The car giant started by marrying the daughter of the king

When various automobile manufacturers are taking action, the corresponding parts companies are naturally unwilling to lag behind.

"Mr. Wang, I think the company's main task in the next stage is to deal with the BMW Group."

"The priority of international customers such as Volkswagen can be appropriately slowed down."

CITIC Dicastal was only established last year, and the sales director Liu Zhu is under a lot of pressure.

Their company's main product is aluminum wheels, which have many advantages over traditional iron wheels.

First of all, the shape is more beautiful.

Aluminum wheels can be made into various complex and exquisite shapes through a variety of processes such as casting and forging, with a smooth surface and metallic luster.

This can enhance the overall appearance and class of the vehicle and meet consumers' personalized demands for vehicle appearance.

However, due to the limitations of technology and materials, the shape of iron wheels is relatively simple and the appearance is rough.

Secondly, it has strong corrosion resistance.

Aluminum easily reacts with oxygen in the air to form a dense aluminum oxide film on the surface. This oxide film can prevent the internal aluminum from being further oxidized, giving it good corrosion resistance.

In contrast, iron wheels are prone to rust and corrosion, especially in harsh environments such as humidity and salt, where the corrosion rate will be faster.

Corrosion not only affects the appearance of the wheel, but also weakens the structural strength of the wheel, posing a safety hazard.

Other advantages, such as lighter weight and better heat dissipation, have also attracted OEMs to expand the scope of using aluminum wheels.

Of course, aluminum wheels have so many advantages, but they also have disadvantages.

That is, the cost of aluminum wheels is more than twice that of iron wheels.

Taking these factors into consideration, when CITIC Dicastal was first established, it internally developed international automotive giants and their joint ventures in China as its main customers.

However, as the sales of BMW Group continue to increase, the sales prices of its models are no lower than those of joint venture manufacturers.

Liu Zhu felt that the company's customer development direction should make some adjustments.

"Well, what you said makes sense."

"Compared with clients like Volkswagen, it is easier to achieve results with BMW Group."

"Currently, part of their products are made by Nanshan Technology, and the other part is supplied by other supporting factories."

"But from the current situation, the supply chain strategy of the BMW Group is a strategy that complements both internal production and external procurement."

"We still have a chance."

As the general manager of CITIC Dicastal, Wang Yongming naturally would not object to Liu Zhu's proposal.

When it comes to customer choices, it’s not necessarily an either-or choice.

We supply not only the BMW Group but also other customers such as Volkswagen.

It’s just that CITIC Dicastal really wants to make some achievements in export and foreign exchange earnings.

Therefore, the main purpose before was to enter the aluminum wheel supply market for joint venture manufacturers such as Shanghai Volkswagen.

This will enable us to further supply international automobile giants such as Volkswagen and earn foreign exchange through exports.

"Yes, I heard that a lot of new auto parts companies have been established in Shenzhen recently."

"Some of these companies were directly founded by people from the BMW Group itself."

"In this situation, Jiang Hui not only did not object, but seemed to be somewhat supportive."

“That’s why I think this period of time should be the best opportunity to enter the supply chain of BMW Group.”

"If they adjust their strategy in the future, the barrier to entry may increase a lot."

Liu Zhu expressed his analysis and opinions.

If you want to enter a main engine manufacturer to supply goods, there must be a threshold.

Especially in the automotive industry, each OEM has its own criteria for approving suppliers.

However, although there are standards, the strictness and looseness of these standards are relatively flexible.

If a company's strategy for a period of time is to introduce a group of new manufacturers to improve or reconstruct the supply chain, then there will be many new opportunities.

If the strategy for a certain period is to focus on utilizing manufacturers within the system, it will be much more difficult for outside suppliers to enter.

Obviously, at this stage, the BMW Group is relatively open and is actively expanding its supplier system.

If you miss this opportunity, it may be much more difficult to enter in the future.

"Our shareholders should have some connections with BMW Technology in Hong Kong."

"Then we'll see if we can get in touch with BMW Technology through the shareholders, take the upper level route, and quickly enter the supply system of the BMW Group."

"Once we successfully become a supplier of the BMW Group, the capacity utilization rate of our factory, which just started mass production this year, will be greatly improved."

As the general manager, Wang Yongming is very concerned about the company's operating conditions.

If you want to have good business conditions, the capacity utilization rate must not be low.

"Well, this is a good way to speed things up."

"But we can't neglect practical matters. I will visit their purchasing department next week."

