What's wrong with me being a rich man?

Chapter 692 Intentions (4k)

Guo Kongcheng, from Malaysia, came with the wishes of local political and business figures.

Yu Xing was actually quite skeptical about the effectiveness of the Guo family's support for Mahathir. In any case, the Chinese were a minority there, and those like them controlled enormous wealth. But in terms of the opportunity presented to them, the Lotus Project was at least a relatively high-quality asset.

If we include Lotus Group, both of these should also be considered good assets.

The key question is whether Proton Group, which has been regarded as a burden, can get out of its predicament.

The group quickly reached a consensus that it couldn't succeed on its own.

First, there's the difference in powertrain systems. Carbon Silicon is involved in new energy vehicles, while Malaysia mainly produces gasoline-powered cars. There's no sign of any future new energy policies being implemented, so it's absolutely impossible for them to expand into the new energy market there.

Secondly, there's the issue of positioning. Successful models using silicon carbide are mid-to-high-end mid-to-large SUVs, while in Malaysia, the market has long been dominated by economy passenger cars priced between 5 and 10 ringgit, with small or compact sedans consistently topping the charts.

Then there's the issue of investment. If we really want to make silicon carbide ourselves, then we will undoubtedly need to develop new car models that are suitable for the Malaysian market and consumer groups, which means a huge investment of resources starting from scratch.

Silicon carbon is developing well in the domestic market, so there is no need to put a lot of resources into a foreign market where it is difficult to develop new energy sources. However, ASEAN's trade advantages with other parts of the world are indeed a good springboard.

Placing high-value-added segments domestically and low-value-added segments in ASEAN countries, while also exploring markets like Australia and Europe (which we've considered before), could be an effective channel for future development.

If Proton can be taken over, it will be a bridgehead for gaining overseas experience.

Therefore, the conclusion reached by Cui Zhiyu and others was roughly the same as what Yu Xing was thinking: if they really wanted to empower Proton, they should take existing mature domestic gasoline models and rebadge them locally.

The costs of mature domestic models have already been fully amortized, with marginal costs almost zero. The technological value in this area can be directly exchanged for equity, reducing cash outlays and mitigating excessive investment risks.

Silicon carbide doesn't have what its competitors do. Silicon carbide can become an intermediary like Guo Kongcheng, but it needs to put in more effort than him and act as an operator.

Yu Xing couldn't keep Guo Kongcheng, who had come from afar, waiting too long, so he showed up the next afternoon to take him for a test drive of the five-seater Kyushu, which was scheduled to be launched by the end of the year.

Guo Kongcheng was full of praise for silicon carbon products and was also amazed by the development of the new energy industry in mainland China.

During their conversation in the car, Yu Xing was more candid, mentioning that silicon carbon itself does not have the ability to drive changes in Proton, which was also his initial assessment when he first received Li Song's message.

Guo Kongcheng was very surprised by this.

When Yu Xing noticed the expression on this person's face, he thought he was acting. However, after chatting for a few more minutes, he realized that the other person genuinely believed it.

“Mr. Yu, if carbon and silicon can lead the way in the 30 yuan price range, what about lower-priced models?” Guo Kongcheng said. “Moreover, Mahathir will introduce policies to promote the development of new energy as soon as he comes to power. Can’t we take down the features of the car we are riding in now and sell it there?”

Yu Xing used a simple analogy to describe this matter: "Mr. Guo, it's like you taking the experience of Shangri-La to operate GreenTree Inn when we bring silicon carbide to Malaysia to manufacture cars."

“Proton urgently needs a mature mid-range gasoline model that can help it regain market share, rather than a new energy vehicle designed from scratch. As for Mahathir’s policies, we are not confident that Malaysia alone can be our primary target for expanding overseas markets. Oil prices are cheap there, but the power infrastructure and supply chain are very fragmented.”

"Moreover, to be honest, I also need to observe the continuity of my policies toward Malaysia."

Guo Kongcheng remained silent in thought.

After Yu Xing let him digest the information for a while, he quoted a saying from Guo Kongcheng's father: "Fish follow the ocean currents, and fishermen must seek out the ocean currents."

This is Robert Kuok's expansion creed in his memoirs: wherever there is active industrial transfer and obvious consumption upgrading, the next Shangri-La may emerge.

Guo Kongcheng remained silent.

After a moment, he said, "Mr. Yu, so what you mean is..."

“Mr. Guo, we still have a good interest in Lotus Group, including Lotus Engineering. If you are willing to sell, we can offer a higher price.” Yu Xingxian stated his bottom line and then said, “Since Li Song told me the day before yesterday, we have had a series of internal discussions. Regarding Proton and the Malaysian market, we believe that it cannot continue to operate in the existing low-end market. It needs a mid-range model that can generate profits.”

