What's wrong with me being a rich man?

Chapter 563 New Policies (4k)

A BMW vice president from its German headquarters was angered by the perceived offense from a Chinese automaker.

Sylvia was used to receiving preferential treatment, but this was a minor matter. From the words and expressions of the founder of the car company in Shanghai, she sensed something else... hard to describe, but seemingly a mixture of sarcasm, amusement, and even smugness.

The rest is understandable, so what's there to be proud of?
Sylvia couldn't figure out the other person's mindset, and she also felt that she was overthinking things. After all, subjective feelings are always prone to bias, but objective products are relatively easy to standardize.

She still took a cursory stroll through the Shanghai Auto Show in the morning, seemingly unaffected by the conflict. However, a request she made near noon made Ren Mingyu, the deputy general manager of Brilliance Auto, realize that the BMW vice president still harbored resentment about it.

"Mr. Ren, could you please help us find one of those silicon car bodies? I'm still very curious about what it looks like."

Sylvia said this.

Ren Mingyu did not refuse and quickly sent someone to handle the matter.

As evening approached, the BMW group discreetly drove away from the National Exhibition and Convention Center, finally getting a glimpse of the true face of Carbon Silicon Kyushu.

"This car has some aerodynamic design, but it's definitely not that great. Otherwise, the front would have a curve." Sylvia was much more critical this time than when she first saw Kyushu that morning.

Since requesting to see the actual car at noon, until she actually saw it, the vice president from Germany didn't mention Kyushu once more. However, Ren Mingyu knew she cared.

As expected, Sylvia inquired further: "Does this car sell well in China?"

As Ren Mingyu walked, he said, "It sold 5699 units last month, which is really good. It was launched in the last week of February and it's still quite popular because China is very supportive of new energy vehicles."

He briefly introduced the relevant domestic policies.

Sylvia opened the car door and got in. The question about sales figures that she was about to raise suddenly disappeared from her throat.

She reached out and touched the screen in front of the passenger seat, then pressed the seat back forcefully.

Sylvia's mind raced as she tried to understand what she had just heard.

Then she asked, "Approximately how much did this car cost?"

Ren Mingyu said, "According to Silicon Carbon itself, it is 32 Chinese Yuan."

Sylvia breathed a sigh of relief and continued to ask, "You just mentioned that the price after subsidies is over 28 yuan. Isn't the cost and pricing of this car from the Silicon Carbon Group too aggressive? No car company can survive on subsidies in the long run."

Ren Mingyu discussed Yu Xing's considerations regarding economies of scale.

Sylvia thought quietly for a while and commented, "It's still quite radical, but the cost isn't so surprising anymore."

Director Philip then said somewhat uncertainly, "It sold 5699 units last month, isn't that more than our X1?"

Ren Mingyu confirmed: "Yes, but cities like Shanghai, which have license plate incentive policies, have contributed a lot to its sales. The X1 sold 3000 units last month."

Sylvia was taken aback.

She used to be the vice president in charge of BMW's M series, and recently, due to internal turmoil, she was reassigned to expand her business scope. She wasn't that sensitive to data in the Chinese market, so she was genuinely surprised to hear this now.

The base model BMW X1 has a final price of around 29 yuan, which is exactly the same range as the subsidized Kyushu.

Although the two seem to be positioned very differently, similar prices always make people wonder.

Sylvia composed herself and instructed, "Let's open it, let's see."

Ren Mingyu drove the top-of-the-line Kyushu Max, carrying four senior executives from BMW's German headquarters, and drove back and forth on two nearby roads.

Sylvia casually tapped the screen on the passenger side, then turned to Philip in the second row and said in German, "The X5 sells very well in China, and the localization of the X3 in China is in the planning stages. If this type of car continues to achieve better market sales in China, the localization of the X3 should be accelerated. When the X1 is slightly discounted, the low-end version of the X3 may also put pressure on it. This car cannot continue to receive subsidies indefinitely."

She continued, "Actually, X1 could have done a better job with its hybrid vehicle plan, which would have put a lot of pressure on cars like silicon carbide ones. This company relies entirely on aggressive manufacturing strategies, and once it can't effectively achieve the scale to reduce costs, its operations will run into problems."

