The Industrial Giant Reborn

Director Wang knows the price level of domestic cars best. He works under the First Machinery Department, mainly managing domestic car companies, including cars, trucks and foreign joint ventures like Jeep.

At present, among the more famous cars in China, before Yanjing Jeep invested, the Jeep 212 built by Yanjing Automobile Factory was priced at more than 20,000 yuan. The price of Yanjing Jeep was around 70,000 yuan. Currently, the SAIC Volkswagen Santana The price is RMB 50,000, and a Jiefang brand truck is priced at around RMB 60,000.

Of course, these are the official selling prices. In fact, the transaction prices at the terminal are much higher, because cars are still luxury goods in this era, the demand is large, and the production capacity is seriously insufficient. The number of imported cars is very small due to foreign exchange reasons. Even if there are, It’s not the turn of ordinary people. Those who can build cars in China are the most popular ones, and many people are rushing to get them at high prices.

The Wuling brand car I just rode has a strange appearance, like a minibus. Although Director Qian seems to say it is not very good, Director Wang knows very well that it is much better than the previous Jeep 212. If it is sold The price is more than 30,000, which is okay, but if it drops further, not only Jeep 212, but also many other car-making companies will be affected, especially since Director Wang just learned that this Wuling is not only the third foreign brand One model is developed in China at a time, but in the previous development, parts were basically made according to domestic conditions. Except for a few, all other parts were domestically produced.

This is much better than Yanjing Jeep, not to mention SAIC Volkswagen. Many things cannot be changed when introducing foreign brands of cars, including standards, because no one knows what will happen once they are changed? All must be retested, which is impossible, because it would be better to redesign a new car than to do so.

Therefore, Jeep or Santana have very high requirements for parts and components. Many of them cannot be manufactured domestically and have to be imported. In the case of the Jeep company in Yanjing, the boss behind it is very rich and has spent a lot of energy on localization. But compared to the parts needed for the entire car, it is still far from enough. And because of the shortage of foreign exchange and controls plus high import tax rates, the prices of the cars of these two companies are higher, which also gives other domestically produced cars a higher price. Space for brands to survive.

But Wuling is a new design. If most of them are self-produced, then if there is little impact on foreign exchange, its selling price can be reduced to very low, and the government will not be able to adjust the import tax rate. , in this way, this relatively higher-tech car will inevitably squeeze out domestic brands.

After thinking for a moment, Director Wang asked: "Director Qian, Mr. Chen, can the cost of this car be reduced to such a low level?"

"Of course, as long as the output is large enough, the price can be reduced. I have built a terminal channel for selling cars in Southeast Asia. As long as the overseas sales are sufficient, a lot of costs can be shared equally, so that domestic prices can also be reduced. , achieve higher sales, and in a virtuous cycle, both the cost of the car factory and the costs of all suppliers can be significantly reduced, and ultimately everyone can buy very cheap cars." Chen Zhiwen said with a smile.

Domestic cars are very expensive. To what extent are they expensive? The price of Santana is 50,000 yuan, while overseas, for example, the price of cars of the same level in Japan next door when exported to Hong Kong is almost 3,000- It is about 4,000 US dollars. If calculated according to the official exchange rate of RMB, it is less than 10,000 RMB.

There are two important reasons why the price difference is so big. First, it is the exchange rate difference. The official exchange rate of USD to RMB is about 1:2.5, but in fact, it is much more than that. Therefore, foreign countries are purely defined by the official selling price. The price of the car is inappropriate. If it were based on the black market exchange rate, it would be about the same.

Second, the prices of goods are different around the world. For example, oil is relatively expensive in importing countries, but in oil-rich countries like the Middle East, it is even cheaper than mineral water. The same is true for industrial products. When a country has a strong supporting industrial chain and industrial production capacity, the price of industrial products will be very low. For example, a bunch of small things for a few yuan on Taobao in later generations can reduce the cost to this price. In fact, It is the epitome of strong industrial capabilities, and the price of the same thing in Africa, South America, Southeast Asia and other places in the 21st century will be much higher.

Except for some products that are very popular around the world, such as mobile phones, computers, etc. Although these are also very expensive in places with underdeveloped industries, they are not outrageous compared to other countries. This is also because of the huge number of products in the world. Capacity, uniformly reduced production costs.

But cars are different. Although the global demand for cars is high, there are too many categories of cars, and the transportation cost of cars is very high. They are high-value commodities and consume precious oil. Therefore, many countries will also implement price controls.

The current domestic industrial capacity is seriously insufficient. Even if Western car brands are introduced to invest in production, most parts still need to be imported. Even during the assembly process, due to various reasons, frequent rework or problems occur. Quality problems, or quality problems arise during the process of trying to localize products, and these will eventually be spread to the car.

Third, the sales volume of domestic cars was too low in the 1980s. SAIC-Volkswagen’s production capacity was only a few thousand units a year. Although it was an old model with no R\u0026D costs, foreigners still had to charge patent fees and invest at the same time. The cost must also be shared equally.