After obtaining Wang Yongming's approval, Liu Zhu was ready to take action immediately.

……

CITIC Dicastal, which was just established last year, is thinking about supplying to BMW Group. Fuyao Glass, which was established the year before last, is naturally unwilling to lag behind.

"Mr. Cao, the attitude of the BMW Group has been quite clear."

"For parts like automotive glass, if we want to supply BMW Group, we must build a factory in Shenzhen or surrounding cities."

"Otherwise, the other party is not prepared to cooperate with us."

Cao Tianling is the head of Fuyao Glass's sales department, and naturally hopes to become a supplier to BMW Group, the largest automobile company in China.

However, Fuyao Glass was only established the year before last and is still very young compared with BMW Group's existing glass suppliers such as NSG Group.

Although Cao Tianling's quotation to BMW Group has certain advantages, the automotive industry does not select suppliers based solely on price.

Supply, R&D, quality and other aspects all need to be considered together.

Although the technological content of the automotive glass currently used is not high at all compared to that of later generations.

But it is also a relatively critical part, and the BMW Group is quite cautious when selecting suppliers.

In particular, the production line for automotive glass is relatively complex and requires a large investment.

"There are several automakers in Lingnan Province, including Yangcheng Peugeot, Yangcheng Automobile Manufacturing Plant, and BMW Group."

"Among them, the new markets of BMW Group are greater than the total orders of many OEMs."

"Since they asked us to build factories in nearby areas, we will go to several cities in the Pearl River Delta to investigate and see where it would be more appropriate to build factories."

Cao Dewang is a man of great courage.

Since I have chosen to work in the glass industry, I naturally hope to do better.

"But we just invested in an automotive glass production line last year, and it hasn't even started mass production yet."

"The investment in an automotive glass production line is huge. Do we really want to invest in a new one?"

Cao Tianling mentioned a very critical issue.

In 1977, Cao Dewang worked as a buyer at the water meter glass factory in his hometown. In 1983, he contracted the factory and entered the glass industry, mainly producing water meter glass at that time.

In 1985, Cao Dewang saw the huge potential of the automotive glass market and decided to shift the focus of his business to automotive glass production.

Fuyao Glass was officially established in 1987.

So far, we have received glass orders from several customers including Yangcheng Peugeot.

However, the Guangzhou Peugeot, which will be the first to go into mass production, will not go into mass production until the second half of this year.

It is equivalent to the automotive glass production line that I invested in before, but I haven’t earned back a penny yet.

If you continue to invest near Shenzhen at this time, the pressure will definitely be very high.

"Tianling, the supporting business of BMW Group is a very big opportunity for us."

"As long as we get their orders, we can go to the bank for a loan to build a factory."

"The atmosphere of reform is very good now, and all regions are encouraging people to start businesses."

"It should be easier for banks to approve investments like ours, which involves building production lines for BMW Group."

After Cao Dewang said this, Cao Tianling felt even more pressured.

The automotive glass business has not made a penny yet, and the company's current operations are completely supported by the previous water meter glass.

We had originally hoped that the situation would improve after mass production and supply began this year.

Now we have to take out a loan to build a new factory, and the pressure is suddenly huge.

"Then I'll make arrangements to visit Shenzhen and surrounding cities next week."

"Then we will finalize our factory construction plan as soon as possible, report it to the BMW Group, and obtain their official cooperation letter."

"This way we can get a loan from the bank as quickly as possible."

Cao Tianling knew that this was indeed an opportunity for the company.

Since the boss has decided to start, we must give our full support.

In other words, China's auto parts industry is still relatively backward.

If it were in the future, it would be extremely difficult to obtain orders from OEMs when there is not even a production line.

In particular, the automotive glass produced by Fuyao Glass has not yet been officially mass-produced.

But in this day and age, there are so many opportunities.

Each OEM has the goal of localizing its components.

As long as there is a supplier who promises that he can produce the relevant parts, there is a high chance of getting the relevant opportunity.

It’s nothing like the later generations, where competition is fierce and bloody.

……

Compared with CITIC Dicastal and Fuyao Glass, the situation at Wanxiang Group is much better.

"Boss Lu, the company has now bought out the factory's equity, and you have the final say on future operations."

“I think it’s time to expand our business both domestically and internationally as quickly as possible.”

“I think it is necessary for the BMW Group to be the key public relations target in the next phase.”

As a relative of the company's general manager Lu Guanqiu, Lu Xinyu attaches great importance to the development of the company.