Philip chuckled: "Sylvia, do you mean you want to persuade Munich to adjust its existing product strategy for a newly established Chinese automaker?"

Sylvia's enthusiasm immediately wilted.

If they could do that, it would certainly put tremendous pressure on Silicon Carbon Kyushu, but why would a giant automaker do that?

BMW certainly has internal policies regarding new energy vehicles, including the development of a hybrid version of the X1. However, the product planning for the hybrid X1 is not very satisfactory, at least not to Silvia.

Despite its short range, small size, and poor power, its internally discussed price is actually 10 yuan more expensive than the gasoline-powered X1.

How could such a product possibly achieve good market sales?
Sylvia was not optimistic about the hybrid X1. The low-end gasoline X1 cost 290,000 yuan on the road, and if the hybrid X1 cost another 100,000 yuan, she could have looked at the higher-end X3. Why would she choose the hybrid X1, which was not a very good product?
However, she also understands the internal trade-offs.

X1作为X系列的小弟，上面的X3和X5都得有划分级别的功能和配置，而X1上个月只卖了3000辆，X5这种落地超过70万的大哥却足足卖了1.5万辆。

How could it be possible to lose a large X5 for a small X1?

Furthermore, BMW's proportion of gasoline-powered vehicle business is so high that it would not lose its gasoline-powered vehicle business because of new energy vehicles.
Sylvia shook her head: "Munich is full of bastards."

She switched to English and said to Ren Mingyu, "This car is quite quiet; it's definitely a qualified product."

Ren Mingyu simply nodded.

Sylvia added, "Whether this car can succeed depends on whether it can continue to gain market recognition after the subsidies in China are reduced. That is the key test."

Ren Mingyu nodded again.

Philip asked in German, "I heard that China is going to reduce subsidies for new energy vehicles next year. Do you think this car can maintain its current sales volume?"

Sylvia thought and thought: "Whether it's an engine or an electric motor, if a car runs fast, then it runs fast; if a car is quiet, then it's very quiet; if a car has more features, then the owner enjoys more features."

"If the stability of this car can be verified, sales may decrease, but not by much. It is not only qualified, but already quite excellent."

Philip thought Sylvia's evaluation was very high.

He said, "You should really have a serious talk with Munich about the presence of carbon silicon-based models and car companies in China. It's not a good thing for us. We should take it seriously. If the hybrid version of the X1 doesn't work, could we consider a new model that can handle both?"

This time, it was Silvia's turn to mock Philipp: "Do you think Munich would spend so much money to compete just because of a small change in the Chinese market?"

Philip spread his hands, feeling utterly helpless.

He shook his head and said, "That Yu from the silicon carbon company, what he said is correct. We can realize it, but it's hard to change." Sylvia was a little indignant: "How can you build a good car with a bunch of insects!"

She then said, "I'll talk to Reithofer when I get back to Munich."

Philip made the sign of the cross: "God bless Reith, haha, hopefully he can continue to be our president."

Sylvia rolled her eyes. With the constraints of vested interests and the turmoil brought about by the mountain incident, how could she seriously examine the far-reaching impact of new industry trends?
She switched to English and asked Ren Mingyu, who was driving, to let her take the wheel.

Ren Mingyu readily agreed and pulled over to the side of the road.

Sylvia drove the Kyushu Max around twice and commented, "It's acceptable, but it's enough for family users who don't prioritize aggressive driving."

Ren Mingyu agreed with this point and then introduced more of the car's features to the headquarters executives.

He quickly sat back in the driver's seat and continued listening to the heated discussion among the German executives, a barely perceptible smile creeping across his lips.

Ren Mingyu could communicate fluently with these people in English, but he also knew some German, though his spoken German wasn't very good. He could understand most of what they were saying in German.

Sylvia told herself in English that it was a qualified product, but commented in German that it was "not only qualified, but quite excellent."

For some reason, Ren Mingyu felt a sense of pride welling up inside him.

This feeling seems inappropriate for his identity.

That is... a tiny bit of pride.

……

That evening, as soon as Yu Xing entered the conference room in Lingang, the people waiting for him looked at him and smiled.

Director Zhu Zehui even joked directly, "President Yu, we were just talking about you, and you went and attacked your competitors again."

