The car giant started by marrying the daughter of the king

"Wols, Mercedes has established a joint venture with a Chinese car company and will officially produce E-series sedans in China this year."

"Can our company also consider formally contacting Chinese car manufacturers?"

Vardy has always been paying close attention to the performance of old rival Mercedes.

In many markets, once one party enters, the other party will follow suit.

Although the positioning of the models they designed are slightly different, they are basically competitors of the same level.

For example, the BMW 3 Series and Mercedes C-Class are competitors.

The 5 Series and E-Class are competitors.

The 7 Series and S-Class are competitors.

The situation is similar in the sports car market and SUV market.

Moreover, the brand influence and sales volume of both parties are relatively close.

In addition, they are brands from the same country, so they are the most significant competitors internationally.

"Although China's auto market has developed rapidly in recent years, most models are mid- to low-end models, and the sales of luxury cars should be relatively limited."

"I think Mercedes' move is a little early. We can consider waiting for another year or two."

It’s not that Walls doesn’t want to enter the Chinese market, but he feels that it’s too early to set up a joint venture.

After all, the establishment of a joint venture will definitely require the construction of a new factory.

A factory, even if it is smaller, can produce tens of thousands of vehicles a year.

But in his opinion, China's luxury car market cannot consume BMW's production capacity of tens of thousands of vehicles for the time being.

"That is a problem, but instead of setting up a joint venture, we can directly set up an independent sales company and import some of our products to China for sale."

“I think it’s worth considering.”

"This will also allow our staff to become more familiar with the Chinese market and prepare for the next step of building a joint venture factory."

After Vardy said this, Walls did not object immediately.

If you just set up a sales company to import BMW models and sell them, the investment will be relatively much less.

During this process, we fully analyze market changes to see whether it is suitable to produce car models locally.

This is a more appropriate solution.

"You make the arrangements, and we will all go to Huaxia for an inspection in a while."

"If it's appropriate, we'll start with the import car business."

"We have also started to contact some distributors. After all, even if we set up a joint venture, we cannot sell all our products in the joint venture."

"The sales and channel expansion of imported cars is a must."

Walls made a quick decision.

The opponent has already taken action, but there is no movement at all on my side. It seems unreasonable.

Now Mercedes has directly established a joint venture to produce cars, while BMW imports them through sales companies.

It is not an immediate answer as to which method is more suitable.

The board of directors should fully understand my decision.

……

If Mercedes and BMW are the two luxury car brands with the strongest comprehensive influence and sales in Germany.

Then Porsche is the brand with the strongest overall influence and is a level higher than theirs.

Although Porsche has no plans to build a factory in China to produce cars.

However, the news that Mercedes and a Chinese automaker established a joint venture to produce cars still brought them a certain shock.

"Lai, you know the situation in China best. Do you think we should also consider formally entering the Chinese market?"

As the president of Porsche, Buz values ​​Lai Ping as the design director very much.

Otherwise, they would not have appointed a Chinese as the company's design director for the first time, which is something that no European car company has ever done before.

"Since 1978, China has broken many of its past practices and started to reform and move towards the world."

"By 1989, a variety of policies in this regard were fully formulated, and the changes were enormous."

"Along with this change, the economy has also developed very rapidly, maintaining a double-digit GDP growth rate every year."

"At the same time, the speed of development of China's automobile industry has exceeded many people's imagination."

"In particular, the growth and development of the BMW Group in China has greatly enhanced the strength and influence of China's automotive industry."

"The scale of China's automobile market is now quite large in the world."

"I think we can consider setting up a sales company in China and officially start our business."

"Of course, in the early stages, I think we should focus on developing business in China's big cities."

"We will expand our business based on the situation later."

Lai Ping gave a more pertinent solution.

If you follow his advice, you may not necessarily achieve very good results, but you will most likely not lose money.

After all, if Porsche products are directly imported into China for sale, the additional costs will mainly be transportation fees, tariffs, and operating expenses of local sales companies.

These costs will eventually be amortized into the selling price.

As long as it can sell a few hundred cars every year, this sales company will definitely not lose money.

Even if only a few dozen cars are sold, it may be possible to break even.

The prerequisite is to hire employees locally in China, so that the management cost will be very low.

If we arrange senior executives directly from Deutsche, the cost for any one person will be more than 100 million RMB per year.

That's not such a good deal.

Of course, Lai Ping did not mention this suggestion.

He is a Chinese, and his direct suggestion to Buzz to hire local Chinese to manage the sales company would most likely not be accepted.

The key is that if you do this, there are indeed certain risks.

After all, there is a process of mutual understanding between people.

"You have a point. Let's import a few models first to test the waters."

"Although China's per capita income is still relatively low, the population base is large, so there are still some wealthy people."

"We will gradually promote our Porsche brand among wealthy people. When the market scale expands further in the future, our sales volume should also increase rapidly."

Baz thought about it for a moment and felt that Lai Ping's suggestion made sense.

Soon, Porsche arranged for a deputy director of the sales department to go to China to start setting up a Chinese branch.

A series of marketing plans have also been prepared to make the name of Porsche appear in the vision of Chinese people as much as possible.

……

"Mr. Geng, Porsche, Mercedes and BMW from Germany have all started to enter the Chinese market."

"I think the group can discuss with Volkswagen to import some Audi brand models to FAW-Volkswagen for production."