Malaysia is the home of Japanese brands. Proton developed in its early years through cooperation with Mitsubishi, but now it only has one outdated economy car to keep it in business. Another local brand, Perodua, is a deep joint venture with Toyota, and its models are entirely based on the latter's technology.

Although economy cars account for the majority of sales, it is a fiercely competitive red ocean market, and neither Proton nor Perodua has high profit margins.

Considering this situation, the company turned its attention to SUVs, which have seen rapid growth in recent years. SUVs are the fastest-growing category of gasoline vehicles in Malaysia, perfectly catering to the consumption upgrade needs of economy car users.

Currently, in the SUV market, the Honda CR-V, Toyota RAV4, and Nissan X-Trail dominate the most lucrative compact SUV segment.

"Mr. Guo, there are enough domestic models to compete with these three models from Honda, Toyota, and Nissan," Yu Xing said after giving Guo Kongcheng a brief introduction to the market. "Great Wall's Haval H6, Geely's Boyue, and BYD's Song are already comparable to Nissan in terms of competitiveness. In fact, the H6 is the best-selling compact SUV in China, selling hundreds of thousands of units a year."

Great Wall Motors' Haval H6 is expected to sell 55 units this year, which is almost equivalent to the annual sales of the entire Malaysian car market. It is a proven, mature and reliable model.

Carbon Silicon believes that if these three models from Great Wall, Geely, and BYD could be rebranded and marketed in Malaysia, they would all be highly competitive.

Guo Kongcheng naturally understood the concept of hundreds of thousands of vehicles. Hearing President Yu's words, he asked, "President Yu means that Carbon Silicon could join forces with them to acquire Proton?"

“This is the method we believe can effectively solve Proton’s predicament. Mr. Guo can actually contact them directly.” Yu Xing also treated people with sincerity. “Although their three models each have their own characteristics, I think they are sufficient for the Malaysian market. However, domestic cars are all left-hand drive, while they are right-hand drive, so localization modifications are still needed. The effort put into this aspect is much less compared to developing from scratch.”

Guo Kongcheng pondered for a moment, then said, "President Yu, Lotus and Proton are assets that are tied together."

Yu Xing nodded and smiled, “Lotus is indeed good, but Silicon Carbon has the ability to continue to expand the domestic new energy market. Since President Guo has come to Lingang this time, I am naturally willing to see Proton get out of its predicament as President Guo wishes. Our Silicon Carbon Vice President Cui Zhiyu comes from Great Wall Motors. I also have a good relationship with BYD. I am also a Zhejiang businessman with Mr. Li from Geely and we have dealt with each other before. If it is inconvenient for President Guo, I can ask around for you.”

Guo Kongcheng glanced at the scenery of Lingang, pondered for a few seconds, and then said, "I still have more faith in Silicon Carbon and President Yu. Since President Yu has pointed out the right path for Proton and is familiar with domestic car companies, if Silicon Carbon is willing, we can form a joint venture to handle this matter. If Silicon Carbon is not willing to take the lead, I will communicate more when I get back and try my best to separate Lotus." He spoke very frankly.

Upon hearing this, Yu Xing did not immediately agree, but said, "In that case, I will ask them what they are willing to do. After all, the main technology comes from them, and silicon carbide can be adapted to local conditions."

He chuckled again, "I received a call from Mr. Li this morning. The fund has gained a lot of undeserved fame because of Brexit, and he said he's quite apprehensive about it. He's also unsure about the subsequent funding strategy, fearing it might delay Mr. Guo's investment. That sum of money..."

Guo Kongcheng understood that President Yu didn't want the $2 million investment as a stepping stone, and interrupted, "President Yu, that's my personal money. The Over Peak Fund is willing to help manage that money, and I need to thank President Yu. Please do me this favor."

Seeing his stance, Yu Xing stopped talking about refunding the money.

Guo Kongcheng used $2 million to get in touch with the Peak Fund, and then through Li Song's introduction, he went to Lingang. Now it's uncertain whether the Proton deal can be done, and since they are not familiar with each other, it's natural to make things clear upfront.

The Peak Fund is not eager for this money. Of course, for Guo Kongcheng, this investment, even if it loses money, is not a big deal. Even if Proton fails, this opportunity to get to know each other will leave room for future cooperation in Lingang.

Yu Xing and Guo Kongcheng communicated frankly and without beating around the bush.

Finally, Yu Xing briefly mentioned another matter: "President Guo, Guo Shanfeng is currently facing many investigations and lawsuits, and really doesn't have the energy to deal with other matters."

