Extraordinary Genius - Chapter 443 – Recover the capital firs
Feng Yu was not pleased when he left CCTV. This CCTV had just ordered only 30 vehicles! The total deal was not even worth 4 million RMB! Feng Yu had heard that this was still CCTV ordering more than what they wanted. They had only wanted a batch of 20 vehicles.
In his previous life, even a county will order more cars than this. During that time, when a leader was holding to more than one position, he would be assigned to more than one car. The government now was too poor!
The Station Chief will be assigned with a Songjiang Olympic Luxury edition, and his men will be assigned with the economy edition which was worth only 100,000 RMB each. If it weren’t for CCTV wanting a dew more Songjiang Off-Road SUV and Songjiang Red Star vehicles, Feng Yu would not even want to sell them. There were not many profits from this deal. The profit was lower than his motorcycles sales. If this deal were 4 million RMB of motorcycles, the Machinery Company would make at least 1 million RMB of profits. The profits for these vehicles only amounted to a few hundred thousand.
Feng Yu kept telling himself that things would be better in a few years.
Li Mingde and the rest of the Machinery Company’s staffs were excited when they knew that CCTV had ordered their cars. All of them had thought that this Motor Cars branch factory will be making a loss. Feng Yu had told them that the targeted customers for their vehicles were the government agencies.
But all of them felt that not a single vehicle will be sold before the New Year. When the first order came in, it was not one or two vehicles. It was an order of 30 cars.
Of course, these 30 vehicles compared to their monthly production was nothing. But at least it was a good start.
Wu Zhigang had contacted those distributors, but all of them were not willing to place the 1 million RMB deposit. All of those distributors said that the deposit and the setup of the car’s showroom was a strain on their finances.
Although these distributors had made quite a lot from Songjiang Motorcycles the past year, they had also spent a lot. They do not have so much money for the deposit and showrooms.
It was worth to mention that Songjiang Motorcycles was ranked number 2 in China. More than 250,000 units were sold. With the completion of the new factories next year, their production will increase further, and it was only a matter of time for them to be the leader of the motorcycle industry!
All the new motorcycles that were produced by other brands were copying the designs of Songjiang Motorcycles. Currently, Songjiang Motorcycles’ exterior designs were the fad in China.
But there was also bad news. Some motorcycle factories discovered the benefits of getting celebrities to endorse their products and advertising on CCTV. It seems that a few bosses of motorcycle factories will be attending CCTV’s advertising slots auctions.
Feng Yu was furious with those distributors for refusing to be the distributor for his vehicles. He asked Wu Zhigang to be more aggressive against them. Did these distributors think that Tai Hua Trading cannot do without them, or it’s been a while since he had taught them a lesson?
Wu Zhigang used a more aggressive approach, but it was still useless. These distributors really do not have enough money! But all of them expressed that they will buy a Songjiang Motors vehicle each to show their support.
Damn, there were only slightly more than 20 distributors, and even if they buy the most expensive model each, there will still be not many profits.
At this time, Wu Zhigang suggested using the same method as the motorcycles. The top distributor will be rewarded with a small car!
With such a big reward, these distributors will do their best.
Feng Yu thought for a while and felt that this might work. But he must set a minimum target. It can’t be that only one distributor only sells one car while the rest did not sell, and that distributor got the reward.
Feng Yu decided to set a minimum target of 500 vehicles for the distributors. Those that sold more than 500 units will be eligible to compete for the reward. If anyone of their sales were more than 1,000 units, they would be rewarded with one car, and the top sales will get a cash reward of 300,000 RMB.
Maybe only the distributor for Beijing and those coastal provinces could achieve these conditions. The rest of the distributors should average around 300 units in a year.
Feng Yu also gritted his teeth and agree to supply the distributors with the showroom cars for all 6 models with only 500,000 RMB deposit. However, those distributors must have a showroom to display these cars. They can also place these cars in their motorcycle showrooms.
All of Songjiang Motors vehicles only have one color. Glossy black. Actually, this color was the color that will get dirty the most. Even the economy version has the same paintwork. What happens if the paint of the car was damaged?
Those cars that were sold can bring their cars back for aftersales services. But if the vehicles were unsold and the paint was damaged, who would want to buy their cars?
500,000 RMB deposit for 6 showroom cars was a good deal for those distributors. All of them agreed. There were even some distributors asking if they take on more than one province, will the deposit still be 500,000 RMB and they could get 12 showroom cars.
When Feng Yu heard this question, he almost vomits blood. These group of people was more shameless than Wen Dongjun! 500,000 RMB deposit is for one province!
“We will set the retail price, and you will get 5% commission. All your sales proceeds must be deposited into Tai Hua Trading’s account, and we will transfer your commissions to your account at the end of every month. All of you can see that it only takes me one day to sell 30 vehicles to CCTV. So, I don’t need to tell all of you what customers to target.”
All these distributors have some connections with their local government. They had sold quite a number of motorcycles to their local government. To them, it was only a different product, and all of them knew which government agencies have the budget and which does not.
Using the cheapest model’s retail price, 120,000 RMB for calculations, if they were able to sell 10 vehicles, their commission would be 60,000 RMB. Even if they were to sell only 20 to 30 cars a month, their commissions for that year would be about 1 to 2 million RMB, and their investment was only 500,000 RMB deposit and the showroom rental.
How could all these distributors miss this opportunity? If it wasn’t for the increase of the motorcycle’s deposits, they could also afford the 1 million RMB deposits.
Of course, Feng Yu dares to offer such lucrative rewards, he must set harsher conditions. He had made some market research and knew the production of Santana for this year was more than 80,000 units, and all of these were sold. Audi 100 production was over 20,000 units, and they were sold out too. Most of these vehicles were bought by the government agencies or government-related agencies.
Next year, these production figures will still increase by 30%, and the market still has room to improve. There should not be a problem for Songjiang Motors vehicles to enter the market. But first of all, the distributors must get the order from their local government.
Luckily Feng Yu had sold a batch of vehicles to CCTV, and this was considered setting an example for the distributors. CCTV was the government’s mouthpiece, and they had purchased Songjiang Motors vehicles. The other units will start to copy them.
If these distributors were able to sell 10,000 vehicles this coming year, then Songjiang Motors will not make any losses!