I asked you to save a bankrupt factory and you became the richest man in the world.

Chapter 471: 246-247: Open the book, Gao Ling Xing Yao! (5000 words)
Germany, Wolfsburg, Dazhong Headquarters.

"We just talked about the situation of Dazhong Company's European division. Now let me explain the sales of the entire China region."

"According to the latest data, in 2016, FAW-Dazhong achieved vehicle sales of 1 units, which is terminal sales, including imported vehicles from Austria, a year-on-year decrease of 904%."

"We are now 200 units short of our original sales target of 10 million."

"Among them, the sales of large and medium brands were 1, a year-on-year decrease of 315%; the sales of the Audemars Piguet brand were 188, a year-on-year decrease of 17.3%."

"In the luxury car sector, Dazhong Group was not hit that hard, but Dazhong brand cars were hit very hard by China's new forces, with a drop of nearly 20%, which was far beyond our expectations."

In a large conference room at Dazhong’s headquarters, a thin middle-aged man wearing black-framed glasses was speaking on the stage while wiping the sweat that had flowed down his temples.

He was facing the entire board of directors of Dazhong and the expert group members of Dazhong Auto.

This is the annual financial reporting work for all major regions.

But in the past, they were scattered, basically either missing this or that.

After all, Dazhong Automobile has always had excellent performance over the years, and its stock price has risen so much.

A Santana that costs only tens of thousands of yuan can even be sold at a premium of more than 300,000 yuan in China.

It can be said that they have no performance pressure at all.

Many participants may even just casually glance at the report after the meeting.

But today was different. All board members, even those who were sick, were brought to the meeting in an orderly manner.

All members of the expert group are included!
Now, everyone, without exception, looked at the plan in front of them with serious expressions.

As the middle-aged people continued to speak, their originally casual and impatient expressions became more and more serious.

Even though it was already five o'clock in the afternoon German time, no one wanted to stand up!
You know, at this time of year, Dazhong Automobile Company would have been deserted, even the ordinary manufacturing workers had left.

They usually get off work at three in the afternoon. Otherwise, why is football so developed in Germany and why do children have so much time to study?

However, precisely because of this anomaly, they also realized that Dazhong Automobile had encountered big trouble in China, their most important and undisputed market!

You know, Dazhong did not underestimate the Chinese market, but instead concentrated a lot of funds on corresponding research and development.

In 2016, FAW-Dazhong launched more than ten major new models in China, such as the new generation Magotan, the new generation Audi A4 L, the new Golf Jialv, Dazhong brand's first crossover station wagon Weiling, and the more fashionable and youthful new Audi Q3, all of which fully met the diversified and personalized needs of consumers.

It can be said that with Dazhong's best efforts, it has launched several pretty good products that sell very well in Europe.

but. . .

Not popular in China!

The reason for this is that the new forces led by Hillhouse Capital have such a strong impact.

In the past, a Santana cost more than 200,000 or 300,000 yuan, and it was very popular in the 1990s.

But now, in China, even if you sell it for 8 yuan, no one is interested.

Wouldn’t it be better to buy a Dolphin for the same price?

But now there are many factions within Dazhong, and each major faction has its own little ideas. This is really a dead end within a dead end!
"In terms of R&D expenses, Dazhong has such high R&D expenses, but in the end they can't even come up with a reliable hybrid, and the pure electric ones are also rubbish."

"In terms of business efficiency, Fengtian has 37 employees, and each person sold 30 cars. Dazhong has 67 employees, and each person sold 13 cars. This is the lowest efficiency level."

"Dazhong's success over the past 20 years was based on the rise of the Chinese market. Last year, its sales volume was over 2 million, accounting for nearly half of Volkswagen's sales. Now, it's 100,000 less."

"But our production line is still planned based on two million."

"What about next year?"

"What about the year after next?"

"Feng Sihan, have you ever thought about what the consequences would be if we lost the Chinese market?"

Dazhong President Heizman spoke slowly.

But when he talked about the latter part, Feng Sihan almost broke out in a cold sweat.

Although Heizmann's tone was a rhetorical question, Feng Sihan knew the answer was yes.

That is, if Dazhong loses the Chinese market, it will only have the European market to survive.

Obviously, both Feng Sihan and Heizman need to get out!
The situation of Greater China is like this because of its complicated background. Now China is also actively developing the new energy vehicle industry.

However, many things are not decided by him or even Heizman.

He also knew that Heizman was just looking for an excuse to get the people around him to shut up by saying this to him.

Otherwise, if Feng Sihan was driven away, the situation in China would probably become even more difficult to handle.

“It’s not just a matter of sales volume dropping, profits have dropped by more than 20%!”

"Does this mean that even if we lower prices, we still cannot achieve a rebound in volume?"

A thin man with a mustache standing nearby seemed to ignore Heizman's anger and spoke slowly.

There was silence off the field at this moment.