As for the later rumors on the Internet that the German price is 80,000 and the domestic price is 180,000, that is a pure rumor. Many people believe it after more rumors. The pricing logic here makes some sense. The country definitely does not want foreign investment. Brands are dumping at low prices, because then the domestic automobile industry will never have a chance, but it will not be priced at 180,000.

You know, the customers of the first-generation Santana were not the general public, but local government departments or state-owned enterprises. By setting such a high price, wasn't it a clear gift to Germany? You know, although the cooperation ratio of SAIC-Volkswagen is 51:49, in terms of profit distribution, Volkswagen can get about 70%.

In fact, the price of Santana was about 50,000 to 60,000 yuan in the early days. Later, the price gradually increased according to demand, and it was not until the 1990s that it rose to 180,000 yuan. Another reason for this was that the prices were breaking through. At that time, all the pots and pans were sold out, let alone cars.

Of course, the specific price of Wuling still needs to be determined by market feedback at different times. There is no reason not to make more money. After all, this is not a necessity of life. There is no logic that a price increase will affect the basic life of ordinary people.

"Can this Wuling brand be exported on a large scale?" Director Wang was surprised again. Not only did he want to introduce a sedan brand, but he also developed a car himself and exported it at the same time. Adding up all these, he also knew that Chen Zhiwen was Ready to invest heavily in Yanjing again.

He has car sales channels in Southeast Asia, and he also knows something about this. A small number of Yanjing Jeep models have obtained export certificates through their department and sent them to several countries in Southeast Asia for testing. From this point of view, Chen Zhiwen has been planning things like today since before Yanjing Jeep was established a few years ago, developing new models internally and building sales channels externally.

"Yes, including Yanjing Jeep, if it can be popular in Southeast Asia, it will be the same." Chen Zhiwen nodded and said: "Detroit is on the east coast of the United States, and the cost of transporting cars there to Asia is too high. As long as costs can be reduced, orders from the Southeast Asian market will naturally come to China."

The layout of automobile terminal sales channels in Southeast Asia is itself a high-profit market. There is no automobile industry in these places. However, with the development of the economy, there are many wealthy people, and cars have become a necessity. At the same time, they can also take care of selling their own brand cars.

For the country, it is good to be able to export, even socks, as long as it can earn foreign exchange, let alone cars. Unfortunately, before 2020, domestic car exports were very average and have been rising slowly until 21 years later. It just takes off in a straight line, but now in China, there is no export capability, and the cars built by oneself are not willing to be used internally.

As for joint venture brands, it is even more impossible to build factories in the mainland and then export them abroad. If normal Japanese and German cars can be exported, they will definitely be exported from their own countries. Only AMC is special. It is impossible for Chen Zhiwen to place overseas orders in the United States. , because if your own channels are good, orders will skyrocket, and factories in the United States will have to recruit people, and they may be targeted by the UAW, which will not be worth the loss.

Of course, Jeep models are unlikely to have any success in Southeast Asia. Chen Zhiwen is optimistic about this Wuling magic car. It has no comfort, but is highly practical and low-priced. It is definitely suitable for a large number of areas where the economy is just developing. As used by small business owners, including the mainland and Southeast Asia, in the original future history, around 2015, Wuling's largest sales were actually in the domestic fourth- and fifth-tier cities and rural markets. At the same time, exports were very good, and it also provided some economic benefits. Not a good country.

If future generations had not encountered the rise of electric vehicles, then Wuling's type of vehicles might have gone very far in the field of fuel vehicles.

"Mr. Chen gave us too many surprises today." Director Wang said with a smile. Originally, Midea's Gigafactory had already attracted the attention of domestic high-level officials, and before that, a large-scale food factory was planned to be built in Shanghai. Yanjing actually wanted to win over these two major projects. But this has nothing to do with him, because he is responsible for cars. Unexpectedly, Chen Zhiwen came to Yanjing Jeep this time. He originally thought he was just visiting, but he did not expect that the main purpose was to propose two new plans to the central government through himself. One is the introduction of new cars, and the other is the export of Wuling.

The Wuling project was actually decided three years ago, and qualifications were given at that time, but no one could have imagined that it would be developed so quickly and be so successful. It was ready to enter the testing and production preparation stages within three years. Even Chen Zhiwen also The Southeast Asian market was specially created for this car.

Being able to export cars, even low-end ones, is an unexpected surprise for the current mainland. Not only can it earn foreign exchange, but it can also prove to the outside world that it also has an automobile industry. Although it is also a joint venture car development, it can This is also the first foreign-branded car developed in the mainland. Once successful, it can be exported on a large scale, which is a big encouragement to the domestic automobile industry, although this car is relatively low-end.

At the same time, we can also use foreign markets to improve our domestic industrial chain. This is one of the things that Dada leaders are most concerned about. Back then, in Japan, domestically produced cars could not catch up with others, and they had to wait in front. It's very embarrassing.

"It's nothing. As a Chinese, I naturally hope that the domestic automobile industry will be stronger and exported to all parts of the world." Chen Zhiwen smiled and said, "I would like to ask Director Wang to be more careful about this matter."

PS: Regarding car prices in the 1980s, I checked a lot of information before confirming it. It should be correct.