The Industrial Giant Reborn.

Chapter 489 Ambition in the Domestic Market

"It's still too early to say this. Such a large investment must be cautious. In fact, Shenhai City is so close to Hong Kong and the language is similar. I also hope that such a large-scale project can be built in Shenhai City, especially for games. Electronics industry." Chen Zhiwen said with a smile.

In fact, investing in factories all by yourself is also a forced choice in the current electronics industry structure.

The electronic industry of later generations is basically outsourcing. This trend has also emerged in the 80s, but it has not yet reached the complete industrial chain model of the 90s or even the 21st century.

OEM in the electronics industry is actually a company like Foxconn that, through economies of scale, OEMs computers or later feature phones and smartphones for various large electronics companies. However, the current OEM model has not grown enough yet. That is to say, each foundry company is one after another, and has not yet reached the large-scale model of the 90s.

This is inevitable for the development of the electronics industry, but the development of OEM also needs to be done step by step. Only after a lot of competition will a king company like Foxconn emerge, and this process will also take a long time. It gradually took shape in the mid-to-late 90s.

In other words, even if Chen Zhiwen intends to cultivate a future OEM assembly giant, it is currently impossible to do so, even if he finds Foxconn. They do not have the ability to undertake such a huge order as Midea, nor can other companies, and their scale has not yet reached this level.

Perhaps South Korea's Samsung has this potential, but it is obviously impossible for Chen Zhiwen to give most of his orders to this future competitor. He even invested in a black and white TV factory in China, partly for the purpose of competing with Samsung.

Although he has already arranged for people to go to South Korea to acquire Samsung's shares, and he is considered a small shareholder of Samsung, this is just a purely economic investment, and industrial competition is another matter entirely.

But Chen Zhiwen cannot wait that long. In addition, building a factory directly in China will be of great benefit to his influence. At the same time, in the future, just the land under the factory will also be a high-value return. Therefore, building a factory by himself will not only benefit It's more cost-effective and almost the only option.Even the current Japanese electronics groups have their main core production capabilities in Japan.

As for the home appliance industry, there is no need for OEMs, and it will be the same in 30 years.

"Yes, then I will report this matter to the leaders of Shenhai City and Eastern Guangdong Province." Li Chuanfang nodded and said, it is impossible to suppress such a major event. Even if he suppressed it, Chen Zhiwen would definitely let the news out. This would only Offended people.However, if reported to the central government, his level may not be enough.

"Okay, thank you Director Li." Chen Zhiwen said with a smile. This time he just used Shenhai City to convey the news. The advantage of this is that by the time he arrives in Yanjing, the central government will probably be ready. For such a negotiation, it is better for both parties to be prepared and put it on the table for discussion.

After Li Chuanfang left, Chen Zhiwen called Lei Shengli and told him roughly the conversation just now.

"Based on the current situation in the country, it is estimated that this project will definitely be wanted. Next, it depends on which city is willing to pay the most." Lei Shengli said with a smile.

The transfer of the electronics industry out of Hong Kong is the core strategy recently decided by Midea Group. After all, according to predictions, Hong Kong will no longer be suitable for this kind of intensive manufacturing industry in the future. With Midea's scale, it must be prepared several years in advance. In the future, non-manufacturing jobs such as R&D, marketing, procurement, and quality may remain in Hong Kong. However, even so, it can easily create jobs for thousands or even tens of thousands of people, because Midea’s future forecasts for the global market will be more Big, especially the computer industry.

"That's for sure. I estimate that the mainland will know everything about this matter soon. You should be prepared to take our negotiation team and professionals to Yanjing. We will discuss this issue with the central government first. The key point is to obtain a license for large-scale sales in China. I can bring hundreds of thousands or even more jobs and foreign exchange to the country, but we also need to enter this market in all aspects, especially the home appliance industry. Domestic We all need to enter the distribution channels." Chen Zhiwen said calmly.

In the past few years, his investment can be said to be the first test of the mainland market. He entered the domestic market in small batches and slowly built up the brand reputation. For example, a store in a city has several Midea home appliances, even if it is due to sales control. The reason is that it is impossible to expand the market, but at least it can be the same as imported brands. First, many people with spending power can become familiar with it and know that there is still Midea brand.

Now, my goal is to enter the domestic market in an all-round way. Under the current policy, it is unlikely that foreign investment will be allowed to enter this market in large quantities for products that local brands can produce. But my stepping stone is an output value. A super factory worth more than one billion US dollars is another very big temptation for mainland executives.

