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The news of the Shenzhen-Hong Kong S1 sedan rolling off the production line made the front page of the People's Daily.

The headline is eye-catching: "A New Breakthrough for Domestic Automobiles - Shenzhen-Hong Kong S1 Officially Launched".

The report detailed the car's features: a 1.6-liter engine, a five-speed manual transmission, a fuel consumption of 7.5 liters per 100 kilometers, and a price of 88,000 yuan.

The configuration isn't luxurious, but it has everything you need...

Air conditioning, radio, electric windows, and an anti-theft system independently developed by Shenzhen-Hong Kong Group.

The report concludes by quoting Suning: "Shenzhen-Hong Kong Automotive aims to make good cars that Chinese people can afford."

The news was met with a strong market response.

Even before the 4S stores of Shenzhen-Hong Kong Automotive across the country were fully built, the inquiry hotline was already overwhelmed with calls.

"Is your S1 sedan really as good as the reports say?"

"Is 88,000 the base price or the final price after taxes and fees?"

"When will you have a car available? I want to order one!"

At the Shenzhen Shengang Auto flagship store, the manager was extremely busy.

"Manager, we received over a hundred inquiries today!" reported salesperson Xiao Zhang.

How many people have booked test drives?

"More than two hundred people! We only have three test drive vehicles, and the waiting list is until next month!"

The manager was both excited and worried.

What's exciting is the positive market response, but what's worrying is the inability to keep up with production capacity.

He immediately called Suning, "Mr. Su, the situation is even better than we expected! In Shenzhen alone, we have over a thousand potential customers! But our monthly production capacity is only five hundred units, which is simply not enough to meet demand!"

On the other end of the phone, Suning remained calm. "Don't rush, take it one step at a time. Ensure quality first, then discuss quantity. Tell customers that if they order now, delivery will be within three months. Those who are willing to wait can wait, and those who are not will not be forced."

"Three months...isn't that too long?"

"We have to make them wait," Suning said. "The longer they wait, the higher their expectations will be. As long as they don't disappoint once they get the car, word-of-mouth will build up."

The manager thought about it and agreed.

Now, even joint venture cars on the market have to wait, and some popular models can take up to six months to arrive.

Three months is really not a long time.

Following Suning's instructions, he then posted a notice in the store: "Shenzhen-Hong Kong S1 is now available for pre-order, with delivery expected within three months. The first 1,000 pre-order customers will receive three years of free maintenance."

On the day the announcement was posted, more than 300 orders were received.

Our clients are all kinds of people—small business owners, white-collar workers, and even retired cadres.

An elderly man in his sixties brought his son to look at cars.

The old man touched the body of the S1 and said with emotion, "When I was young, I worked at FAW. Back then, I wondered when we Chinese would be able to manufacture our own cars. After forty years, we've finally waited for that moment!"

The son chimed in, "Dad, this car may not have the same features as some joint-venture cars, but it's cheaper! It's only 88,000 yuan, while a Santana would cost 180,000!"

"So what if it's cheap?" the old man glared. "Can't domestically produced cars be cheap? Do they have to be expensive to have face? I think this car is pretty good, practical! I'll order it!"

"Would you like to take it for a test drive first?"

"Great! How does it feel to drive our own domestically produced car?"

There was also a female customer in her thirties who came with her husband.

She is a primary school teacher and has an old motorcycle at home that she has always wanted to get a new one.

"I read the report that this car has good safety features," the female teacher told the salesperson. "It's for the three of us; safety is the most important thing."

"Rest assured, the S1's body is made of reinforced steel, with anti-collision beams at both the front and rear," the salesperson explained in detail. "Moreover, we use military-grade steel customized by Shenzhen-Hong Kong Group, so the quality is absolutely guaranteed."

"That's good." The female teacher signed the order on the spot. "Support domestic products!"

Such scenes are constantly playing out at Shenzhen-Hong Kong car dealerships across the country.

A month later, the first batch of 500 S1s was delivered.

The vehicle delivery ceremony was held at the automotive industrial park in Pudong, Shanghai.

Five hundred vehicles were lined up neatly, like an army waiting for inspection.

Car owners came from all over the country, and everyone had excitement on their faces.

Suning personally attended the event and handed over the keys to the first car owner.

He was a middle-aged man in his forties, surnamed Wang, who ran a building materials business.

