sell the cotton yarn factory to raise money to start new business... but I gave up in the end.

Anhua Textile Company was his life's work... and even half of his father-in-law's hard work had to be added on top of that. The cotton yarn factory that two generations had worked hard to run was no longer profitable, so how could he just give up?

Wang Liqing of Anhua Textile Company wanted to do it, but couldn't... But his former subordinate Sun Xu was different.

Sun Xu has long been involved in the automotive supply chain, but he is not a first-tier supplier, but a second-tier supplier.

After Sun Xu started his own business, he mainly engaged in the nitrocellulose business, and developed the first rayon in the empire... and inadvertently developed a nitrocellulose stabilizer, which was eventually used in the national defense industry. Among smoke-free medicine.

In addition to gaining huge social fame, Sun Xu also received huge patent sharing fees... Every kilogram of smokeless gunpowder currently produced in the Dachu Empire... has to pay a certain amount of patent fees to Sun Xu.

And the demand for the empire's military smokeless gunpowder is huge... Sun Xu's patent income is also very large at one time.

After getting money, Sun Xu continued to conduct research and development in the field of nitrocellulose, and then came up with a fairly good transparent plastic.

Although plastic is no longer a new product, many domestic manufacturers have developed and produced it, but different plastics are different.

The plastic he made has good transparency and relatively good toughness... In the end, his plastic was selected by many glass manufacturers to produce laminated shatterproof glass... This was also one of the main uses of early synthetic plastics. .

The main use scenarios of these contemporary laminated shatterproof glass are as windshields on carriages and cars.

Therefore, Sun Xu had actually passively entered the automobile supply chain several years ago, but he himself was still a belated observer...

After all, Sun Xu is currently engaged in synthetic materials, and his main business is rayon and synthetic plastics... He is thousands of miles away from the car.

But this is the automobile industry... It seems to be just a mechanical product, but in fact this thing is a comprehensive industrial product from all walks of life.

Chemical industry, machinery, steel, precision processing and even textiles, etc... Almost all industrial fields can be related to cars after twists and turns.

The arrival of Hekou Machinery Company is like a huge cake falling in Songjiang Prefecture, attracting competition from many automobile-related companies in Songjiang Prefecture and even surrounding areas, even the financial industry is no exception! Everyone knows that building a car is expensive...especially for large car manufacturers like the four major car companies that develop their own core components. To set up R&D and factories, it costs money like water, millions and millions. Throwing money down is the most basic thing.

For example, a comprehensive factory with an annual output of 100,000 vehicles... coupled with corresponding engine and gearbox factories. A factory investment of this level can start from two to three million yuan... This is just the hardware investment of the factory. This does not include car research and development expenses.

And the expense of automobile research and development is the bulk!

Almost every one of the four major automobile manufacturers spends at least millions on research and development expenses every year. It’s scary!

So, everyone knows that Hekou Machinery Company is short of money... very short of money.

But everyone also knows that Hekou Machinery Company will be very profitable in the future, very profitable... As the only four manufacturers in the contemporary Chu Empire that have controlled all the corresponding core basic patents such as gasoline engines and gearboxes... To be honest Yes, even if Hekou Machinery Company has nothing else, just selling these patented intangible assets... I am afraid it can be sold for tens of millions of yuan!

It is estimated that a large number of domestic super companies will be unable to resist the acquisition, making themselves one of the four major automobile manufacturers and gaining one of the four tickets to the future multi-billion automobile market.

Under such circumstances, Hekou Machinery Company has always been the best customer of various large enterprises, investment funds and even banks.

However, although people give money, it is not given in vain... For example, those large companies and investment funds, once they invest money, they will get shares.

As for the bank, they are interested in your interest... and they are not worried that you will not have the money to pay back. There are patent assets worth tens of millions of dollars there, and the bank is very relieved.

However, these ordinary financial institutions outside were unable to find any opportunities in the end... because Hekou Machinery Company does not offer external financing at all now!

As one of the conditions for moving into Songjiang, the Songjiang Prefectural Government provided a guarantee and fully subsidized the interest. Songjiang Financial Bank provided a one-time loan of up to three million yuan to Hekou Machinery Company.

Coupled with a series of various tax reductions and exemptions, etc., it can bring hundreds of thousands of extra profits to Hekou Machinery Company's existing business every year.

As a result, Hekou Machinery Company's pockets were replenished, and they continued to recruit troops for the research and development of electronic engines... To be honest, this thing was almost becoming a worry for them.

Among the four major domestic automobile manufacturers, they are the only ones still developing backward heat pipe ignition engines. Even Lee Power Company has developed a closed ignition engine... Although it is a bit inferior, they still use electronic ignition.

Under such circumstances, both the management and the technical R&D team of Hekou Machinery Company are under great pressure.

