The car giant started by marrying the daughter of the king

Chapter 287 Shanghai Volkswagen arrived early, FAW was anxious
"Old Wang, the Capital Automobile Factory's sedan will be on sale this year."

"Jiang Hui has also formed a special team to develop new models for BMW."

"The domestic auto market will certainly undergo major changes by then, and the competitiveness of our Shanghai-branded cars will no longer be able to be maintained."

As the factory director of Shanghai Automobile, Yu Jin is under a lot of pressure.

Shanghai brand cars have always been the most produced cars in China.

Many leaders of different units and taxi drivers use Shanghai-brand cars.

For a long time, Shanghai-branded cars have been a symbol of China's automobile industry.

While FAW's "Hongqi", as the mount of relevant leaders, was shrouded in mystery in the hearts of the people, the "Hushang" became the car closest to the lives of the Chinese people with its large-scale production and outstanding performance.

At that time, many companies in Shanghai collaborated to continuously improve production processes and assembly through technological transformation and research, completed the production of a complete set of dies, and ended the backward production method of relying on manual hammering of car bodies.

If the flagship product were to be hit by someone, the operating conditions of Shanghai's automobile manufacturers would suddenly become severe.

"Director, we have already discussed most of the differences in the joint venture negotiations with Volkswagen. Both sides have made some concessions, and we will have further results soon."

"When the time comes, we will directly import advanced sedan products from Volkswagen, and we won't have to worry about the impact from Capital Automobile Manufacturing and BMW."

As the director of the Shanghai Automobile Design Department, Wang Huiliang has now been promoted to deputy factory director, and also serves as the director of the design department.

He was very impressed by the new BJ212 designed by Jiang Hui, but in terms of the technical level of the sedan, he felt that even if it was Jiang Hui's product, it could not be better than Volkswagen's mature products.

"Volkswagen's requirement is to import parts from Germany in the early stages of cooperation and assemble their Santana models on our production line for Shanghai-branded cars."

"This will definitely affect the production of our Shanghai-branded cars and consume a large amount of foreign exchange. I don't think the First Ministry of Machine Building will approve it."

Yu Jin is still a little confused about the current cooperation plan.

He himself is very clear about the strength of Shanghai Automobile.

They had no way to independently develop a new competitive product, whether it was a sedan or an SUV, and he had no confidence.

Wang Huiliang, who also serves as the director of the Design Department, has already made this clear to him.

In order to avoid the situation where the project is halfway completed, the funds have been spent, but there is no result, the best way is to not bother.

However, in the face of changes in the domestic automobile market, it will certainly not work if there are no new products coming out.

The sales volume of Shanghai-brand cars is declining every month. After the cars from Capital Automobile Manufacturing Plant are put on the market in the future, the sales volume of Shanghai-brand cars is expected to be even lower.

This is definitely not the situation that Yu Jin wants to see.

Therefore, seeking cooperation with international automobile giants is an inevitable choice.

The emergence of a large number of imported cars in the past two years has made many people realize that the quality and riding comfort of foreign cars are far higher than domestic ones.

People would rather spend a high price to buy imported cars than buy domestically produced Shanghai-brand cars.

“I don’t think these two issues are particularly big problems.”

"The sales of Hushang brand cars are not very good now. When Santana is produced, fewer people will consider buying Hushang brand cars."

"So, taking advantage of the opportunity of cooperating with Volkswagen, we changed the production line from producing Shanghai brand cars to producing Santana, which is actually an asset reuse and saves money for the factory."

"As for spending foreign exchange to import parts from Germany, I think it is acceptable as long as we make it clear to the First Ministry of Machine Building and other relevant departments that this is just a temporary measure."

"Instead of spending a lot of foreign exchange to import cars every year, it would be better to spend less to import parts."

"Besides, we can definitely formulate a plan for the localization of Santana sedans, and strive to gradually increase the localization ratio from the second day of mass production to reduce the consumption of foreign exchange."

Yu Jin felt that what Wang Huiliang said made a lot of sense.

As long as the explanation is done well, these changes are not unacceptable.

"Then we should arrange another meeting with Volkswagen as soon as possible to finalize all the details, and then formally report to the relevant departments and sign a cooperation agreement."

Time waits for no one. The new sedan of Capital Automobile Manufacturing will be launched this year, and the sales of Shanghai-branded sedans will surely be even worse by then.

If we cooperate with Volkswagen now, we will be able to assemble Santana using imported parts next year, which will greatly improve the operating conditions of Shanghai's automobile industry.

After making the decision, Shanghai Automobile quickly took action.