He took the keys and said excitedly, "Mr. Su, I've been driving for over ten years, from minivans to used Santanas. This is my first new car, and it's even made in China! I'm so proud!"

"Mr. Wang, thank you for your trust." Su Ning shook hands with him. "If there are any problems with the car, please contact us anytime. Shenzhen Auto promises a three-year/100,000-kilometer warranty."

"Good! Good!"

The handover ceremony was very grand, and dozens of media outlets attended.

The camera captured the smiles on the faces of car owners as they drove away in their new cars.

The real test will begin in the days to come.

Once a car is sold, whether it's good to use and durable is up to the owner.

The sales department monitors the feedback from the after-sales department daily.

On the first day, I received more than a dozen calls, all asking how to operate the system and how to use the functions.

The next day, a customer complained of unusual noises from the windshield wipers. The after-sales service team immediately went to check and found that it was an installation problem, which was resolved on the spot.

A week later, feedback on long-distance usage began to emerge.

"Manager Li, I drove my S1 to Guangzhou, a round trip of 500 kilometers, and there were no problems at all!"

"The fuel consumption is even lower than the official data; it only uses seven liters per 100 kilometers with the air conditioning on!"

"The chassis is very stable, and it doesn't sway at high speeds!"

But there are also problems.

One customer said the clutch was a bit heavy, and his legs would ache after driving for a long time.

Another customer said the interior had too much plastic feel and made a loud, rattling sound when tapped.

Manager Li wrote down all this feedback and reported it to Suning every week.

"Mr. Su, overall the reviews are good. People think the car is sturdy, fuel-efficient, and spacious. The main problem is the rough interior and the average quality of some small parts."

"The interior issues will be addressed in the next batch," Suning instructed. "As for small parts, change suppliers. Tell the purchasing department not to just go for the cheapest option; quality is the top priority."

“Okay,” Manager Li said. “There’s something else. Some joint venture brands have started lowering their prices. The Santana has dropped by 10,000 yuan, and the Jetta by 8,000 yuan. It’s clearly targeting us.”

“As expected,” Suning said. “They lower their prices, but we won’t. Our prices are already at rock bottom; any further reduction would mean we’d lose money. But we can offer extras—upgraded leather seats, a sound system, and a GPS navigator. The value is about the same, but customers will feel they’re getting a better deal.”

"understand!"

As expected, Shenzhen-Hong Kong Auto announced: "Starting today, the S1 Luxury Edition will come with a free configuration upgrade package worth 10,000 yuan."

As soon as the news came out, orders surged again.

Three months later, the monthly sales of the Shenzhen-Hong Kong S1 exceeded 2,000 units.

Although there is still a gap compared to joint venture brands, this achievement is quite remarkable for a brand-new domestically produced model.

……

What surprised the industry even more was that Shenzhen-Hong Kong Auto announced the launch of the S2 project – an SUV model.

“Chinese families need more space and cars that can handle complex road conditions,” Suning said at the press conference. “The Shenzhen-Hong Kong S2 will be a compact SUV, priced at around 100,000 yuan, and will be launched next year.”

When pressed by the media, "Mr. Su, will Shenzhen-Hong Kong Automotive produce high-end cars?"

“Yes,” Suning answered confidently, “but that’s the third step. The first step is to make cars that ordinary people can afford; the second step is to make cars that are suitable for Chinese families; the third step is to make cars that make Chinese people proud. We’ll take it one step at a time.”

These words were met with thunderous applause.

That evening, at the celebration banquet, everyone raised their glasses to toast Suning. "President Su, to be honest, I was hesitant when you first said you wanted to build cars. But now, I'm convinced! You were right, Chinese people need their own cars!"

Su Ning toasted each of them, saying, "Gentlemen, this is just the beginning. There's a long road ahead and many challenges. But as long as we persist in doing the right thing and the difficult thing, we will definitely succeed."

"Yes! It will definitely work!"

The banquet hall was brightly lit.

Outside the window, on the streets of Shenzhen, more and more Shenzhen-Hong Kong S1 sedans began to appear.

They weave through the traffic, and although they are not yet conspicuous, they have already found their place.

……

After the Shenzhen-Hong Kong S1 quickly gained a foothold in the domestic market, Suning called the senior executives of the automotive division to his office for a meeting. "In first- and second-tier cities in China, joint venture brands have too deep a foothold, and we can't compete with them for the time being," Suning said bluntly. "But third- and fourth-tier cities and rural markets are our opportunities."