How should I put it, if millions of R&D funds are spent every year, the results must be seen... Otherwise, we cannot explain it to a large number of ordinary investors and the Ministry of Industry above!

In the past, it was said that there was great competition in Liaodong, and the unfairness of the parents resulted in disadvantages in all aspects... Okay, now I have changed your parents, and they are also super rich, with an interest-free loan of three million You get what you say, and the tax policy is that Songjiang locals will give you money, so that you can be truly tax-free.

The land used to build the factory will be given to you by Songjiang for free, without even taking half a copper... You know, this is Songjiang's land, so it's very expensive.

Other companies want to build factories in Songjiang. If they want to obtain such a large piece of land in a good location to build factories, it is not easy even to pay them.

But Hekou Machinery Company got it directly for free.

In short, various external environments have been created for you now. If you can't come up with this damn engine, many people will be angry.

With so many people angry, Hekou Machinery Company will naturally not have any impact, let alone go bankrupt... but the management will most likely lose their jobs.

Therefore, in recent times, the management of Hekou Machinery Company has been under great pressure, especially several big bosses in the technical department, who did not even return home and moved directly into the laboratory.

Under this heavy pressure, and more importantly, their years of technology accumulation finally allowed Hekou Machinery Company to achieve a breakthrough.

In the spring and April of Chengshun's fiftieth year, Songjiang Hekou Machinery Company's shares were suddenly temporarily suspended from trading on the Songjiang Stock Exchange, and all transactions were stopped.

The next day, Songjiang Hekou Machinery Company officially held a press conference and announced that they had made a breakthrough in electronic ignition engine technology and successfully developed a spark plug electronic ignition engine with fully independent technical patents.

And displayed their engine prototype at the press conference.

At the same time, they announced that they will use the newly developed engines to launch a variety of cars, tractors, and trucks on the market in the next few months.

Subsequently, the shares of Hekou Machinery Company resumed trading and were allowed to trade... and then experienced a huge surge.

After the stock price stabilized three days later, the price had tripled compared to three days ago!

As Hekou Machinery Company also made a breakthrough in spark plug electronic ignition engine technology, the pressure was suddenly put on the other three automobile manufacturers.

Let's not talk about Li's Power Company. They still have many core and key technologies that they have not yet mastered. They have not even developed the gearbox yet. It is still early to start the complete vehicle business, so it seems to have an impact and pressure, but In fact, people don’t have to worry about debts.

But for Tangshan Machinery Company and Liaodong Machinery Company, this is big bad news!

Because of Hekou Machinery Company, they already have the most advanced and most cost-effective gearbox technology in the world... In the past, they claimed to sell gearboxes and send engines...

And now they have developed an electronic ignition engine, which is equivalent to solving the last pain point.

When their new engine and excellent gearbox are combined... it can bring huge market competitive advantages.

After discussing the news for several days, the executives of Tangshan Machinery Company made a decision: the prices of existing products will be reduced across the board, not only the prices of complete vehicles, but also the prices of core components such as engines and gearboxes for export!

At the same time, we will accelerate the research and development of new generation engines, gearboxes, and automobile chassis, and create a new breakthrough car platform within three years.

Liaodong Machinery Company saw this situation and promptly followed up with a price reduction...

These two companies are considered pioneers, with lower investment costs in the past, and they have also made a lot of money through the Red Sea period in recent years... Now, with new factories being built one after another, output has been further increased, and production costs have been further reduced, it is just right Let’s have a price war!

Directly lowering prices and opening up a larger market capacity, it can also squeeze Hekou Machinery Company's new car market. It is a good thing that kills two birds with one stone... In fact, even without Hekou Machinery Company's technological breakthrough, they would still choose it in a year and a half. Lower prices to expand market capacity.

Not many people can afford a car that costs 600 yuan, and the market is too small.

But for a car that costs RMB 300, even an ordinary high-income family can consider buying one, and looking across the country, there are many high-income families.

The price difference between the two seems to be only double, but according to the analysis of those economic analysts, the market changes caused by it are more than ten times!

As for Hekou Machinery Company, the new car equipped with their self-developed electronic ignition engine has not yet been launched on the market, but it has already faced major challenges... Will it follow the price reduction? But they have just started, and the initial production costs are not low... But if they don't follow up with price cuts, sales may not meet expectations.

This puts Hekou Machinery Company in a bit of a dilemma.

The automobile industry in the Dachu Empire also ushered in fierce competition for the first time!

This kind of price competition has appeared in many industries. The most similar one should be the previous steam engine industry. In the past, the three major steam engine manufacturers also suffered a bloody blow.

The competition between the three major steam engine manufacturers has brought better and better, cheaper and easier-to-use steam engines to the empire.

Now, a similar story is coming to the automotive industry.

(End of this chapter)