The Industrial Giant Reborn.

Chapter 341 Parts Localization Solutions

[The previous chapter was sealed, and it should be released in a few days. 】

"Localization is indeed a big problem. I am very willing to localize production, but in the automotive industry, most of the parts are actually produced by suppliers. Although our auto factories have certain rights to manage them, we want to They all come to China to build factories, which is very difficult, and it is basically impossible for most of them to come here." Chen Zhiwen shook his head and said.

Why does China want foreign-funded car companies to produce domestically? Apart from wanting to learn the technology of car production, another reason is that when the economy develops, the domestic demand for cars will increase, and the flow of people will also increase. High, but also need factors such as efficiency.

But large-scale imports are too expensive, because importing a car is a pure foreign exchange worth a car, and if the car is produced domestically, at least in terms of labor, there is no need to pay foreign exchange, but only This is still not enough. The labor of the automobile factory is not high in the cost of the whole vehicle, and the highest is the various parts.

If various parts and components can be produced by itself, it can save a lot of foreign exchange and at the same time strengthen the capabilities of the domestic auto industry.

However, the automobile industry is a very large industrial chain, involving almost all technologies except biology. In a normal automobile industry, there are at least hundreds of first-tier suppliers (manufacturers who directly supply automobile factories) , and these hundreds of first-tier suppliers may correspond to tens of thousands of second-tier suppliers (for first-tier suppliers), and there are also third-tier and fourth-tier suppliers, and most of them provide the most basic raw materials. For example, high-performance steel, plastic granule raw materials, etc., the entire industrial chain is huge, not to mention AMC, even the public, it is impossible to move these factories here, and even some of them cannot do it, because these parts companies, except for a few, are large Some of them rely on several car companies to survive. If they move to China, they can only serve one car company. Considering factors such as language barriers and poor technical foundation in the Mainland, it is not easy to solve.

"Mr. Chen, according to the intention of the domestic central government, in the initial stage, the joint venture factory can produce in the form of CKD, but within 3-5 years, it must be gradually localized, at least half of the level, and the foreign exchange balance must also be considered. If these problems cannot be solved, or at least we must have a solution now, otherwise, it will be difficult for this cooperation project to be approved by the central government." Rao Bing said with some embarrassment.

In fact, these problems are also the reason why Volkswagen’s negotiations are in a desperate situation. There are also great opinions among Volkswagen on this issue. After all, such things never happen when investing in other countries.The prerequisite for a company like Volkswagen to invest in a place is that these places basically already have supporting industries, and at most a small part needs to be improved by them, or a small part of the supporting industry is solved by importing.

In China, although there is a corresponding automobile industry chain, after inspection, it does not meet the requirements of Volkswagen at all. In the next few years, Volkswagen will build a related automobile industry chain in China and ensure foreign exchange balance. This is too difficult. Not to mention Volkswagen, even any automobile factory will not build an industry chain in a place where there is nothing. This is completely inconsistent with the basic principle of clear division of labor in modern industry.

"In mainland China, no car factory can do well, and GM Toyota can't do it either. In order to achieve this requirement, we can only rely on domestic manufacturers. It is necessary to form a local industrial chain, otherwise, or a country’s full support, such as the support of the United States to Japan back then.” Chen Zhiwen said bluntly.

As for investing in the domestic auto industry, he is bound to win. He is not clear about the details raised in the country, but he still knows the principled issues, such as localization and foreign exchange balance, and he has already prepared relevant issues. train of thought.

When Midea started to enter the white goods industry, it did not have the ability to build an industrial chain without lack of money. Instead, it relied on many small factories in Hong Kong. When buying a picture tube factory from Sony, many parts were also in Hong Kong. Purchases, and the core, still need to rely on the Japanese market, which is inevitable in a market economy.

The automobile industry is more than a hundred times more complicated than home appliances, and it is impossible to form an industrial chain after the gods come. The only way is for local enterprises to strive and become a part of the industrial chain.

"But this may involve a lot of AMC's technology, and it also needs the support of AMC." Rao Bing said.

