The car giant started by marrying the daughter of the king

Chapter 465: Marching into Shanghai, the wolf is coming
The choice of a new factory for Mercedes-Benz was quickly decided.

The arrival of Mercedes-Benz cars is definitely welcomed in Shanghai.

A modern production line with an annual output of 36 passenger cars can directly generate output value of tens of billions of RMB.

Who doesn’t like a company like this?
Only the relevant departments in Shanghai are happy, but the Shanghai Automobile Group is different.

"Mr. Yu, the new Mercedes-Benz factory has been decided to be located in Anting Town."

"The construction will officially start next month, and the Mercedes-Benz C-Class sedan will be put into production in the first half of next year."

"It is said that the planned production capacity of this factory has reached 36 vehicles and it will recruit more than 5000 employees."

"The city attaches great importance to it and fully cooperates."

With a heavy heart, Wang Huiliang told Yu Jin what he had heard recently.

Although the official signing ceremony will not be held until next week, as the local boss in Shanghai, Shanghai Automobile Group has naturally heard the relevant news.

"What a shame, leaders! No one has taken the initiative to discuss this important matter with us."

"Mercedes-Benz's main products are the E-Class and C-Class sedans, which are in direct competition with our Santana and Hushang brand sedans."

"If they build such a large new factory in one go, everyone will buy Mercedes-Benz cars, and no one will buy our products."

"It's also a huge loss for the city."

In Yu Jin's opinion, he should be informed of everything related to the automobile industry in Shanghai as soon as possible.

Instead of the current situation, the address of Mercedes-Benz's new factory has already been determined.

I just got this information from informal channels.

"There's nothing we can do about it. Mercedes-Benz's two sedans are too popular overseas."

"Now the amount of foreign exchange earned from exports every month is very high."

"Because of the BMW Group, Shenzhen has now firmly established itself as the largest economic city in China."

"The superiors must want to catch up as soon as possible."

"Otherwise it would be embarrassing."

Wang Huiliang has a clearer view of the current situation.

It was also because of this that he felt rather heavy-hearted.

Mercedes-Benz's new factory is more attractive than their group.

Especially in terms of export earnings, the export earnings of Mercedes-Benz C-Class cars may surpass those of all other companies in Shanghai.

The impact that had on everyone was quite big.

"Mercedes-Benz's new factory is being built in Shanghai. Will supporting enterprises such as Nanshan Transmission, Nanshan Engine, and Nanshan Technology also come here to invest and build new factories?"

Yu Jin is naturally very clear about the impact on the automotive industry supply chain.

A car model cannot be produced simply by building a factory.

This requires supporting services for various parts.

Of course it is possible to transport parts from Shenzhen.

But the sales volume of transportation is definitely not that high.

“Nanshan Transmission may not necessarily set up a factory here, but Nanshan Engine will probably do so.”

"After all, the engine has more parts and the production cycle is slower than that of the gearbox."

"As for Nanshan Technology, not all parts will be produced here, but some will definitely be produced here."

Wang Huiliang made a guess based on the situation he knew.

"So, this time, BMW Group is entering Shanghai in an all-round way."

"The wolf is coming."

Yu Jin said worriedly.

In the past, Santana sedans could be said to have monopolized the official vehicle market for government agencies and state-owned enterprises in Shanghai. But after the advent of the Mercedes-Benz C-Class sedans, the situation became uncertain.

Not to mention that Hongqi BMW's Hongqi A6 is also eyeing it covetously.

This situation is definitely not what Yu Jin wants to see.

"BMW Group has been developing in Shenzhen for so many years. Jiang Hui probably feels that it is time to expand outward."

"I heard that the higher authorities will start to develop Shanghai in an all-round way this year, and various policies will be introduced one after another."

"Jiang Hui should have chosen a good time."

After Wang Huiliang said this, Yu Jin understood.

However, this situation does not seem to be a good thing for Shanghai Automobile Group.

As if he had seen through Yu Jin's inner thoughts, Wang Huiliang added his own opinion and said, "In fact, the full-scale entry of the BMW Group into Shanghai is not entirely a bad thing for us."

"In the future, we can also purchase some of our parts from their supporting factories."

"Both the degree of localization and cost competitiveness should be better than many of our current parts."