The marketing director opened his notebook. "Mr. Su, we've done our research. In third- and fourth-tier cities and rural areas, car ownership is still very low, but demand is growing rapidly. Many people are buying their first car with a budget of less than 100,000 yuan. Our S1 fits that perfectly."

“Yes.” Suning nodded. “Moreover, there are very few joint venture brand 4S stores in these areas, and the service network is not perfect. What we need to do is open stores in the counties.”

"Open up to the county level?" The sales director hesitated. "How many cars can you sell in a county? The cost of building a dealership is too high, it's not worth it."

"We won't build 4S stores, we'll build 2S stores." Suning was clearly prepared. "We only need sales and basic maintenance functions, which requires less investment and is more flexible. If one county isn't enough, we'll cover several counties. Our slogan is—'Shenzhen-Hong Kong Auto, a store in every county.'"

"What about customer service? We don't have enough after-sales staff!"

"We train local auto mechanics," Suning said. "We provide training, and after they pass the assessment, they are authorized to operate as authorized repair shops. We supply all the parts and provide technical support. This solves the after-sales problem and also boosts local employment."

The executives looked at each other and all agreed that the plan was feasible.

“In addition,” Suning continued, “the rural market has a unique characteristic—people want cars that can carry not only passengers but also cargo. Therefore, we need to accelerate the development of the S1 hatchback version, increase the trunk size, and raise the chassis. We are not selling sedans, but ‘multi-functional family cars.’”

The technical director wrote it down, "Understood, I'll go back and adjust the design plan."

"If this is the domestic layout, what about overseas?" the export manager asked.

"Our main focus overseas is the Asian, African and Latin American markets," Suning said. "Southeast Asia, Africa and Latin America have similarities to our domestic market—limited purchasing power, a need for durable and reliable cars, and price sensitivity."

"Does our car meet these requirements?"

“Yes, that's right,” Suning said confidently. “The S1 uses mature technology; although it's not advanced, it's reliable. Moreover, we have good cost control, so we have a price advantage. An S1 exported to Africa sells for ten thousand US dollars, which is one-third cheaper than Japanese cars.”

"But brand awareness..."

"So we need to start with inter-departmental cooperation projects," Su Ning said. "The country has many foreign aid projects now, and we can get involved. We can include the vehicles as part of the aid supplies, or participate in local infrastructure construction, and use the convoy to showcase them. Let the vehicles get running first, let the locals see and use them, and the brand will naturally grow."

The export manager's eyes lit up. "That's a great idea! I heard there's a highway project in Ethiopia that needs a batch of engineering and support vehicles. We can give it a try."

“Go and negotiate,” Suning decided. “We can lower the price, and even offer credit first. As long as we can get the cars in and open up the market, it’s worth losing some money in the early stages.”

"understand!"

In the following months, Shenzhen-Hong Kong Auto began operating on two fronts.

Domestically, a sales network covering third- and fourth-tier cities and rural areas has been rapidly established.

Shenzhen-Hong Kong Automotive has established a regional center in each province, responsible for training, parts supply and technical support.

Then, franchise stores will be developed on a county-by-county basis.

The franchise terms are very favorable—as long as you have a 200-square-meter storefront and pay a deposit of 50,000 yuan, Shengang Auto will provide display vehicles, training, and unified branding.

You get a 5% commission for each car sold.

As soon as the news was released, applications poured in.

Many owners of auto repair shops in the county saw an opportunity.

They already have a venue and workers; adding some sales features will allow them to make more money.

In a county in Shangqiu, Henan, Wang Jianguo, the owner of Lao Wang Auto Repair Shop, was the first to join the franchise.

He hung up a sign for Shenzhen-Hong Kong Auto at the entrance of the store and displayed two S1 cars.

On its first day of opening, it was packed with people.

"Is this car really worth 88,000?"

Can I get a loan?

"Can our county repair it?"

Wang Jianguo answered according to the script he had been trained to say, "It really is 88,000! You can get a loan, and you can drive it away with a down payment of 20,000! Our shop is an authorized repair center, so we can handle all the maintenance and repairs!"

He sold three cars in one week.

As the news spread, more auto repair shop owners inquired about joining the franchise.

In just one month, Shengang Auto developed more than 50 franchise stores in Henan province.

The rural market is booming.

Shenzhen-Hong Kong Auto launched an "agricultural machinery trade-in" program...