“If we can enter the domestic market normally, coupled with the low cost of local production and tariff issues, we estimate that we will be able to capture a large market soon, and the low cost will also give us a greater advantage in Europe and the United States. Lei Shengli nodded and said, in the overseas market, even after acquiring RCA, the production costs of the Wanwan factory will be reduced through new management. However, facing Japanese brands, there is still a bit of pressure. This time to invest domestically, for Midea, It can help win the domestic market and continue to conquer the European and American markets.

As for the huge benefits it will bring to the mainland, they are just incidental. With Midea's market size, it will be the same wherever it goes. These can only become bargaining chips for its own side to obtain greater discounts, such as taxes, land prices, etc.

"It's not that easy. There must be some resistance on the domestic side. Everything depends on your future negotiation ability." Chen Zhiwen said.Mainland executives have always wanted to cultivate their own industries. Direct entry of foreign capital may destroy local industries. This may be a major factor preventing Midea's home appliances from entering the country in an all-round way.Only cars are a special case. The gap between domestic and foreign countries is too big to develop on their own. This is not the case with home appliances. There may be a gap, but it can still be used. It is also easy to imitate. Unlike cars, it involves personal safety. Even if When you buy a car, you can’t figure it out even if you dismantle it. Even if you do research, it’s not as good as others. Even if it’s good, the cost control, fuel consumption, and safety are still inferior to others. So there’s no other way but to start a joint venture. Trade the market for technology.

It involves the interests of many people, domestic demand for foreign exchange, a large number of jobs, potential foreign investment technology and management models, and quality control. The balance issue here must be seriously considered by domestic high-level officials, and negotiations with Midea are also required. Negotiate to find an end result that satisfies all parties.

When a super-large project enters a country, it involves too many things, and it will definitely take some time to produce results.

"After this news gets out, we will also send people to contact Wanwan. This can be regarded as a balancing act." Lei Shengli added.

"It would be better to add another South Korea to compete with many parties." Chen Zhiwen thought for a while and said, although it is impossible for him to invest in South Korea, it is good for him to have one more bargaining chip. At present, South Korea is not considered a developed country, and its per capita income is higher than Hong Kong is a little worse, and the electronics industry is also relatively good. In the eyes of outsiders, it is indeed suitable to build a large-scale super electronics industry factory.

"Okay." Lei Shengli agreed.

Yanjing City.

A complex of six six-story buildings is located in the southeast corner of the center of Yanjing. It is in an excellent location, next to two main roads.

A jeep drove in from the door, and the surrounding security guards all saluted, which was enough to show that the person inside the car had a distinguished status.

The jeep drove inside. In the center of the yard, there were many vehicles, but they were mainly sedans produced by the old Yanjing Motors. There were also a few vehicles similar to jeeps, but with different appearances.

"Old Zhao, how is this new car?" As soon as the middle-aged man called Lao Zhao got out of the car, he was teased by a familiar voice behind him.

"Haha, Old Wu, this car is really good. It is indeed a car produced by Yanjing Jeep." Old Zhao laughed and said that Yanjing Jeep had been produced the year before last, but the initial production capacity was very low because many parts It needed to be imported from overseas, which was inefficient and had a small import quota. Later, many factories in Yanjing gradually began to produce parts, especially large parts, and began to produce them locally. This caused the number of imported parts to begin to decline, although it was still Accounting for the majority, Jeep's production capacity has gradually increased a lot.

But there are more monks than meat. Not only Yanjing, but also Guangdong City thousands of miles away, all want a batch. The same goes for other cities, especially when the military still has priority. Although he is the director of the Fourth Machinery Department , Lao Zhao also waited for a long time before he got one.

"I asked before, it will take a few months to wait for my car." Lao Wu walked to the car and said with some envy.

"You can just take it if you want. You're welcome." Old Zhao said with a smile.

"Forget it, it's better not to borrow the car randomly. It's okay to borrow it for business purposes, but not for personal matters. Just take me back in the afternoon and I'll just sit there." Old Wu shook his head and said.

"You're still too cautious, why don't you just borrow a car?" Lao Zhao smiled and didn't care, and asked again: "Why did you get down here?"

"There is a big event." Old Wu lost his smile and said, "There was a very shocking news from Shenhai City. A local city leader had a contact with Mr. Chen Zhiwen from Hong Kong and learned that Midea Group is planning to choose a place outside Hong Kong to invest in a large-scale electronics factory with an annual production capacity of up to one billion US dollars."

"Annual output value is one billion US dollars?" After hearing this, Old Zhao almost stared out of his eyes.

(End of this chapter)