On August 1982, 8, witnessed by relevant departments, Shanghai Automobile officially signed a joint venture contract with Volkswagen Group.

The two parties formed a 50:50 joint venture, imported internationally advanced car models from Volkswagen, and made full use of Shanghai Automobile's existing production lines to produce cars.

Later, the two parties will build new factories to promote the introduction of more car models.

This process is several years faster than in history.

The title of the first automobile joint venture in the country went to Shanghai Automobile.

This incident has a great impact on the domestic automobile industry.

"Lao Zhao, hasn't Volkswagen been negotiating with us? Why did they suddenly sign a contract with Shanghai Auto?" "Shanghai Auto's level is lower than ours, and the resources they can mobilize are not as many as ours. Don't they know that?"

Geng Weidong's face turned ugly when he heard the news that Shanghai Automobile and Volkswagen had signed a contract.

In the domestic automobile industry, many people know that FAW is negotiating cooperation with Volkswagen. Even Geng Weidong himself has been to Stuttgart twice to discuss the cooperation plan with Volkswagen.

Judging from past exchanges, Geng Weidong feels that although the two sides have some differences, they both have the intention to cooperate.

Under such circumstances, Volkswagen suddenly cooperated with Shanghai Automobile, and he felt that he had been tricked by both Volkswagen and Shanghai Automobile.

In state-owned enterprises, face is sometimes very important.

For the sake of face, sacrificing some practical interests is something that can be considered.

"Shanghai Auto's requirements for the shareholding ratio are not that high, and we are willing to form a 50:50 joint venture with them."

"But when we negotiated with Volkswagen, we hoped to establish a joint venture company in which we would hold 60% of the shares and they would hold 40%."

"In this way, the say in the joint venture will be in our hands."

After Zhao Guangming said this, Geng Weidong became even angrier.

It was obvious that the conditions we insisted on were beneficial to China, but the Shanghai Automobile Company gave in first.

As a result, FAW is in a passive position.

"Volkswagen's competition in the domestic auto market is not that good, especially in Japan, where Toyota, Honda and other automakers have been entering the international market in recent years. Volkswagen should have a hard time."

"China has the largest population in the world and is now in a state of reform. Its economy is developing rapidly and its prospects are very promising."

"They must be aware of this, so they are more proactive in discussing cooperation with domestic manufacturers."

"When you negotiate with the other party, you can emphasize to them the influence of FAW in China."

"We are not just a company, we can also formulate and influence policies in the automotive industry."

"If Volkswagen wants to achieve rapid development in China, it cannot do without cooperation with us."

Geng Weidong seemed quite confident when he said this.

Many of the domestic experts who formulate automobile industry policies came from FAW or have various connections with FAW.

It is entirely possible for them to restrict a certain car company through policy.

Of course, if this kind of thing is done too much, it is not good.

"Well, I'll make an appointment to communicate with the other party immediately."

"Although Volkswagen is cooperating with Shanghai Auto, it currently only produces the Santana model."

"Our previous communication with Volkswagen was more about introducing Audi brand models to help upgrade our Hongqi sedans."

"By then, Volkswagen can cooperate with both Shanghai Auto and us at the same time."

Zhao Guangming knew that there was no way to stop the cooperation between Volkswagen and Shanghai Automobile.

Then the only option is to push Volkswagen to cooperate with FAW at the same time.

This means that Volkswagen has two partners in China, and a lot of the say is in the hands of Volkswagen.

After all, there will definitely be competition between FAW and Shanghai Auto in order to win some Volkswagen model import projects, and there will be some concessions on conditions.

"This is the only way. We are already one step behind. We need to find a way to catch up as soon as possible."

"The First Ministry of Machine Building is now encouraging the development of the car industry. Capital Automobile Manufacturing Plant and Shanghai Automobile have both taken action."

"Second Automobile is said to be communicating with French car companies, probably wanting to discuss cooperation as well."

"In this case, we can selectively lower some of our terms and conditions so that we can finalize the cooperation project as soon as possible."

The situation is stronger than people. The establishment of Shanghai Volkswagen made FAW anxious.

As the eldest son of China's automobile industry, it would be embarrassing if it was surpassed by Capital Automobile Manufacturing and Shanghai Automobile successively.

Geng Weidong would definitely not be able to accept this situation, as it would also affect his future.

"No problem, our cooperation with Volkswagen will definitely be finalized within this year!"

This time, Zhao Guangming had actually issued a military order.

As the deputy factory director, he can naturally feel the pressure that FAW is facing now.

Now is not the time to blame each other.

(End of this chapter)