Spring Breeze Twenty Years

Chapter 580 Agreement

Xiao Wei took the document and flipped through it: It is proposed to agree to Liaodong Brothers Industrial Company's request to act as the agent for the sale of our Xiali and Dafa cars in Northeast China. The proposed conditions for the agency proposed by Brothers Industrial Company are as follows: 1. The initial delivery of vehicles shall not be less than 50 vehicles; 2. The cumulative sales of all models throughout the year shall not be less than 500 vehicles; 3. A dedicated sales department shall be established and the sales work of our cars shall be carried out diligently; 4. Payment for goods shall not be delayed.

If any of the above conditions cannot be met in a given year, the agency will be terminated, but the sales qualification can be retained. If the above conditions cannot be met for two consecutive years, the sales qualification will be terminated, and the delivered vehicles will not be returned or exchanged.

Xiao Wei closed the file and asked Factory Director Li, "May I ask about your current sales situation in the three northeastern provinces?"

Factory Director Li glanced at Section Chief Han, who said, "Our Xiali cars are selling extremely well nationwide right now, and demand is basically outstripping supply. These conditions are the result of careful consideration. To be honest, we've already taken into account that you are a private company and even lowered the prices a bit."

Xiao Wei shook his head, threw the documents on the table, and said, "Forget it. I only had this idea of ​​selling cars in the first place, something I did on a whim. You guys are making it sound like child's play, it's pointless. Let's leave it at that for now, okay?"

Factory Director Li said, "Xiao Zhang, just say what you think. We're discussing this together."

Xiao Wei glanced at the documents on the table and said, "The first order of fifty units and not owing you any money are minor issues. But the claim of selling no less than five hundred cars a year is a bit of a joke. How many do you produce in a year? How many have you sold nationwide in the past two years?"

To be honest, it doesn't matter what car I use. Chongqing Changan, Shanghai Volkswagen, Guangzhou Peugeot, Nanjing, Nanchang, they're all the same to me. If all else fails, Songhuajiang Jinbei is right here in Fengtian, which is close to me. Why would I bother? Before coming here, Chen Hui had looked up information on all the major car manufacturers in China, so Xiao Wei had a certain understanding of this area.

Factory Director Li said, "Our cars are priced at just over 70,000 to 80,000 yuan each, while Daihatsu is less than 40,000 yuan. How much is Changan? For the same cargo capacity, it costs just over 60,000 to 70,000 yuan. The Santana is now 180,000 yuan, and the Peugeot is over 180,000 yuan. Our cars have a clear advantage, and we also have an advantage in after-sales service. They all rely on imported parts, while we basically produce them ourselves, so our maintenance costs are quite low."

Xiao Wei said, "Since I'm selling, I'll definitely sell well, I need to make money too. But if the volume is fixed, it just doesn't feel right. Let me think about it some more, and you guys should think about it too, so as not to delay everyone's business. I've already made appointments with Shanghai Volkswagen, Chongqing Changan, and Guangzhou Peugeot, and I need to go and talk to them in the next few days. Let's discuss it again when I get back, okay? I came here first because I'm closer to you guys."

Factory Manager Li asked, "Xiao Zhang, if I may ask a question, how big is your company? How much capital can you currently allocate for investment?"

Xiao Wei glanced at Factory Director Li, took out cigarettes and offered them to Factory Director Li and Section Chief Han, saying, "Our company is just starting out, still in its early stages. We can't compare to yours yet. Right now, we've only bought some land in Northeast China to build buildings and opened some restaurants and food factories. Our monthly revenue is only around 20 million for now. As for funds, I haven't calculated it carefully, but in the short term, I'll scrape together about 200 million. Any more than that and it definitely won't work."

Section Chief Han exclaimed in surprise, "Two hundred million? You guys are incredibly powerful! How come I've never heard of you before?"

Xiao Wei said, "We didn't have any plans before, and things were just done haphazardly. This year, we finally put everything together, sorted out all the things we had accumulated over the years, and registered this group company. It was only established a few days ago."

Factory Manager Li asked, "What is your main business? What is your main source of revenue?"

Xiao Wei said, "My restaurants are a bit more expensive; a meal there costs around two or three thousand yuan. There are also food factories and training schools. Lately, my main business has been spending money—buying buildings, selling land, and building new ones."

Factory Manager Li thought for a moment and said, "Xiao Zhang, how about this? We'll change the sales target to 300, no less than 300 cars a year, okay? You have dozens of cities in the three northeastern provinces. As for our original business with the industrial and trade sector, I'll have them pick up the cars from you and pay you for them, but that won't count towards the 300 sales target, okay? You should make some money."

Xiao Wei asked, "What about you guys? Are you still selling them over there? Or have factories come to buy from you? How do you handle that?"

Factory Director Li said, "Xiao Zhang, you may not be familiar with our country's automobile sales policy. After our factories produce cars, they are handed over to the head office of the materials system or the electromechanical system. They then purchase the cars and distribute them layer by layer. The head office gives them to the provincial branches, the branches give them to the city branches in the province, and the branches give them to the dealerships and their subordinate sales companies. We don't even have the power to set market prices; we only have the ex-factory price."

A few years ago, it would have been impossible for someone like you to come looking for a sales position. We have to thank Shanghai Volkswagen for this. The Germans were so independent. They established their own sales network throughout the country. In the beginning, the offices in various places were set up in the branch offices of the two major systems. Isn't that amazing? In addition, we were reforming the sales of everything from grain to materials. That's why you have this opportunity now.

Do you understand what I mean? These two major areas are unavoidable; even if I don't give them the goods, I still have to supply them. The fact that we're daring to give you this agency right now is just an experiment. You sell to Northeast China, but we're still controlled by others in other regions. So forget about true exclusivity; it's impossible. Currently, only Shanghai Volkswagen can achieve this nationwide. Guangzhou Peugeot is also building its own distribution channels, but the results aren't good.

Xiao Wei asked, "Do all cars in China have to go through them for sale? They set the prices?"

Factory Director Li nodded and said, "So that's how it is. You thought that when the Santana first started selling for around 200,000 yuan, it was the manufacturer's problem? It had nothing to do with the manufacturer. Later, the Germans built their own distribution channels, and the price immediately dropped. Look at how much a Santana costs now? A little over 130,000 yuan, that's the manufacturer's price. We're also thinking about building our own distribution channels. Now all the car manufacturers are doing this, only by having it in their own hands can they have the final say. You've caught the first shot."

Xiao Wei said, "This is the first time I've ever heard of this. Fine, the first shot it is, I'll take the blame. If that's the case, the parts and equipment suppliers won't cause me any trouble, will they?"

Factory Director Li said, "No way, what era are we living in? You can do business as long as you get a license and you can make money as long as you don't break the law. Don't even mention selling a legitimate car. There are smuggled cars everywhere now and nobody seems to care."

(End of this chapter)