He instructed his secretary to return the unopened document bag, which supposedly contained unusual evidence related to the publicly traded palm oil company FGV.

Guo Kongcheng did not take the bait, but just smiled and said, "Mr. Yu, I am not good at this, and there is no convincing evidence here. Guo Shanfeng is known for short selling. Mr. Yu, just take it as an evaluation. The competition between Wilmar and FGV is in Malaysia."

Yu Xing nodded slightly and did not refuse any further.

Guoshanfeng has neither the energy nor the suitability to show its face, but putting on a disguise is no problem. Regardless of whether FGV gets into trouble or not, Guoshanfeng has nothing to do with it.

The silicon carbon company needs time to communicate with its competitors. Guo Kongcheng is in Shanghai, and besides visiting Lingang, he also took the opportunity to inspect his own hotel.

After seeing Guo off, Yu Xing efficiently made arrangements and communicated with various parties. On the one hand, he commissioned a third-party research institution to investigate the more detailed situation of the Malaysian car market, and on the other hand, he assigned suitable personnel to communicate with Great Wall Motors, Geely, and BYD.

As he said, the H6, Boyue, and Song are all capable of competing with Japanese brands, but they do have their own characteristics, and adapting them to the Malaysian market requires a certain amount of resource investment and consideration.

Cui Zhiyu called Wang Fengying of Great Wall Motors, mainly to inquire about their interest in jointly acquiring Proton Group and their willingness to rebrand the Haval H6 for the Malaysian market. The result was straightforward—they were not interested.

Great Wall Motors is focused on consolidating its position in the domestic compact SUV market and currently has no excess production capacity. It has no interest in the Southeast Asian market, and its plans for a joint acquisition are completely incompatible.

Geely did provide some feedback after contacting them, and once positive signs appeared, Yu Xing directly communicated with Li Shufu.

Li Shufu spoke rather tactfully, engaging in several rounds of vague and ambiguous conversation before finally revealing his true interest.

Simply put, "I want a lotus flower."

Geely's Boyue is a product launched after digesting Volvo's technology, and its quality and product strength are quite good. Li Shufu also expressed strong confidence in using this product to enter the Malaysian market, but the revenue sharing...

Yu Xing was not surprised that Geely had its eye on Lotus. If it weren't for the carbon silicon issue, the two sides might already be in talks. But now, his own company also really wants such a high-quality asset.

Compared to Geely and Great Wall, BYD, which is focused on jointly developing battery CTB, is in a much more passive position.

When Wang Chuanfu received Yu Xing's call, he was somewhat bewildered. After hearing Yu Xing's explanation, his answer was: "The Malaysian market is doing alright."

"The gasoline-powered Song is going to compete with Japanese cars, which is alright."

"Converting a left-hand drive car to a right-hand drive car is not bad."

After hearing "okay" several times in a row, Yu Xing felt that President Wang was being somewhat passive-aggressive. Puzzled, he pressed BYD for its true attitude on this matter: "President Wang, you keep saying 'okay' this and 'okay' that, but is it actually going to work? Are we going to do it or not?"

“President Yu, if you want to do it, then do it. It’s that simple.” Wang Chuanfu gave a direct answer. “We don’t have money, but we can provide the technology. Right now, we just want to focus on making new energy a success. You’ve already made Kyushu a success, and you’re thinking about overseas markets. We’re extremely anxious. If you want to do it, then do it. If you don’t want to, then don’t.”

"If it works out, we'll split the profits 50/50. If it doesn't, you either compensate me with your patent license, or I compensate you, how about that?"

Hearing Wang Chuanfu's attitude, Yu Xing replied, "Hmm, not bad."

The Proton deal may still not come to fruition. Objectively speaking, the BYD Song gasoline version is the least competitive of the three models, but it has a cost advantage.

For example, the 6AT transmission in the Geely Boyue is sourced from a third party, while the Song has its engine, transmission, infotainment system, and chassis core components developed and produced in-house. This gives it more pricing flexibility in markets like Malaysia, meaning that even if the final price is lower, the profit per vehicle can be higher.

In addition, Song can independently optimize the transmission calibration for better adaptation to Malaysia's tropical climate, local fuel quality, and road conditions.

Yu Xing instructed the company to agree on a cooperation framework, then proceed with preliminary work based on a more detailed understanding of the Malaysian market, and finally give Guo Kongcheng a formal response.

On the last day of June, Li Song from Hong Kong called to report on the fund's work.

He inquired about Guo Kongcheng at the very end of the phone call.

Yu Xing only said that it was progressing, but then added a compliment: "President Li, you've done a good job on this."

Upon hearing such praise, Li Song was overjoyed. Indeed, a fine horse could greatly help its discerning owner.

(End of this chapter)