Compared with other private auto parts companies, Wanxiang Group's foundation is obviously much stronger.

We have supplied some parts to BMW Group before, but the business between the two parties is not particularly large.

In 1969, Lu Guanqiu took over the Ningwei Commune Agricultural Machinery Repair Factory, which initially produced universal joints, ship nails, iron rakes and other products.

After ten years of development, the factory has grown to more than 300 people.

In 1979, the factory was renamed Xiaoshan Universal Joint Factory, focusing on the production of specialized automotive universal joints, and expanded to automotive parts such as automotive drive shafts and car shock absorbers.

In 1984, their factory began to export and earn foreign exchange, and 3 sets of universal joints were exported to the United States, which was the first order of Huaxia auto parts exported to the United States. Last year, Lu Guanqiu bought out the factory's equity for 1500 million yuan.

Recently, all the procedures have been sorted out, and then Vientiane Group was officially registered and established.

Faced with this new situation, everyone in the company naturally wants to work hard and achieve some results.

"For parts such as transmission shafts, bearings and shock absorbers, BMW Group mainly produces them itself."

“So even though the prospects seem very promising, in reality you can’t get the best piece of the pie.”

"Should we focus on finding cooperation with customers such as Shanghai Volkswagen, FAW-Volkswagen, and Shanghai Automobile Manufacturing Plant? Will there be more opportunities?"

Lu Guanqiu has specifically investigated and understood the supply chain structure of each domestic OEM.

He is considered an old hand in this industry.

In recent years, their factory's technological progress has been relatively rapid.

Compared with international auto parts giants, there is definitely still a gap, but among domestic peers, there are not many that do better than them.

"Yes, these parts for the BMW Group were indeed mainly produced by Nanshan Technology in the past."

“But I think some of their strategies have changed now.”

"It is definitely impossible for us to monopolize the supply of these parts, but it is still hopeful to take 30% of the market share."

"Although it's only 30%, that's still hundreds of thousands of vehicles sold, and it's still the largest single customer in the country."

Lu Xinyu is still very optimistic about the cooperative business with BMW Group.

Even though there has been no development in the past few years, there has only been cooperation on individual parts and individual car models.

However, it was through these collaborations that Lu Xinyu realized that there is still a lot of room for future cooperation.

"Didn't Mercedes-Benz open a new factory in Shanghai?"

"Nanshan Technology must have built a branch factory in Shanghai, but it is unlikely that all parts will be produced here."

"We can give priority to providing supporting services for the models produced by Mercedes-Benz's Shanghai factory."

“The chances are better this way.”

After thinking about it for a while, Lu Guanqiu felt that what Lu Xinyu said made sense.

If the company wants to grow and develop, it certainly cannot do without the cooperation of the BMW Group.

Otherwise, the pressure for future development will be very great.

"I learned that Nanshan Technology will still produce parts such as shock absorbers in its Shanghai factory."

“But half shafts and steering knuckles are likely not within the scope of investment in the first phase.”

“I think this is a new opportunity for our factory.”

"Nanshan Technology's workers' wages are so high, and the management costs in all aspects are also relatively high."

"I think our parts quotation can be at least 15% cheaper than the other party."

"Against the backdrop of a sharp rise in commodity prices and rising material prices, the BMW Group should be interested in expanding its cooperation with us."

Lu Xinyu directly put forward his own cooperation plan.

This made Lu Guanqiu feel relieved.

If you have a specific goal, this matter will be much easier.

……

"Boss Jiang, there are many more parts companies that want to cooperate with us during this period."

"It seems that all domestic private enterprises engaged in the auto parts business want to rush into our supply chain."

Wang Feng, head of the purchasing department, feels like he’s receiving customers every day recently.

From morning to night, I have to meet at least 4 waves of suppliers a day.

Considering the group's future supply chain development strategy, he couldn't just reject them outright.

However, as more and more new parts companies emerged, he became worried that something might go wrong.

So I reported it specifically to Jiang Hui.

"The direction of reform this year has been completely determined."

“Everyone’s mindset is starting to change.”

"In the past, many factories were still restrained, or they were affiliated with collective enterprises and did not want to run the business too well."

"It's different now. The business can be your own, so naturally you have to find ways to grow and develop as quickly as possible."

Jiang Hui didn't find the current situation strange at all.

The trend of the times has arrived, and naturally everyone wants to get rich.

"It's exactly as you said."

