Extraordinary Genius - Chapter 295 – A National Brand
The next day, during the meeting, Deputy Xu continued to disagree with this proposal. He felt that this was overly ambitious. If Feng Yu wants to invest, he can invest in other industries, or even donate to the city.
The Mayor also changed his stance. He felt that this expansion of the motorcycle project can work, but not for the automobile project. They decided to let Zhang Ruiqiang inform Feng Yu about their decision. The City can sell the automobile project to Feng Yu and let Feng Yu set up a new company for the automobile manufacturing business. There was no need for him to invest in the Machinery Company anymore.
The Mayor’s intention was apparent. He wants Feng Yu to invest and take the credit, but he does not want the City’s shares to be diluted. As for what Deputy Xu said, Zhang Ruiqiang chooses to ignore.
“What? The City allows the Machinery Company to sell me the automobile project? Is it real?”
The public could not get a license to set up an automobile manufacturing company and that why Feng Yu decided to use the Machinery Company for this project. If the City allows the Machinery Company to sell him this project, Feng Yu would seriously consider it.
“It is like this temporary. But we still need to talk about the details. The City agrees to the setting up of the motorcycle branch factories and will support it. But you must promote our Bing City and the Machinery Company headquarters must remain in Bing City.”
Zhang Ruiqiang felt that the Mayor’s decision was sound. By splitting this project into two parts, they could keep the credit and have lower risks. But it was still up to Feng Yu whether if he would accept it. But it seems that Feng Yu was looking forward to this decision.
Zhang Ruiqiang was the one among the City’s leaders that understands Feng Yu the most. He immediately noticed that if without the City Government’s approval, Feng Yu had no way to start the automobile project. If it was not for this reason, Feng Yu might not even want the City Government to be a part of this project.
The City had made use of many of their connections to get the approval for this automobile project, and they even seek the help of the Provincial number 1. Now, it seems that Feng Yu was the one who had gained from all this. The sales of the automobile project will be decided by the shareholders, and the City could not get any benefits from it!
“Mayor Zhang, I agree to the City’s conditions. I will go back now and ask Li Mingde to calculate the cost of this project.” Feng Yu readily accept and was in a rush to leave.
“Wait. Do you really think that this project will do well? The saloon cars market is really that big?” Zhang Ruiqiang held Feng Yu back.
“I can only say that in the future, this market will grow bigger and bigger. But whether this project will succeed, I am also not very confident. But there is one thing I am sure. If I did not start this project, then in the future, China will not have its own automobile brand. I am doing all this for the country.” Feng Yu said with a noble expression.
“Stop bullshitting. Since when you are so noble? Furthermore, the ratio of imported cars in China had decreased by a lot for the past two years and how can it be possible for the Chinese automobile market to be controlled by foreign brands?”
“Mayor Zhang, I will just point out one thing. Why is the ratio of the imported cars in China decreasing? It is because of an increase in our production. But where is this increase coming from? It is the cars from the joint partnership factories. What are the brands of those cars? It is Volkswagen and Toyota vehicles that are selling the best. These are all foreign brands. Just look at the public buses bought by the City. Are they not all foreign brands? Then what about our own Shanghai brand cars?
Zhang Ruiqiang was shocked. That’s right. Shanghai brand was formerly the nation’s pride. Where are they now?
SAIC Motors is now selling Volkswagen cars that were produced from their joint partnership factories. That’s a foreign brand. Although the sales had increased and lower the importation of vehicles into China, the Shanghai brand cars were slowly disappearing from the roads.
It was like this in Feng Yu’s past life. Not only the Shanghai brand, even the Hongqi (Red Flag cars manufactured by FAW) and many other Chinese brands had declined. When China’s own automobile manufacturing industries developed and wanted to build up those Chinese brands again, they found that the foreign brands had captured the market.
“Mayor Zhang, do you know how important a brand is? I shall put it this way. If an overseas company wants to buy my Wind and Rain brand now, how much do you think they will offer?”
This was not Feng Yu bragging. There were companies from Europe and the US that wanted to buy the Wind and Rain brand. Those companies felt that this Wind and Rain brand represents high tech products and if they use it on their own products, they could save on their advertising cost and still achieve better results. This was because the consumers already linked Wind and Rain brand with the words innovations and high tech.
“100 million. USD!”
This 100 million USD was not only for Wind and Rain brand. It includes the patents for the humidifiers and bladeless fans and also the factory in Dongguan. Although the brand was expensive, it was not as expensive as what Feng Yu claims.
Zhang Ruiqiang looked at Feng Yu in shocked: “100 million USD? A brand is really so important?”
Feng Yu nodded: “Look at our beer factory. Bing City Beer. The people in Bing City and the surrounding areas all drink this beer. The Lin Province do not have any beer? Even if Lin Province sells their beer at lower wholesale prices, those small stalls will also not order from them. Our Bing City people only drink Bing City Beer! This is brand awareness and the value of branding!”
“Fine. I will not say any more. Since I am starting my own automobile brand, then I will not use Songjiang Motors anymore. Why not you talk to the city and ask if the City can sell Songjiang brand and the Motorcycle project to me?”
Zhang Ruiqiang stared at Feng Yu: “Don’t even think about it!”
The City does not think that the automobile project will do well, but they think highly of the motorcycle project. In Bing City, you can still see many people riding motorcycles during the winter. The sales of Songjiang Motorcycles for this year’s first quarter was still increasing. The city estimate that this year’s sales will be more than 200,000 units.
Soon, the branch factory in Jinling will start operations, and it will be in time to meet the increasing demand for motorcycles. The motorcycle project will also be introducing the 100cc bikes. The prices will be lowered, and the sales volume will undoubtedly increase. With more models on sales, they can foresee the motorcycles bringing in more profits.
Although they will be building many factories at once, the will not be high. It will be only about 50,000 units. At the start, the workers needed training, and their production will not be high. But 2 to 3 years later, the number of motorcycles produce will increase. It will be a golden egg laying goose.
This Songjiang Motorcycle brand will become valuable in 2 to 3 years. Sell this brand to Feng Yu now? Impossible!
Feng Yu suddenly regretted telling Zhang Ruiqiang so much about branding. He should not have bragged about the value of Wind and Rain brand.
Now he got to build a new automobile brand and got to start from scratch. It would be harder.
But even if it was hard, Feng Yu will still do it. During 1991 to 1995, China’s economic growth was at an astonishing speed. The buying power of the people increased, and lots of future tycoons started they businesses during this period. Also, the government regulations during this period were the most relaxing, and if Feng Yu were to begin his development a few years later, he would be the same as those workers from the future years. How can Feng Yu be satisfied with this?
Even if the City had come out with harsher conditions, Feng Yu would also accept it!