They knew that this thin man with a mustache was firing at Heizmann!
"Boroski, if you hadn't been so slow, Dazhong would have already launched a competitive product in China. At least we can have a competitive extended-range vehicle to test the waters first."

"Do you think fuel vehicles have a future now? You are just holding that piece of junk and admiring yourself!"

"Times have changed, Mr. Porowski!"

Feng Sihan is not someone who can be easily provoked. He has a master behind him. He was very angry and did not give Porowski any face at all. He directly retorted.

"You!!!" Porowski didn't expect Feng Sihan to be so tough.

"What? You don't understand the situation now. China's A-class new energy vehicles are sold at 14 yuan, and our fuel vehicles such as Bora, Jetta, and Sagitar are almost the same price. However, our products are more than one era behind theirs!"

Feng Sihan was so anxious that he couldn't help but let the cat out of the bag.

Dazhong's products actually iterate very slowly.

But the senior executives of Dazhong seemed to be living in a dream.

I always thought that Dazhong was one of the most powerful automobile companies in the world.

This is just like the Qing Dynasty around 1841, they still felt like they were the Celestial Empire.

Other places are barbarians.

In fact, history is repeating itself. The mentality of Dazhong, especially that of its senior executives.

the same!

All the board members present were shocked. They couldn't believe that Feng Sihan would say such a thing!
"Feng Sihan, don't talk nonsense." Heizman glared at Feng Sihan and said.

He knew that quarreling in such an important board meeting today would have no substantive significance and would instead highlight his incompetence.

If the head of a company cannot control this little thing, how can he solve the complex problems that exist in the company?
"Lowering the price alone has no real meaning. Most of our parts come from Germany. This is the core interest of the group here and also the core interest of Germany. I think everyone agrees on this point!"

Heizman looked around and the board members beside him nodded.

Germany invented the car, and Dazhong is a very German brand.

The cost of manufacturing large and medium-sized vehicles is relatively high.

To be honest, when it comes to technical strength, the vehicle manufacturers, whether it is Dazhong, GM or Volt, are not as capable as those of the major monopoly parts suppliers.

Dazhong integrates the systems of various parts suppliers. Technically, well, it's just so-so. The really awesome ones are their suppliers Bosch, Conti, etc. In comparison, the American OEM technology is still better than that of European OEM technology.

For the same component, engineers from parts suppliers study it every day. They know the design requirements and standards of different manufacturers and know what can be used and what cannot be used. They are experts for the OEMs, and the engineering design requirements of the OEMs can only be completed with the participation of parts suppliers.

Parts suppliers are specialized because they only provide a single product rather than the entire system. They are able to optimize costs, improve quality, and continue to develop new products driven by the market and customers to continue to occupy a large market share. At the same time, vehicle manufacturers are increasingly dependent on parts suppliers, and the division of labor between them is becoming more and more clear, and the hierarchy is becoming more and more distinct.

At present, this supply pattern has basically been formed and it is very difficult to break it. However, it is precisely because of this that this symbiotic relationship has lasted for too long, so Dazhong dares not to remove these parts suppliers in China, and instead tries to use some emerging Chinese suppliers.

You know, why are China's new energy automotive brands rising?
The most crucial point is that in terms of hardware, consumer electronics are penetrating into the automotive industry. COEM is more open and more willing to try new technologies and processes from other industries, and consumers are also willing to pay.

Hillhouse Capital is taking the lead in this regard.

Hillhouse Capital is originally a strong electronic technology company.

Now Hillhouse is doing this very well and has no path dependence on large and medium-sized enterprises.

The further you progress in your career, the more difficult it will be to play!
The Marshall Plan after World War II and the opening of the United States to the Western camp in terms of capital, technology and markets, the disintegration of the Soviet Union and the subsequent new Eastern European markets, the influx of high-quality talent and cheap energy have injected great vitality into Germany's automotive industry.

But now Feng Sihan, who has a deep understanding of the Chinese automobile market, is in deep crisis.

Because he knows.

The old capital is going to be eaten up!
"That's why our complaints now are meaningless."

"But at the same time, if you cling to your flaws, you are just asking for death!"

"I dare say that Chinese automobile companies are just hiding in the Chinese market and can't get out?"

Heizman said this later, banging hard on the table in front of him, looking down at the board members standing beside him, and spoke sternly.

The board members present were all thoughtful at this moment. Some seemed to agree with Heizmann's words, but some did not take it seriously and were still living in the dream of the original powerful Germany.

This Dazhong has been up and down in the automobile market for hundreds of years.

How could a small new Chinese force like you be able to change it in more than ten years?

"Heizman, it's already six o'clock and the meeting has seriously exceeded the time limit. Tell me what you think." A white-haired old man at the side interrupted Heizman.

"Your Excellency Cavendish (The Duke of Devonshire has a very high status among the German nobility. As the first duke, his last name is Cavendish, so Cavendish will be used instead of the family name in the future.), then I won't waste any more words. I will tell you what I think."

"I think that the support we are getting for our new energy research and development departments in China is far from enough."