"It's not possible. We can't teach you one by one. No factory has so much energy." Chen Zhiwen shook his head and said, "However, we can provide the drawings and technical requirements, and then domestic manufacturers develop and develop, and the research and development have successfully passed us. approval, then the component can be localized.”

A car has [-] to [-] parts, and the car factory only puts forward the requirements. Overseas, it relies on the ability of countless manufacturers to complete the production of parts. In fact, the technical understanding of many parts, the engineers of the car factory Can't compare to suppliers.

"If we do this, I worry that it will take a long time. The domestic technical standards are much different from those overseas, and the production equipment, testing equipment and even quality control experience are far inferior. I am worried that it will affect our localization progress. "Rao Bing said that the most important thing in China is foreign exchange. Before negotiating with Volkswagen, Volkswagen is unwilling to produce parts locally. They prefer to adopt the CKD method for a long time, that is, import parts from abroad and then assemble them in China. In this way, there are not so many troubles, and at the same time, Volkswagen can make a fortune overseas, but the domestic side will naturally not agree, so the foreign exchange balance cannot be achieved, and the domestic automobile industry cannot be developed.

"Quality control experience or development experience, I can arrange for the United States to come to China for unified training, or arrange some Chinese quality engineers to give on-site instructions, but the number of personnel may be limited." Chen Zhiwen paused and said: "As for the various equipment? Yes, I don’t think it can be manufactured in China, if import is needed, I can arrange my Hong Kong company to participate in a joint venture, directly invest in some potential parts companies, and with foreign exchange, I can also buy overseas equipment, so it kills two birds with one stone.”

"In this case, it is indeed possible, and it is a solution." Rao Bing nodded and said, in fact, all problems are about money. The negotiation with the public is also because the public is worried that they will not make money. The domestic side also thinks Similarly, I was worried about the serious loss of the scarce foreign exchange after the cooperation, and Chen Zhiwen was so talkative, if he could use money to solve it, many problems would naturally be solved.

"However, there are many suppliers, and it is necessary to carefully examine which ones to cooperate with." Chen Zhiwen continued.

"Of course." Rao Bing nodded.

"As for the problem of foreign exchange balance, I have no solution at present." Chen Zhiwen paused and said: "AMC's main market is the United States, which has overcapacity, and it is unlikely to export cars from the mainland to China in a short time. In the United States, I am already trying to find a way to open up the Southeast Asian market, but it will take a long time.

So my proposal is that within ten years, the RMB earned by the AMC joint venture factory will not be converted into foreign exchange. As for ten years later, there may be other ways to form a foreign exchange balance. At that time, we will discuss this matter again. how? "

Volkswagen’s solution to the foreign exchange balance is very simple. To build an engine production plant in Shanghai and Shanghai, the production capacity is three times the domestic demand, and other re-exports to earn foreign exchange. AMC obviously does not have this ability, but the fundamental reason for maintaining foreign exchange balance is to worry about foreign investment in the country. If you make money and then have to exchange foreign exchange and leave, resulting in a loss in foreign exchange, as long as you promise not to exchange foreign exchange for a certain period of time, then there is no problem. As for 3 years later, the mainland government will not be short of foreign exchange, and it will naturally be exchanged at that time Besides, the domestic auto market will start blowing out only after 10 years. At that time, it is estimated that the little money earned in the country is not enough to expand production. There is no need to consider the issue of foreign exchange, because it may be necessary to mobilize funds from overseas. .

"Not exchanging foreign exchange? This is indeed a method." Rao Bing was stunned for a moment. The foreign capital that made such a request was the No. 1, but the reason for making such a decision must be because he was very optimistic about the future of the domestic economy.

"In this way, the problems of localization and foreign exchange balance are basically solved. In the future, we only need to put these problems in the contract." Chen Zhiwen said with a smile, normal companies will definitely care about every penny But Chen Zhiwen doesn't care at the moment, even if he doesn't make money in the last ten years, as long as the brand is established in the country in these ten years, the quality is good, and the channels are opened, then he will make money lying down.

"Indeed, Mr. Chen is really efficient." Rao Bing nodded. Today's success was beyond his expectation.