In order to carry out the Santana localization project, Shanghai Automobile Group has spent a lot of effort in recent years.

But up to now, more than half of the parts of Santana sedan are imported from Germany.

If companies such as Nanshan Technology come to Shanghai to set up factories, Shanghai Volkswagen can obviously consider purchasing more parts from Nanshan Technology, so as to further increase the localization rate.

It is difficult for those who have not experienced foreign exchange tensions to understand how much importance the automotive industry attaches to the requirement to increase the localization rate.

"I hope so."

"But we can't just rely on Shanghai Volkswagen. We can't give up our own Shanghai-branded cars."

"As mentioned before, we will also produce a sedan similar to the Capital Automobile Manufacturing Plant in the future."

"At first, the annual sales of Shanghai-branded cars could reach 50,000 to 60,000 units. We must at least restore it to this level."

After Yu Jin said this, Wang Huiliang didn't feel particularly pressured.

He is now mainly responsible for the business of Shanghai Volkswagen, and is not responsible for the business of independent brands.

……

"Jianjun, look at the Mercedes-Benz C-Class sedan, how popular is it selling right now?"

"There is also the Hongqi A6, which is also a favorite in the market now."

"Capital Automobile Manufacturing, Shanghai Volkswagen, FAW Toyota, Yangcheng Peugeot and other car companies are now focusing on sedans of various levels."

"We do want to develop a pickup truck, but I'm afraid the sales in China won't be very good by then."

Wei Deliang is rather worried about the development prospects of Great Wall Industry Corporation.

The company's current situation can be said to be getting worse and worse, and there is no money in the account at all.

Last month, he borrowed 100 million yuan from a bank to maintain operations.

If the pace continues, Wei Deliang is worried that the company will not be able to survive.

"Uncle, there are indeed many automobile factories in the country that are producing various types of cars."

"This means that competition in the sedan market is very fierce."

"Whether it's the Mercedes-Benz E-Class or the Mercedes-Benz C-Class, or the Crown, Santana, or other products such as Shouqi Zhiguang."

"If we were to produce sedans, we wouldn't have enough confidence to make any of them better than this one, right?"

"In this case, choose a different track, take a differentiated route, and reduce the intensity of competition."

“I think it is the most suitable for the development of our company.”

Wei Jianjun is a man with strong ideas.

His uncle had mentioned the development strategy many times, but his mind had not changed.

The Great Wall pickup truck project has now reached the stage of preparing the prototype.

In fact, there is no room for retreat.

"What you said makes sense, but pickup trucks are still a niche market after all."

"It is more reliable to produce SUVs than pickup trucks."

"You know the current situation in the factory. It can be said that it has reached the point where its assets are greater than its debts."

"We can't afford any more risks."

Wei Deliang said this, but Wei Jianjun had a completely different view, "Insolvency is not necessarily a bad thing."

"Wouldn't it be better to take this opportunity to complete the restructuring of the company and completely make it a company under our control, so as to avoid any controversy?"

With the emergence of various policies, the country’s attitude towards private enterprises has become increasingly clear.

Wei Jianjun felt that the conditions were ripe for him to officially take charge of Great Wall Industry Company and change its name to Great Wall Motors.

Once you become the owner of the company, some actions will be easier to perform.

Otherwise, there will always be various concerns.

“Aren’t you worried that the policy may change in the future?”

Wei Deliang thought about it and expressed his concerns.

He was a man who had experienced ups and downs, and he knew that if there was a major change in policy, it would have a huge impact on them, the uncle and nephew.

"Uncle, I think it's impossible to go back on policy."

"There are all kinds of signs that policies will only become more open."

"A company called Zhujiang Technology Co., Ltd. was established in Shenzhen some time ago."

"The owner of this company is Jiang Hui, and it was registered in full accordance with the procedures for domestic private enterprises."

"They could have used the foreign capital of a Hong Kong-funded enterprise, but Jiang Hui didn't go that route."

"I think this also shows that the other party is optimistic about the development of private enterprises in China."

I have to say that Wei Jianjun has a very sharp vision.

He can interpret a lot of things from such details.

Of course, it is also because Jiang Hui’s influence and popularity in the domestic business circle are too great.

If it were anyone else, this analysis would be meaningless.

