The Industrial Giant Reborn.

Chapter 499 Advantages of own supply chain
"Okay." Chen Zhiwen nodded and said. In Shanghai in June, the temperature is not very hot, but it is still a bit hot. Especially today, the weather is better and the sun is brighter. It is very uncomfortable for people to be exposed to direct sunlight. Comfortable.

"Please come this way." Qiu Ke gestured with his hand, and their car was parked in front of the office building. As for the others, they had agreed to gather here before the test drive.

Entering the hall, Chen Zhiwen felt a refreshing chill. There were several vertical air conditioners blowing cool breeze throughout the hall, and the Midea logo was reflected on the surface of the vertical air conditioners.

Arriving at a conference room on the 6th floor, Chen Zhiwen took another look at the air conditioner and asked, "Does the entire public use Midea air conditioners?"

"Yes, in terms of price, Midea is the cheapest and has better quality. Germany also recognizes this brand, so Volkswagen's office air conditioners are all Midea." Qiu Ke smiled and said, "As far as I know, Shanghai Many foreign brands in the city have also purchased Midea air conditioners, and even the government has begun to adopt them, but the quantity is relatively small."

"Thank you for your recognition of my company's products." Chen Zhiwen laughed.

This is the advantage of localized production. Electrical appliances produced domestically are definitely much cheaper than imported ones. And because our own factories have the ability to balance foreign exchange, theoretically speaking, domestic people do not necessarily need to buy this air conditioner. Forex.

Of course, if the domestic side sends it to the Friendship Hotel or sells it to various joint venture factories in foreign exchange, that is also possible, but this proportion should not be very large.Those who can spend foreign currency domestically are only a very small group.Unlike drinks and food, which can be sold to overseas tourists.

Regardless of whether it is the government, foreign companies or some private companies, when given a choice, they must choose the most cost-effective one. After all, the name Midea is quite famous even in Europe and the United States.

After they purchase it, especially the air conditioner, colleagues and friends will definitely come to experience it. This is the most hard-core advertisement.In the future, when the domestic economy improves, it will slowly spread out, so that it can affect more people. In addition, when the domestic market is further opened to foreign investment in the future, CCTV's advertising itself has also been won, so it can be done in the shortest time. , to win the market, at least the mid-to-high end belongs to itself, and the low-end must still be left to local brands. This may also be the intention of the mainland government, but it can also benefit indirectly through investing in shares and controlling the supply chain.

However, the current progress is still relatively slow. The main reason may be that the government is also short of money, not only in US dollars, but also in RMB.Too many factories in the mainland have poor performance and have turned to the government for money. Local governments and even the central government have run fiscal deficits.

Even when I went to Baosteel a few days ago, there was no air conditioning in the office.Or, at least not yet.

"Yes, Mr. Chen is keen on investing in China. Of course we support it. Hong Kong capital is also Chinese capital, haha, and Midea brand air conditioners are much cheaper than other imported brands." Qiu Ke smiled and said: "Even Germans think Midea air conditioners are very good. They also bought Midea air conditioners for their residences in Shanghai."

"This is also the result of localized production. Otherwise, if the air conditioners produced in Hong Kong are exported to the mainland, they will also be much more expensive." Chen Zhiwen said.

In today's international economic situation, many developed countries still produce industrial products with technical content in their own countries, especially Japan, but they can only be limited to mid-to-high-end products. Low-end electrical appliances, like the textile industry, are basically either given up or transferred. Went to Korea or Wanwan.

Because of this, high-end industrial products are relatively expensive, and air conditioners are barely available. There are really not many countries in the world that can manufacture air conditioners. Even the factories in Hong Kong and Yanjing import some parts from Japan. The main reason is that the industrial chain is incomplete.

Relying on this advantage, developed countries can basically easily harvest developing countries around the world. Mainland China wants to buy Japanese electrical appliances, but the prices are staggeringly expensive. For example, in eastern Guangdong Province, Chen Zhiwen happened to see a Japanese stereo while shopping. The price is 12000. At this price, you can almost buy half a house in Shenhai City. Of course, there are also tariff reasons.

In the more than ten years before the reform, various overseas industries wanted to sell products to China at high prices and then make money without taking any risks. However, these brands, no matter what industry, eventually failed, because there will always be a few brands that will Enter the country for localized production.

Any country will save foreign exchange, even countries with no shortage of foreign exchange reserves.

Therefore, as the first to move the home appliance factory to the mainland, you can control the market here to a great extent.

"Yes, after localization, the cost will be greatly reduced, and domestic people will be able to afford it. It can be said to be a win-win situation." Qiu Ke said: "Mr. Chen, we at SAIC Volkswagen also want to localize as soon as possible. Parts production, so we hope to cooperate with Mr. Chen on this matter!”

"Santana cars, no matter how localized they are, cannot be produced by ordinary people." Chen Zhiwen said with a smile.

Rich people can still afford their own washing machines, refrigerators, televisions, and electric fans if they are produced locally. After the cost is reduced, wealthy people can still afford them. After all, the three major items for weddings in big cities in the 80s included household appliances.

Air conditioners are more troublesome. They are expensive, and put a lot of pressure on the power grid. Therefore, currently in China, it costs almost 5000 yuan to install an air conditioner, which is equivalent to half a unit in an average location in Shanghai. The price of a small house is high.However, there is no shortage of rich people in any era. Last year alone, the number of air conditioners installed nationwide exceeded 5. In the future, this number will increase at an exponential rate. Midea can still try to compete in this market.

