Extraordinary Genius - Chapter 280 – I want to manufacture automobiles
Zhang Ruiqiang looked at Feng Yu in shocked: “You want to manufacture automobiles? Xiao Yu, cars are not as simple as motorcycles.”
“I don’t think it is too complex either. Isn’t it just an engine with 4 wheels?” Feng Yu casually said.
Zhang Ruiqiang shook his head. If it were so simple, there would be cars all over China.
“Xiao Yu, we are just next to Shen Province, and First Automobile Works is just located there. First Automobile Works is China’s biggest automobile manufacturer. You want to build an automobile factory in Bing City. Are you trying to compete with First Automobile Works?” Zhang Ruiqiang reminded Feng Yu. Feng Yu should know about this.
“What’s wrong with competing with them? My technologies are better, the exterior will be more beautiful, the interior will be more comfortable, and my cars will be cheaper. Why can’t I compete with them?” Feng Yu was confident that he would be able to build a national automobile brand which will not be an imitation.
“Your technologies are better? Your cars will be more beautiful and comfortable? Your cars will be cheaper? Where did you get your confidence?” Zhang Ruiqiang was at a loss for words. Talk is cheap. You must be able to manufacture the cars first.
“I had bought Volga’s production lines and technologies. I had also get someone to design the exterior and interior of the cars. I guaranteed that my cars will be top rated. As for the prices, it will be affordable, and the performance will also be good.”
“You really want to manufacture automobiles?”
“Yes. That’s why I need the support of the City Government. Give me a plot of land. I want to build a factory.”
“You must consider carefully. The investment for an automobile factory is a big sum of money.” Zhang Ruiqiang tried to persuade Feng Yu again. There were not many people who could afford cars in China. This was different from motorcycles. The investment was high, and there might not even have 10,000 vehicles sold in a year. There was a high possibility for Feng Yu to make losses.
Of course, Zhang Ruiqiang tried to stop Feng Yu also because this factory will be built under the Machinery Company.
If the City approved, then the City Government got to inject more funds into the Machinery Company to prevent their shares from diluting further. The amount to be injected into the Machinery Company will not be a small amount.
Now the Machinery Company cannot stop Feng Yu. After all, it will be the shareholders that will decide. But the City government can still stop this project by not giving the approval.
“I will discuss with the leaders. But the City might not give you the approval.” Zhang Ruiqiang felt that this might be worth a try, but the other leaders in the city might not want their Machinery Company’s shares to be diluted. If Feng Yu wanted to build an automobile factory on his own, the city would not stop him, and the government will still support him.
Zhang Ruiqiang was also suspecting if Feng Yu really wanted to manufacture automobiles or he just wanted to use this as an excuse to dilute the City’s Machinery Company shares. After all, the Machinery Company was making lots of profits from their agriculture machinery and motorcycles. Last year, there were 140,000 motorcycles sold.
At first, everybody thought that the motorcycle market was small and there were too many competitors. Feng Yu’s motorcycles were expensive also. Even if 100,000 units were sold, it would be considered an achievement. However, 140,000 units were sold, and Songjiang Motorcycle brand was number 3 last year in China. This figure will increase further this year.
It seems that Feng Yu had walked on the right path, but automobiles were different. Wealthy people prefer imported cars as the quality were better. Those that were not so rich would not buy cars. Motorcycles suit them better. Even the second-hand automobile market, imported cars were selling much better than domestic brands.
Bing city’s location was not ideal too. It was just beside china largest automobile manufacturer, First Automobile Works.
“Mayor Zhang, why not you tell the city that I guaranteed that within 3 years, the annual sales will exceed 50,000 units. How much taxes do you think the City will get from me? Furthermore, I heard that the City had planned to invest a lot in education this year, but there was the insufficient budget. I can donate 3 new school buildings.”
Zhang Ruiqiang’s eyes shined. This was good news. A school building will cost at least over 100,000 RMB. If it was a better building, it could cost over 1 million. The City can do more upgrading of the old schools with their existing budget.
“Fine. I will discuss with the leaders. I will give you an answer in 2 days time.”
Two days later, Feng Yu came to Zhang Ruiqiang’s office, but when he saw the smile on Zhang Ruiqiang’s face, he knows that he will be dealing with a cunning fox.
Feng Yu immediately knows that the City had agreed, but they must be thinking of getting more money from him!
Damn. Taking advantage of me? If I am going to other areas to build this factory, the officials there will be treating me like a god!
“Mayor Zhang, from your expression, the City has agreed?”
“Yes. You can consider it that way, but there are some conditions.”
“Sigh…… What are the conditions? I will see if I am able to accept it.” Feng Yu sighed.
“First, you must build 10 school buildings within 3 years for the city, and the school buildings must be like the school buildings built by your father in your districts.”
Damn. 10 buildings? That will cost over 10 million RMB. Feng Yu was able to accept it. He was also using education to boost his reputations.
In the future years, many undergrads felt proud for having attended class in school buildings donated by Sir Shaw. If Sir Shaw set up a company in China, there will be many talents queuing up to join that company, even if the wages were lower than average.
“Including the Universities?”
“Universities? No. Mainly the high schools.” China provides the fundings for their universities, and the City does not need to care about it.
Feng Yu felt regretful. If it were the universities, it would be the best. But high schools are not bad either. But Feng Yu wants to include a condition as well.
“Fine, but the school building must be named by me.”
“you want to name it as Wind and Rain building? It does not sound auspicious.”
Feng Yu was speechless. Your name is not auspicious. Your whole damn family is not auspicious!
“Calling it Tai Hua building should be not a problem?”
Zhang Ruiqiang rolled his eyes. You think I don’t know Tai Hua are from your parents’ names?
“Fine. I can agree with this. So, you agree to the first condition. Let’s talk about the next condition. The Machinery Company cannot move away from Bing City, and no matter how diluted the shares are, the City must get at least 10% of the shares!”
“I can agree to not move the Machinery Company away from bing City. But at least leave 10% share for the City, will depends on whether the City would be able to inject your proportions of funds. If the city is able to inject the funds, the shares will not be diluted.” Stay in Bing City? This was not a problem. Feng Yu could always set up a shareholding company and transfer the Machinery Company’s shares to that company, and he will still be able to manage the Machinery Company from there. The city was only worried about the taxes. He could always pay the taxes from other places.
“Fine. Then I will say the third condition.” Zhang Ruiqiang also knows that Feng Yu would never agree to let the City hold on to 10% shares without them injecting funds into the company.
“Wait, Mayor Zhang, how many conditions do you have? A hundred?” Feng Yu was not happy. There were too many conditions.
Zhang Ruiqiang smiled: “This is the last condition. You must hire Bing City’s residents first for your workers!”
“This is also not a problem. This is the last condition? Then it’s settled then!” Feng Yu quickly stop Zhang Ruiqiang before he keeps adding on more conditions.
“Those were the only conditions set by the City. Here is the City’s map. Pick the location you wanted for your factory, and we can discuss the land usage fees.”
Damn. I knew it was not so simple. The City wants to use the land as a replacement for their proportion of funds!
Feng Yu could agree to all those conditions was because he wanted his automobile project to start as soon as possible.