"During this period, there are mainly two types of companies that have come to us for cooperation."

"One is a newly established private auto parts company that wants to get orders from us."

"The other one has been established before, but has not yet cooperated with us."

"For some of these companies, the nature of their previous businesses was not particularly clear."

"Wanxiang is a typical example."

As the head of the purchasing department, Wang Feng naturally understood what Jiang Hui said.

The spring for private auto parts companies has truly arrived.

"If these companies are interested in joining our group, they can consider using it on BMW Light first."

"It just so happens that the production capacity of many parts at Nanshan Technology is quite tight. Freeing up the production capacity of the BMW Sunshine can better meet the demand of other models."

"As our group's entry-level model, the BMW Sunshine will face greater cost pressure."

"The technical requirements in all aspects are relatively low, so we can use them to cooperate with private auto parts companies."

Although Jiang Hui really wants to support the development of domestic auto parts companies, he does not act recklessly without any principles.

If the BMW Group's reputation is damaged because of this, it would be a loss.

Therefore, choosing BMW Light as an experiment is a compromise.

This model itself is an entry-level model, and all aspects of technology have been thoroughly mastered.

The various technical thresholds are not that high, so it would be best to use it as a test field.

"This is a good plan."

"There are so many auto parts companies, and many of them don't have official mass-produced parts yet."

"If we cooperate with them, I have no idea whether the quality can be guaranteed in the future."

"If we can have a BMW Light as a transition, the situation will be much easier to control."

"Even if some accidents occur at that time, everything is still within the controllable range."

Wang Feng didn't expect Jiang Hui to give him such clear instructions so easily.

You know, when you are working in the workplace, it is common for your superiors to not give you clear instructions.

There are definitely quite a few people who have suffered losses because of this reason.

"For these new suppliers, the purchasing department can work with the R&D center to provide them with some training."

"For those companies that are willing to proactively improve their technology and management capabilities, we can focus on cooperation in the future."

"Those companies that only care about making money and are unwilling to invest can be eliminated later."

Jiang Hui is not here to do good deeds, but to develop his own supply chain for the BMW Group.

If any factory fails to live up to expectations, then there will be nothing to worry about.

Wang Feng naturally fully understood this.

……

"Boss, this is a preliminary list I compiled of auto parts companies that have newly established factories in Shenzhen in the past two months."

"All these manufacturers are centered around the BMW Group."

"More than half of them are directly supplied to BMW Group, and a small part is provided to related companies such as Nanshan Technology and Nanshan Engine."

Yao Yiming is very concerned about anything related to the BMW Group.

During this period, many new companies were established in Shenzhen.

There are people from all walks of life.

However, companies related to auto parts are still the focus of Yao Yiming's attention.

Because he knew very well that the future of these companies was more certain than that of other newly established companies.

During this period, although no one had counted the life cycle of newly established companies, Yao Yiming felt that many companies disappeared within three years.

It is definitely not worth wasting too much time on such a business.

But the situation is different for auto parts companies.

These auto parts companies that came to Shenzhen to build factories basically already have established cooperative relationships.

It's difficult to fail.

The only difference is how fast the development will be in the future.

Those that are more motivated may become domestic auto parts giants and one of Shenzhen’s business cards in the future.

As for those that are not competitive, they may get a batch of orders from the BMW Group, live a comfortable life for a few years, and then be slowly eliminated.

"Didn't the BMW Group open a new factory in Shanghai?"

“Why are there so many new parts companies setting up factories here?”

Liu Tianwu follows the movements of the BMW Group every day, so he naturally knows that a number of parts companies have followed Mercedes-Benz to open factories in Shanghai.

I didn’t expect that there have been so many new auto parts companies emerging in Shenzhen recently.

"Leader, there must be a lot of newly established auto parts companies in Shanghai."

"But relatively speaking, we definitely have more numbers and more opportunities here."

"Although the BMW Group has begun to set up factories in other places, its headquarters is still in Shenzhen after all."

"For those parts companies that want to maintain close communication with the BMW Group, setting up their company directly in Shenzhen or opening a branch here is the best option."

Yao Yiming is familiar with the situations of various auto parts companies.

Naturally, he was also very concerned about why everyone was so active in coming to Shenzhen.

"Since these companies are all supporting enterprises of the BMW Group, we should try our best to provide them with various business services and preferential policies."

Liu Tianwu thought about it and gave a specific instruction.

Anyway, the preferential policies are given to every factory, so they must be of some value. (End of this chapter)