But ordinary rich people don’t dare to sit in cars even if they want to buy them. One of the initial purposes of Santana was actually to be a government vehicle. The same is true for Jeep. The main purchaser is the government department. In this regard, It will only slowly change in the 90s. "Mr. Chen is right, but the country also hopes to reduce costs as soon as possible. The lower the costs, when the economy gets better and better in the future, maybe many people will be able to afford cars." Qiu Ke said with a smile. .

"Then how to cooperate." Chen Zhiwen said calmly. He actually already knew, but he needed the other party to say it first. In cooperation in the mall, the person who speaks first is basically at a disadvantage.

"I know that Hutchison Whampoa, owned by Mr. Chen, has invested in a large number of local parts companies in Yanjing City. As far as I know, many of these factories have been approved by AMC and are already supplying goods. I wonder if they can be allowed to Also supply to me, SAIC Volkswagen?" Qiu Ke asked.

According to general logic, if a car company is looking for parts companies to supply, it can basically go directly to Volkswagen. If the word is released, I don’t know how many parts companies will try to rush in and obtain Volkswagen suppliers. Opportunity.

But the current situation is that many parts factories in Yanjing were established with a lot of technology and quality guidance from AMC and investment from Hutchison Whampoa. They value these companies, although they may not necessarily be able to reach the public. requirements, but it is already far ahead of other companies. Otherwise, Shanghai, which is also a first-tier big city in China, is actually a little stronger than Yanjing in terms of industrial foundation, and there is no shortage of various processing plants within it.

You must know that the automotive industry is a very special industry. Meeting various processing accuracy or various standard requirements is only the most basic. How to make products of the same quality sustainably and stably is the key to automotive industry parts. The place where the company is most tested.

Any parts of the car must ensure consistent quality. Even if there are problems, they must have consistent problems so that they can be evaluated and whether they can be accepted.Because a car is made up of tens of thousands of parts. If one part is unstable today and causes this problem, and if that part fails tomorrow and becomes unstable, then the car will be useless?

In order to stably manage parts companies, overseas automobile companies have studied for decades and launched a complete quality management model.From design to production, it is basically covered. It is very difficult to do it well. Even many overseas companies can only say that their performance is average.

SAIC Volkswagen currently mainly adopts the CKD (overseas imported parts assembly) model of production. The central government has also issued an order requiring gradual localization. However, they took German engineers to various potential suppliers in Shanghai. , was basically completely rejected.

I thought it was the Germans who were deliberately making things difficult, but the Germans also came up with a set of strict VDA standards, and even took several senior executives from the mainland to some supplier companies in Germany to inspect, and the reply they got was that they Suppliers really do such a good job.

After checking the VDA standards, Qiu Ke and others were even more confused. Even if an average factory is willing to invest, it will probably take several years to barely reach an acceptable level. This is not yet qualified.

Under this circumstance, Yanjing Jeep, which had earlier invested in a joint venture automobile factory in Yanjing and had begun the production of a small number of localized parts, became the target of research by Qiu Ke and other teams.

After investigation, it was found that AMC began to train hundreds of suppliers in Yanjing in batches as early as three years ago, teaching the management model of American auto parts companies. At the same time, investment companies under Hutchison Whampoa also specialized in many Suppliers screened and invested, helping them add equipment and change management models. Hutchison Whampoa and AMC even set up a large-scale testing center in Yanjing, which can provide vehicle and parts testing centers in various environments.

With the technical and financial support of the two companies, there are already hundreds of parts companies in Yanjing, which can barely meet the German management standards. Although the management models of the American and German companies are different, the quality The goal is the same.

Many of these parts companies are held by Hutchison Whampoa with nearly half of the shares. Without permission from foreign investors, they may not be able to supply SAIC-Volkswagen.

After all, these companies have been cultivated by foreign investors with great efforts. If the public is allowed to do such a thing in Shanghai, they will definitely not be willing to do so.

"Of course, SAIC Volkswagen can contact them directly." Chen Zhiwen said with a smile.

The automobile industry cannot be monopolized by one company. Not to mention AMC's weak foundation. Even if Chen Zhiwen now owns a company of the level of Volkswagen Toyota, it is impossible for him to try to monopolize the mainland automobile market. If he has this ability, his superiors will not allow him. It is enough to eat meat in moderation, but it is impossible to eat all the meat alone.

But the parts industry is not so strictly controlled. I spent so much money and energy to cultivate local suppliers and buy shares, but just for this day, as long as I supply supplies to SAIC Volkswagen, then from now on After FAW-Volkswagen and American cars entered the mainland, their many subsidiaries were more or less able to eat some meat. In the era of competition for hegemony, localization is not only a requirement of the domestic government, but also a market demand. Otherwise, how can we compete with other companies? Brand competition?If American car brands dared to assemble only in the mainland, they would not need the government's intervention. The prices would be so high that no car would be sold, because at that time, there were already many joint venture brand cars in the mainland.

However, Japan and Korea have little hope. These two countries basically like to eat alone. Their automobile companies basically only give orders to suppliers in their own countries. This is even the case in the home appliance industry. Suppliers from other countries want to enter the market. ,a bit difficult.

Of course, what I have now are only some parts in the supply chain of the automobile industry. No one can make all the parts for a car. Only investments like my own are possible, but I can't do it. All, at present, the supply chain companies invested by Hutchison Whampoa also produce large parts that are difficult to transport across oceans. The CKD cost of these parts is relatively high. In the future, we will slowly support local industries, or we will just expand our business to produce them. Other parts.

"Thank you, Mr. Chen." Qiu Ke smiled and asked, "I wonder if Mr. Chen can consider arranging for these parts companies to build branch factories in Shanghai?"

(End of this chapter)