"Any questions?" Chen Zhiwen asked again.

"There is indeed one more thing. We hope that after the joint venture in the future, the two parties can jointly develop new models, such as models suitable for domestic demand." Rao Bing continued. In fact, there are many problems in the cooperation between the two parties, but they are raised here today. They are all issues of principle. If Chen Zhiwen, the boss, solves these relatively controversial issues of principle, but other issues can be resolved by spending some time communicating with the AMC team. At most, the length of time is different.

"Joint research and development is possible, but the ownership needs to be fully owned by AMC." Chen Zhiwen said.

"Why is this? Shouldn't it belong to a joint venture company when we develop together?" Rao Bing said.

"Because you currently don't have the ability to cooperate with AMC in research and development, and what is the essence of this joint research and development, I don't think Director Rao needs me to make it so clear?" Chen Zhiwen said with a light smile.

No matter what model is developed, in fact, the AMC team conducts research and development according to the domestic situation. As for the domestic side, it is completely based on learning experience. is not fair.

The principle of Chen Zhiwen's cooperation with the mainland is to make common profits or common development. The two parties base on the most basic business rules. Under the condition of mutual benefit, they can bring employment, foreign exchange and development opportunities in a certain industry to the country. Instead of taking the initiative to give up profits.

Although even if you give up the profits, you won't lose much to yourself, but if you always give up the profits in the cooperation between the two parties, either the other party will think that you are stupid and will only make more progress in the future, or you will feel that you have other purposes. It is better to follow the rules. This is also the basis for long-term cooperation. In the long run, this will better ensure the interests of both parties. Like this kind of joint research and development, if AMC cooperates with the mainland to develop it, the domestic side will not pay much. The results obtained may not be a good thing for the future technological progress in the Mainland.For example, the domestic auto brands that later generations cooperated with, except for Changan, have not grown much in the past few decades.

"However, if we jointly research and develop, won't our people participate in the same way? Even if we can't get a general patent, we must at least have some of it?" Rao Bing thought for a while and said, what Chen Zhiwen said makes sense, The mainland has no experience and ability to develop cars that meet Western technology. It is indeed unfair to split the final results equally, but on his side, he has to fight for more rights for himself no matter what.

"If this is the case, what should be the distribution ratio? How can we be sure? You and I will discuss this for a long time, and I don't think it is necessary." Chen Zhiwen shook his head and said, "I intend to arrange for AMC to develop the next This model is suitable for the mainland, and it will conform to the current domestic situation in terms of price, technology, and quality. Both the R&D direction and the R&D personnel are mine. Therefore, AMC should naturally have all the rights to this new model. However, the mainland For the personnel involved in one party, I can cooperate in the form of separate entrustment, and your personnel can also participate in part of the research and development. At the same time, you can also obtain a certain amount of extra foreign exchange, which will be paid by the American AMC alone. This can be said to kill two birds with one stone.

Besides, the new model belongs to AMC, but it still needs to be produced in a joint venture with China, and the mainland will still have a 51% stake. In this regard, the country can also share half of the profits. "

"Then this new model will also be a Jeep model?" Rao Bing asked.

"No, we will know exactly what it is after we have a joint venture." Chen Zhiwen smiled and said, although he thinks that the possibility of leaking the secret is not high, and even if the secret is leaked, other automakers may not be interested in this market, but Chen Zhiwen I still feel that there is no need to tell the mainland the details now, at least wait until the joint venture project is negotiated before discussing the development of new models in detail.

"Well, the research and development of new models is indeed far away. If we can reach an agreement on the localization of parts and foreign exchange balance in the future, then this cooperation will be formally signed soon." Rao Bing thought for a while, Said.

Negotiating and cooperating with the Chinese is really much more convenient than negotiating with overseas whites, especially if the other party is the boss who can basically make a decision and doesn’t care about short-term foreign exchange gains, then basically avoiding the most difficult agreement to reach at present problem.

"Okay, AMC in the United States will send someone over soon, and I also hope to reach a cooperation in the shortest possible time." Chen Zhiwen nodded and said with a smile.

(End of this chapter)