"What do you mean by 'again'?" Yu Xing widened his eyes and argued, "Exchange, exchange can't be considered an attack... When we colleagues exchange views on the industry and car models, can that be called an attack?"

He then went on to say things like "the other side started it first" and "truth becomes clearer through debate."

The meeting room was filled with a cheerful atmosphere.

People in Lingang should be happy, after all, the feedback from the Kyushu market of the Silicon Carbon Group is really excellent, and people including Zhu Zehui will benefit more or less from it.

However, the topic of today's meeting is not so cheerful.

After a warm conversation with President Yu about the situation in Kyushu, Zhu Zehui then discussed the yet-to-be-announced "Financial Support Policy for the Promotion and Application of New Energy Vehicles".

The policy has not been officially announced yet, but the details are already known in Shanghai, so Lingang is in the process of communicating with the Silicon Carbon Group.

More accurately, this refers to the fiscal subsidy policy for new energy vehicles from 2016 to 2020.

Yu Xing took a sip of tea, accepted the documents handed to him by the director, and listened to his voice.

"The main points this time are twofold: first, the national subsidy for range-extended electric vehicles is 3 yuan per vehicle; second, the local cash subsidy ratio can only be up to 50%." Zhu Zehui was talking about the policy content concerning the Silicon Carbon Group. "This also means that the maximum cash subsidy that Kyushu can receive next year is 4.5 yuan, and the decline is still... significant."

This year, the highest ratio of national subsidies to local subsidies is 1:1, with cash subsidies reaching up to 5.6 yuan.

The difference between next year and this year will be a full 1.1.

In other words, according to the policy, the final price of the Kyushu Pro next year can only be 34.58 - 4.5 = 30.8 yuan.

28+ and 30—these sound like two completely different things.

Zhu Zehui observed President Yu's expression but couldn't discern anything amiss.

Yu Xing put down the policy notice he was holding, which wasn't actually very long, and said thoughtfully, "It seems we really will have a surge in orders at the end of the year."

Zhu Zehui: "..."

After a brief silence, he asked, "Mr. Yu, what about next year? We're not going to celebrate next year?"

“We do offer cash discounts for small orders, and we can still get it for under 30.” Yu Xing said calmly. “We had already considered the reduction in subsidies, and we are confident in Kyushu’s product strength.”

Zhu Zehui waited a while longer, but still received no further comment: "That's it?"

Yu Xing laughed and said, "Isn't having confidence enough? I have confidence, but we're still selling at a loss. We were grateful for the subsidies from above before, and we can't complain now just because the subsidies are a little less. We're still very grateful."

Zhu Zehui stared at President Yu for three seconds, then shook his head: "It's good that you have confidence. I discussed it for two hours in the city this morning. I don't know how it will be implemented in other places, but the policy in Shanghai will be delayed, perhaps for about six months. The local subsidy will still be at a 1:1 ratio."

Yu Xing feigned surprise: "Director, so it's because you lack confidence?"

Zhu Zehui said, "I'm going to hold a grudge against you."

Yu Xing chuckled and said, "This...this is thanks for the leader's concern. We can only do our best to ensure our quality and service."

He truly hadn't expected that Shanghai would still have such room for maneuver after the policies were clearly defined.

Zhu Zehui then said, "So, does that mean you can get two big orders in Shanghai?"

There will be one policy when it is released this time, and another when Shanghai follows up with a new policy next year.

Yu Xing pondered for a few seconds: "We won't discuss this directly. Let everyone choose for themselves. There are challenges, after all, other cities will probably follow suit with this policy. The overall market situation still depends on the reputation of our products."

This time, the subsidy trend for the next four years has been stipulated. The subsidy will decrease by 20% in 17-18 compared to 16, and by 40% in 19-20. There is a lot of room for the subsidy to be phased out, which will inevitably impact the current new energy market.

Zhu Zehui agreed with this point and also reminded him: "Then don't talk about the details of this subsidy publicly. It hasn't been issued yet. Don't get excited and say it out loud when you're interviewed at the auto show."

Yu Xing assured him, "Don't worry, I didn't get excited during the interview."

Zhu Zehui nodded and reminded him again, "Don't say things out loud when you get excited during an argument."

Yu Xing: "..."

(End of this chapter)