"Zhujiang Technology is just a new company, and its scale cannot be compared with that of BMW Group."

"Isn't it a bit too hasty for you to judge like this?"

Wei Deliang, who is cautious by nature, is still a little worried.

"Jiang Hui's father-in-law is Zhu Jiansheng. You should know his identity very well."

"They definitely have a lot more information than we do, so I think it should be reliable." "Besides, if we miss this opportunity, the company's situation will improve rapidly after our pickup truck models are officially launched on the market."

"Then if we want to turn the company into a family business again, I'm afraid it won't be easy."

Wei Jianjun's words made Wei Deliang make up his mind.

It would be a pity if we missed the opportunity.

……

As a major partner of BMW Group, General Motors has always been very concerned about their movements.

Mercedes-Benz is now building a new factory in Shanghai, and General Motors is naturally aware of this news.

"Murphy, China's automobile market now has a scale of about 50 vehicles per year."

“Although it is totally incomparable with the American and European markets, the subsequent development speed is very worth looking forward to.”

"According to our sales department's estimate, Huaxia's auto sales will exceed 100 million in two years."

"Then we will enter a new period of rapid growth, and it won't take many years for annual sales to exceed 200 million vehicles."

"Under this circumstance, do I think it is necessary for the company to consider entering the Chinese automobile market?"

As the head of sales at General Motors, Edward is very concerned about the increase in sales each year.

Only if sales continue to increase can his performance as the sales manager be recognized by shareholders.

The Chinese automobile market has great potential. With the presence of the BMW Group as a partner, Edward's attention to China is also increasing.

Historically, it was not until 1997 that General Motors chose to cooperate with Shanghai Automobile Group to establish Shanghai General Motors.

Now, with the emergence of BMW Group, this rhythm has changed.

The situation of the entire Chinese automobile market is completely different from the same period in history.

"We are definitely going to enter the Chinese market, but do you think the conditions are ripe now?"

Murphy was not unfamiliar with China. After all, he had personally gone to the capital to discuss business many years ago.

But the discussion was not successful at that time.

"Volkswagen, Toyota, Peugeot Citroen and other automobile companies have already established joint ventures in China."

"This shows that they are all very optimistic about the prospects of China's auto market."

"Considering China's huge population base and proactive reform policies, I think future auto sales will be very promising."

"Now is probably the right time to start considering entering the Chinese auto market."

Edward gave his reply with certainty.

He knew that according to China's current policies, if General Motors wanted to enter China, it could only find a partner to establish a joint venture to conduct business.

It will probably take several months to get results if we start discussing cooperation with Chinese automobile manufacturers from now on.

If we start building the factory by then, it will take until the end of next year to be completed.

If the CKD model is not used to assemble cars, the mass production time of the first domestically produced car will probably have to be extended by at least one year to meet the schedule.

By this calculation, it might have been 1991.

Murphy felt that it was not too early.

"There is the BMW Group in China. If we go to China to develop, will they have any objections?"

Murphy still attaches great importance to the opinions of BMW Group.

After all, they contribute almost 10% of General Motors' sales.

Then the two sides are cooperating more and more in the parts business.

Especially with the use of 5AT automatic transmissions in some GM products, the scale of cooperation between the two parties will become larger and larger.

"So many other auto giants are entering the Chinese auto market. If we follow suit, what opinion can the BMW Group have?"

"Anyway, the models we sell in China are definitely Buick or Chevrolet brands, or Cadillac and other self-owned brands."

"Rather than a model that is a OEM cooperation model with BMW Group."

Edward spread his hands, obviously not thinking that the BMW Group would have any opinion on him.

Even if he has an opinion, he doesn't care that much.

"So do you think we should consider establishing a joint venture with BMW Group to produce cars, or look for other partners?"

Now that things have come to this, Murphy must want to discuss everything clearly.

He is also clear about China's automobile industry policies.

"This mainly depends on what benefits the partner can bring to us and whether the other party's cooperation conditions are harsh."

"It should be confirmed that the products produced by the joint venture are all provided by us."

"If we cooperate with BMW Group, it means that they are helping us expand the sales of our models."

“I don’t think people within the BMW Group would necessarily agree.”

Edward analyzed the situation after General Motors entered the Chinese automobile market from a business perspective.