Farmers can use their old tractors or farm vehicles as collateral to pay part of the price of a new car, and then they can get an S1 hatchback.

This vehicle can carry people, and with the seats removed from the trunk, it can also be used to carry cargo, making it a multi-purpose vehicle.

In Hebei, a large-scale grain farmer named Lao Liu used two old tractors to pay 30,000 yuan in exchange for an additional 58,000 yuan to drive away a S1 tractor.

He said happily, "This is much more comfortable than a tractor! I don't have to get wet in the rain, and it's more respectable to go to town to sell grain!"

Old Liu's story was made into an advertisement by Shengang Auto and broadcast on the county-level TV station.

The results were surprisingly good—the farmers felt that the vehicle was designed just for them.

We are also making progress in overseas markets.

The export manager personally led a team to Ethiopia and reached a cooperation agreement with the Chinese contractor for that highway project...

Shenzhen-Hong Kong Automotive will provide fifty engineering and support vehicles at a price 20% lower than the market price, but requires that all vehicles bear the Shenzhen-Hong Kong logo, and that the vehicles can be transferred to local departments at a low price after the project is completed.

The contractor agreed.

For them, cheap cars are the bottom line.

Fifty cars from Shenzhen and Hong Kong drove into Ethiopia.

There are pickup trucks, SUVs, and S1 sedans.

The prominent Shenzhen-Hong Kong logo on the vehicle stands out on the dirt roads of Africa.

After driving it, the local driver gave a very honest review: "Although it's not as durable as a Toyota, it's cheap! It's easy to repair when it breaks down, and the parts aren't expensive."

After the project was completed, the vehicles were transferred to local authorities as planned and became official vehicles.

Running around the streets of Ethiopia every day is the best advertisement.

Following that, Shenzhen-Hong Kong Automotive secured a taxi procurement order in Kenya...

One hundred S1 taxis serve as taxis in the capital, Nairobi.

Shenzhen-Hong Kong Automotive promises a three-year warranty and also trains local mechanics.

After driving onto the S1, taxi driver Joseph said to his passenger, "This is a Chinese car, cheap, spacious, and comfortable!"

Passengers spread the word, and Shenzhen-Hong Kong Motors gained its first reputation in Kenya.

Three months later, Suning looked at the report and smiled.

Domestically, Shenzhen-Hong Kong Auto's monthly sales exceeded 5,000 units, with 70% of them coming from third- and fourth-tier cities and rural markets.

Internationally, it has already entered five African countries and three Southeast Asian countries.

Although the total volume is still small, with only a few hundred units exported each month, the market has opened up.

"Mr. Su, shouldn't we be expanding into first- and second-tier cities?" the sales director asked.

“No rush.” Su Ning shook his head. “First, we need to thoroughly penetrate the third- and fourth-tier cities and rural markets, and stabilize the markets in Asia, Africa and Latin America. Once we have scale and a good reputation, we can then turn our attention to the first- and second-tier cities.”

Will joint venture brands retaliate by lowering prices?

“Definitely,” Suning said, “but they can’t lower prices too much. Their costs are high, so their room for price reduction is limited. Moreover, they won’t disrupt their entire pricing system for our sake. We, who have nothing to lose, are not afraid of those who have something to lose; they, who have something to lose, have more concerns.”

Sure enough, joint venture brands have started to make moves.

Volkswagen announced a price reduction of 5,000 yuan for the Santana, but this is only applicable to some third- and fourth-tier cities.

Toyota has also launched a low-end version of the Vios, with the price reduced to 90,000 yuan.

However, instead of following the trend of price reductions, Shenzhen-Hong Kong Auto launched a "five-year/100,000-kilometer warranty"—two years longer than the industry standard.

This promise is more attractive than a price reduction for consumers who value practicality and are concerned about quality.

"A cheap car is temporary, but good quality is what lasts." That's the slogan of Shengang Auto.

The market responded with sales figures – the monthly sales of the Shenzhen-Hong Kong S1 exceeded 6,000 units.

Rural grandpas are driving them, small business owners in county towns are driving them, and even taxi drivers in Africa are driving them.

Shenzhen-Hong Kong cars have truly entered thousands of households and gone abroad.

And all of this is just the beginning.

Suning knows that the automotive industry is a marathon, not a sprint.

Being a few steps ahead now doesn't matter; the key is to keep running.

...(End of this chapter)