"I plan to transfer all the relevant resources in Germany to the new energy R&D department in China. At the same time, I will apply to the board of directors to change the R&D department to have independent R&D approval authority, and the expense application process will only end with me!"

What Heizman said caused an uproar.

You know, Dazhong’s R&D department is a very delicious meal.

It is a place that all forces must fight for.

Because the R&D sector has high expenses, high employee salaries, and great power and responsibilities.

If you all move to China, how will other forces place people there?

Not convenient!

Moreover, the German government might not agree with such a large-scale action.

The large-scale transfer of industrial teams is a very sensitive matter.

"China's current approach to automobile research and development is completely different from that of Germany."

"If we can't keep up, we won't be able to gain a foothold in future competition."

Feng Sihan interrupted.

We always said “in China for China” in the past, but this time we really want to make it happen.

That's a lie.

The future prospects will depend on what competitive models can be developed in the next two to three years.

However, with the aggressive posture of new forces such as Hillhouse Capital, if Dazhong does not make changes, it will be doomed!

"For this matter, you guys come up with a plan and I'll make the decision." Cavendish seemed to have a certain understanding with Heizmann and said in a deep voice.

Heizman couldn't help but be overjoyed when he heard this, and nodded quickly in agreement!

Although disorganized organizational structures and confusing job responsibilities and processes are unavoidable for new companies, if you don't take this crucial step, you will always be stuck in not knowing how to progress.

But there are many problems now.

Dazhong has shortcomings in both product definition and marketing. In terms of product definition, Dazhong's electric vehicle project lacks or has almost no qualified product managers.

The so-called product managers internally are more like vehicle model project coordinators.

In addition, electric vehicles with Dazhong's bids have the problem of being unable to distinguish themselves from traditional car brand positioning. Users' inherent impressions of Dazhong's fuel vehicles will be brought over to new energy products. If the problems of product definition and new energy brand marketing are not solved, the sales of Dazhong's electric vehicles will be difficult to improve.

Price and quality are sometimes irreconcilable contradictions. How Dazhong strikes a balance is also a challenge. How to control the degree of localizing and improving Wolfsburg's overly high standards?

If the product is not modified, the cost will not be reduced. If too many modifications are made, after-sales problems may easily occur, which will affect the brand. The little reputation that Dazhong has for its quality and craftsmanship will no longer exist.

As we enter 2017, competitors are further reducing their prices. The blue ocean has become more than just a red ocean, it is now a blood ocean!
Large and medium-sized enterprises that are already lagging behind in the competition will be even more stretched.

However, crisis is crisis, but there are opportunities in crisis. Dazhong has reached the point where it has to change. Who knows what it will be like in five years?
Maybe the internal combustion engine can be revived, and hybrid and extended-range engines can become mainstream!

But all of this requires Dazhong to take the initiative to seek change.

If Dazhong does not change, many senior executives of the company have actually seen that it is a foregone conclusion that the company will not survive.

"Mr. Heizman, now that Mr. Cavendish has spoken, we will do our best to cooperate with your work."

"But let me be frank with you. If there is no improvement within two years, don't blame us for being rude!"

Poroski on the side said coldly.

He is the boss of the engine department.

This time it was both embarrassing and shameful.

It can be said that he does not have the trust of the board of directors headed by Cavendish.

The core issue is still the price reduction trend in the Chinese market, which is really scary!
Nowadays, the price of A-class cars in China is less than half of that in Germany.

This kind of industrial cost control ability shocked even a veteran like him!

One half of the price, what does that mean?

This means that even if you give it an 8 percent tariff, it can still come in and attack you.

You say you are Cavendish, aren't you scared?
This is no longer industrial capability, this is industrial magic!
This is also the core reason why Cavendish agreed readily.

People like them who hold great power are actually the easiest to see which direction the wind is blowing.

Because this is the money they have!

Put aside the internal struggles among you guys. If anyone destroys Dazhong’s foundation, you will be dealing with this group of directors!

"Hmph! Don't worry, if it fails this time, I, Heizman, will leave directly without you saying anything!" Heizman said in a cold voice.

The board members who were gradually dispersing were all stunned.

What a good guy!

Heizman looks quite manly!
Cavendish was delighted and stepped forward to pat Heizman on the shoulder. "Don't be impulsive, Heizman. Porowski is also worried about the development of the company. The directors and I have seen what you have done. You have done a good job. Keep doing it!"

In the eyes of managers, they are not afraid of the executive managers making mistakes, but they are afraid that they are afraid of making mistakes and just sit there doing nothing.

In a sense, Heizman is indeed a pretty good manager.

Setting up an independent R&D institution in China now is a risky move, but Cavendish and others will not give up on Heizmann because of this.

"We will definitely reach new heights in China!" Heizman immediately stood up straight and said loudly.

PS (if you don’t want money): I watched the Chinese national football team today, and compared to the new energy vehicles, they were really disappointing. I will make up 1000 words tomorrow and write 7000 words in total.

(End of this chapter)