The situation is obviously not exactly the same as what everyone assumes.

"You're right. If we seek cooperation with BMW Group, the conditions they set will probably be quite demanding."

“That’s something that’s hard for us to accept.”

"It would be better to find some other car manufacturers to cooperate with, so that we can get more favorable conditions for us."

Murphy is not stupid, he will definitely prioritize the interests of GM.

As for the BMW Group, if it becomes a competitor, we might have to trip up the other party.

"Shanghai Automobile, Capital Automobile Manufacturing, FAW, Second Automobile and Yangcheng Automobile Manufacturing are all relatively influential automobile companies in China."

"We can have formal contact with them to see which car companies are more sincere."

Seeing that Murphy basically agreed with the direction of his proposal, Edward actively began to come up with more ideas.

"Well, that's a good suggestion."

"I'll leave the establishment of a joint venture company in China to you."

"The goal is to find a suitable partner within this year and then determine the first model to be imported."

Edward was naturally very happy when Murphy said this.

There is a lot of room for maneuver in this matter.

He has a way to gain some benefits from it.

……

Another company that is also paying close attention to Mercedes-Benz's establishment of a new factory in Shanghai is definitely Volkswagen.

As the international automobile giant that has been most active in exploring the Chinese market, Volkswagen already has two joint ventures in China.

"Wellman, the construction of the new Mercedes-Benz factory means that the other party will have more new moves in the sedan field."

"This is not good for the future sales of Santana and Jetta."

As the general manager of Shanghai Volkswagen, Lucas has frequent contacts with Wilman, the executive vice president of FAW-Volkswagen.

They are considered the two most critical figures of Volkswagen in China, each in charge of a joint venture company.

When Volkswagen headquarters considered the opinions of the Chinese market, they mainly listened to the views of these two people.

"Mercedes-Benz's product design is very competitive and is well recognized by some consumers."

“This situation is definitely not a good thing for us.”

"But the headquarters is already considering importing more models to China. Our brand influence is not comparable to that of Mercedes-Benz."

Wilman is still very confident about Volkswagen's future in China.

After all, the two partners they chose, FAW and Shanghai Automotive Group, both have relatively large influence in China.

It is the rapid development of the BMW Group in recent years that has brought about some changes, otherwise he feels that the Chinese automobile market will be a sure thing for Volkswagen.

"Some of the models at the headquarters cannot compare with the products of the BMW Group in terms of appearance."

"But our technical strength is definitely stronger than that of the BMW Group."

"Given some time, we should be able to catch up with their level in terms of appearance design."

Lucas's view should represent the thoughts of many insiders of international automobile giants.

It is obviously not easy to make them convinced of a Chinese car company.

Unless the BMW Group can continue to grow at the same rapid pace in the future, things will be different.

Just like BYD in later generations, before 2020, few international auto giants would take it seriously.

When benchmarking new car models, BYD's models will not be considered.

But by 2025, the situation will be completely different.

When various electric vehicles are being planned in the early stages, they will be constantly compared and analyzed with BYD's products of the same level.

They even directly purchase BYD models from the market to disassemble and compare them to see where the differences between themselves and their competitors lie.

This situation is caused by the huge changes in BYD's sales.

The current size of the BMW Group obviously has not yet posed a particularly big threat to auto giants such as Volkswagen.

In particular, a large part of the sales are still sold through cooperation with General Motors.

In the international automobile market, all of this sales are under the name of General Motors.

"I also believe in your judgment, but the sales of Santana and Jetta are both declining."

"This is also an objective fact. I am worried that if this trend continues, it will affect the reputation of the Volkswagen brand in China."

Wilman said with some concern.

In this era, the pace of development of the automotive industry is generally slow.

Unlike later generations, a new car model could be developed in just over a year, which was completely beyond everyone's imagination.

"I plan to invite some R&D experts and senior executives from the headquarters to come to Huaxia for an inspection."

"It will give everyone a clearer understanding of the situation in China's auto market."

"Only in this way can our R&D personnel develop products that are more suitable for the Chinese market."

Wellman naturally had no objection to Lucas's proposal.

However, it is still hard to say how Volkswagen headquarters will ultimately view the Chinese automobile market and to what level of importance it will attach.

(End of this chapter)