Zhao Guangming has naturally paid attention to the various changes in the domestic automobile market during this period.

It can be said that since 1992, the changes in China's automobile market have been greater than in any previous year.

In just a few months, several joint ventures have been established, and several brands have officially entered China to start business. These things naturally brought a great impact to FAW.

"Compared with Mercedes and BMW, Volkswagen's Audi brand will be embarrassing."

"The exterior designs of their various sedans are not as beautiful as the Hongqi A4 and Hongqi A6."

"Otherwise, they wouldn't agree to work with us on OEM."

"I have specially arranged for someone to confirm that our two models have performed very well in the market after being sold in Europe through Audi's OEM license."

"Hongqi BMW has also maintained production orders of nearly 2 vehicles per month for several consecutive months."

"In this case, if we ask Audi to produce some of its models in China, what products should they use to produce them?"

After Geng Weidong said this, Zhao Guangming also realized the key.

Audi’s two best-selling products now are the products produced in cooperation with Hongqi BMW.

We can't let them sell these two products at FAW-Volkswagen, right?

In other words, you can't just replace the Hongqi BMW models with Audi logos and then sell them directly in China, right?

Consumers are not stupid either.

"But if we do nothing, the luxury car market will have little to do with our group in the future."

"And the sales of Mercedes and BMW models will have some impact on the sales of Hongqi A6 and Hongqi A8."

Zhao Guangming had a headache, wondering why the market was changing so fast.
When he first started working, the automotive industry produced less news in a year than it does in a month now.

"I read in the news that Toyota launched the Crown Majesta last year. This car is a luxury sedan that competes with the Lexus LS series."

"And from the perspective of appearance design, this car is quite competitive."

"We can consider communicating with Toyota Motor to see if we can also introduce this car for production."

Geng Weidong did not try to find a solution from Volkswagen, but instead turned his attention to Toyota.

On a global scale, Toyota's influence is no less than that of Volkswagen.

"That's fine."

“I just don’t know what Toyota is thinking.”

Zhao Guangming's eyes lit up, feeling that the company now had another option.

As for asking Toyota to import Lexus for production, he had never thought about it at all.

Because similar topics have been discussed before, Toyota has no intention of producing Lexus models overseas.

As the most important market, America does not produce Lexus, let alone China.

"Whatever your idea is, understand it first."

"It would be great if it succeeds, but there is no loss if it fails."

Since Geng Weidong said so, Zhao Guangming naturally had no objection.

Soon, FAW took action.

……

"President, the automobile industry in China has been very busy in the past few months."

"Auto giants around the world have set up joint ventures or sales companies in China, and are optimistic about the development of China's auto market."

"We have also arranged for people to conduct investigations and surveys, and we feel that the Chinese market is still very worth looking forward to."

As the sales director of Hyundai Motor, Jin Chenggang has always attached great importance to the neighboring market with the largest population.

But due to special reasons, the current relationship between Goryeo and China is still quite special.

The two sides have not yet established diplomatic relations.

"Do you think we need to set up a joint venture in China to produce cars?"

Zheng Shiyong was very smart and immediately understood the meaning of Jin Chenggang's words.

"Yes, I heard that the negotiations between Jinwatai and Huaxia have basically come to a conclusion."

"We will probably formally establish diplomatic relations this year. Taking this opportunity, we will set up a joint venture with Chinese automakers to produce cars."

“I think it’s a very good opportunity.”

Modern cars have developed very rapidly in recent years, but their overall size is still far behind that of later generations.

Jin Chenggang naturally hopes to increase the company's sales through various means.

China, separated by a sea, is naturally one of his targets.

"Your idea is good, but our products have not been sold in China before."

“What if we suddenly build a car production plant there and the sales are very poor?”

After Zheng Shiyong said this, Jin Chenggang immediately said: "I think the sales volume should not be particularly bad."

"Many Chinese consumers now have a high degree of recognition for international brands."

“Even if no one has heard of this brand before, it can easily gain recognition with proper promotion.”

“This is exactly the opposite of the situation in our country.”

"When you go shopping in the supermarket, our domestically produced fruits and vegetables are synonymous with high-end, while imported ones are not that good."

"But in China, imported goods mean high-end products."

"I think it is appropriate for us to enter this market while this perception has not changed."

Apparently, Jin Chenggang has been studying the Chinese market for some time.

Otherwise, it would be impossible to express something that ordinary people cannot realize.

"It's not like there weren't Chinese car manufacturers that contacted us before, but the two sides didn't have in-depth exchanges."

"Since you think the time is right, let's have a good talk."

“See which partners are the best fit for us.”

After hearing what Zheng Shiyong said, Jin Chenggang breathed a sigh of relief.

This matter is beginning to take shape.

"President, why don't I go to China to investigate next month?"

"FAW, Shanghai Automotive Group, and Shouqi Group have all contacted us before."

"I think the company will give priority to selecting partners from the first batch of manufacturers that contact us."

Jin Chenggang was ready to implement this matter as soon as possible.

We are starting negotiations now and will formally establish the joint venture within this year, but we estimate that products will start selling next year.

This rhythm is still acceptable.

If it was any later, he felt that he might have missed the opportunity.

By then, the cost to achieve the same effect may be even higher.

This is a situation that Jin Chenggang does not want to see.

Besides, so many international auto giants have already rushed in.

In a way, they help Hyundai Motor do some validation.

The risk of this road is very low. (End of this chapter)