Extraordinary Genius - Chapter 292 – Current status of China’s Automobile industry
Kirilenko had received a call from Feng Yu. Feng Yu wanted to order a large number of motorcycle and automobile production lines, including the production line for trucks. Kirilenko was surprised.
What was Feng Yu going to do? Does he want to empty the Soviet Union industry? Even though these equipment were not worth much now, but they were not given away free. How many cars can you sell in China annually? Why are you wasting your money to buy so many production lines?
But Feng Yu was using daily necessities to exchange to those production lines. Kirilenko could not reject this offer. Feng Yu had told him to lower the mine productions and resume the normal operations after the Soviet Union had disintegrated. That’s why the Mining Enterprise was not making money now.
If it weren’t for Feng Yu injecting so many funds into the company, Kirilenko would not be able to cope. Kirilenko had invested all his available funds into this company and resulted in a decline of his lifestyle.
Feng Yu’s ordering of production lines was a chance of him making money. How could he miss it?
Kirilenko had found a new goal. He starts to contact those motorcycle and automobile factories. Those facilities that could be dismantled were all dismantled. Kirilenko was more experienced now, and he chose those factories that were outside of Russia.
The Soviet Union’s disintegration was bound to happen. Kirilenko’s father had got the confirmation from Yeltsin, and it was the same as what Feng Yu had predicted. This year, the disintegration will occur.
Feng Yu had told Kirilenko that this would happen between October and December. Although his father did not confirm this, Kirilenko still believed Feng Yu.
Since the Soviet Union will disintegrate, then his father will surely stick to Yeltsin. If he sells Russia’s industrial facilities, it will not be good for his father’s reputation. As such, he chose other allied countries. Even if they charged him higher rates, he also does not mind.
Kirilenko suddenly remembered the time when Feng Yu approached him to get loans and asked him to contact the banks from the allied countries but not from Russia. Russia was Kirilenko’s home. This showed that Feng Yu had kept this in mind.
Since Feng Yu had thought of taking care of him, Kirilenko decided to earn lesser this time and treat it as a form of repayment to Feng Yu.
After ordering the equipment and Kirilenko promised Feng Yu that he would be able to get what he wanted, Feng Yu went to Bing City’s government.
“Mayor Zhang, my plans will influence our country’s future developments and will also let our country to catch up with Japan and the Western countries. This is for the good of our nation. Why you do not agree?”
“You are too ambitious! I do not think that your automobile project will succeed in the first place and now you want to build 5 more automobile factories? Are you crazy?”
“These branch factories do not need the city to invest a single cent. I will make all the investments, negotiations with the local government, equipment, land, construction of the factories and even training of the workers. What are you afraid of?”
“Where did you get so much money?” Zhang Ruiqiang asked.
“I earned it. I can let you investigate every single cent, Do I still need to use illegal ways to earn money?” Feng Yu felt that Zhang Ruiqiang’s question was ridiculous.
“You earn it yourself? Every single cent you earned is from the workers’ hard work. Have you done any market research? This is a big project, and if your products do not sell, it will be a waste! It will be wasting your money and also waste the efforts of every single worker! When this happens, the factory will close down, and there will be chaos!” Zhang Ruiqiang banged his desk and shouted.
Feng Yu looked at Zhang Ruiqiang: “You think that making cars will surely fail and the factories will bankrupt? It will affect the economy and will waste resources?”
“Am I wrong? What is the annual production of automobiles in China now? You know how many cars are there in China now and how many of these cars are privately owned?”
Feng Yu seriously said: “Now, in China, there are about 3.3 million automobiles and it includes 2.1 million trucks. There are about 1.2 million cars. I had done my research.”
Feng Yu did not start these projects blindly. He had done his research, and he even knows more detailed information.
“There are only about 1.2 million cars, and you want to manufacture 200,000 annually? This is being ambitious?” Zhang Ruiqiang got angrier when he heard what Feng Yu had said. You had already done your research and yet you still want to start this project? Are you stupid?
Feng Yu laughed and continued: “What I had just said are those automobiles that are registered. There are more than 10% of this figure which is not registered. For example, out Longjiang province have many Lada that was smuggled in. Also, from 1984 to 1987, our country had imported about 640,000 cars. This shows that the demand for cars is increasing. To be self-sufficient, SAIC Motors, FAW, and Guangzhou Automobile were restructured and allows investors to invest. But the ones who made the most profits are not us. It is the foreign investors that had used their technologies to invest in these companies. Now, I am trying to build our own brand and stop those foreign investors from taking advantage of us!”
Although there were not a lot of automobiles in China now, it was these recent years that the number of automobiles increases. The demand for automobiles will increase further, and in Feng Yu’s past life, it was also during this time when German and Japanese companies entered joint ventures with Chinese automobile manufacturers. Their cars entered the Chinese market in large volumes, and the saddest part was those Chinese companies were using the foreign brands. This resulted in China not having their own brand. This had also let the imported German, and Japanese cars controlled the Chinese automobile market.
“You also know that we had many joint partnership factories. Then you should also know that those factories had strong backings and those factories had government policies to support them. How are you going to compete with them? What makes you so sure that you can survive in this industry and not be eliminated?”
Zhang Ruiqiang was angry with Feng Yu’s stubbornness. If it were someone else, he would not be scolding him. But Feng Yu was someone he thought highly of, and he does not want to see him walk the wrong path.
“Germany and Japan’s industrial technologies are good. But, do not forget that the Soviet Union is also an industrial country. Not only I can get machines at low prices, but I can also hire their engineers to do R&D and develop new technologies. This R&D headquarters will be based in Bing city. Actually, our engineers are good too. But many of them lack the funds to start their own researches. I can provide them with the funds and let them research new technologies. This way, we do not need joint partnerships with foreign MNCs. We will not need to work for them and help them promote their brands. Furthermore, in the 1985’s 5-year plan, the Automobile industry is one of the industries which the country will support. It was even named as one of China’s core industry. Is it really good for China’s core industry to depend on joint partnerships with foreign MNCs?”
“When did you heard that the industries the country supported, will allow private companies to enter it?” Zhang Ruiqiang looked at Feng Yu.
Feng Yu said with an innocent look: “But the Machinery Company is not entirely a privately-owned company. It is a cooperation between private and government. It is also a shareholding enterprise.”
Zhang Ruiqiang stared at Feng Yu. It seems that Feng Yu had found a loophole!