Extraordinary Genius - Chapter 607
Chapter 607 – The frustrated Li Dafu
Feng Yu had wanted to recruit Li Dafu to manage Bing City’sMachinery Company automobile manufacturing division. But at that time, LiDafu’s sheet metal and other businesses were doing well. He was not willing togive it up and work for Feng Yu.
But when Li Dafu saw the rise of Songjiang Motors, he wasshocked. He did not expect Songjiang Motors to be so popular in China and waseven exported to Eastern Europe!
Li Dafu also likes cars. He had dreamt of owning his ownautomobile empire. But currently, China already had several automobilemanufacturers like FAW, SAIC, BAIC, GAC, Bing City Machinery Company and someothers. Although the scale of these companies still could not be compared tooverseas Automobile Companies, it was enough to meet China’s demand. He felthis chances of setting up an automobile company was slim.
Li Dafu had joined the Zhejiang trade union and had plans togather a group of people there to set up a private automobile company. But thebusinessmen there do not think highly of his proposal. They felt it wasimpossible to succeed.
What a joke! You want to start off with manufacturingmotorcycles, and when you are familiar with the manufacturing, you will ventureinto cars?
If this was 2 years early, motorcycles might be a profitablebusiness. But in China now, 5 out of 10 people who want to buy bikes will chooseSongjiang motorcycles.
Not only Songjiang motorcycles were beautifully designed,but the performance was also outstanding. The bike was also endorsed by topcelebrities, and it was from a reputable brand. How can your company grow ifyou manufacture bikes? You want to follow those small factories and sell your bikescheaply?
Even if you could make profits by doing this, how much canyou earn? Also, a motorcycle factory might not be big, but it must still be ona particular scale. How many years will it takes for us to recover ourinvestments? When will we see the profits?
Even if it was a success and profitable, will the profits beenough to set up an automobile company? None of us were familiar with thistrade. You don’t tell me that a car is just 4 wheels with an engine fitted onit. Many automobile companies also had the same mindset. But the consumers werenot buying the cars they manufactured.
In China, there were not only big automobile brands. Somesmall factories had tried to manufacture their own cars. If the localgovernment did not protect them, they would not even be allowed to sell their vehicles.
These factories’ annual production was only a few hundred toone thousand. But the cars they manufactured were not safe, and the performancesucks!
Other than the locals, who else would buy their cars?
You say they can have better exterior designs? Do they havedesigners? Songjiang Motors was working with Shanghai most prominent designingfirm. Those designers were all elites who had overseas experience. Which otherautomobile manufacturers in China can achieve that?
If you want to go by a low-cost strategy? Can you be cheaperthan Jeep? Jeep and Xiali automobiles were cheap. But were they popular? If themilitary had not supported Jeep and the government did not purchase Xiali astaxis, do you think these two factories can survive until now?
Li Dafu’s dream of an automobile empire was shattered. Noneof his friends supported him. He tried getting a loan from banks, but no bankswere willing to lend him sufficient funds.
Loans? Banks will also need to see his ability to repay theloans. The banks felt Li Dafu’s proposal was a joke. Why would the bank lendhim so much money?
But Li Dafu did not want to give up. He does not lack money.His factory had more than 10 million in profits annually. The money he hadcould last him his whole life.
But when a man does not lack money, he will start to chaseafter his dreams. Li Dafu really wanted to drive a car he manufactured himself,and he remembered that Feng Yu had told him to call him if he changed his mind.
So, Li Dafu went to Zhong Qingxian and got Feng Yu’scontacts. He immediately calls Feng Yu.
“Manager Li, are you calling me to tell me that you had madeup your mind to join Bing City Machinery Company?” Feng Yu joked.
“To be precise, I only want to join Bing City MachineryCompany automobile division. I am not interested in agriculture machinery.” LiDafu explained.
Feng Yu thought in his heart. We still have not recoveredour capital for our automobile venture. The agriculture machinery which youlook down upon was still bringing in high profits. The profits were even higherthan motorcycles.
“Manager Li, I will be going over to Hangzhou to meet upwith Zhong Qingxian soon. How about we have a face to face discussion when I amthere?”
Li Mingde was getting older, and Bing City Machinery Companyhad grown a lot. He was no longer able to keep up with the operations. AlthoughFeng Yu had asked him to groom a group of young executives, it will take atleast 5 years for them to be able to assist him. Feng Yu does not dare to letthese young graduates take on the role of managers so soon.
No matter how good the grades of these graduates were, theywere still inexperienced in managing such a big company. Management was notsomething that could be learned in schools. It requires experiences.
In Feng Yu’s previous life, Li Dafu had made implementedlots of good strategies and achieved excellent results. Feng Yu was veryimpressed with him. But he wondered if Li Dafu was still as impressive in thislife. This was why Feng Yu wanted to meet with him and hear his views onSongjiang Motors’ future and operations.
Zhong Qingxian had planned to inspect his new factories inother provinces, but because Feng Yu was going to Hangzhou, he changed hisplans. Lehaha was growing rapidly. The yogurt drinks, tea beverages wereselling well, but Lehaha Children’s health supplement had reached a bottleneck.The sales had reached a point where it could not increase further.
After studying the market, Zhong Qingxian felt it wasbecause the market was saturated and Bing City Pharmaceutical Enterprise hadaffected the sales. Many parents chose to buy Calcium gluconate for theirchildren.
Lehaha Children’s health supplement sales had not increased,but Lehaha revenue was still growing. Their AD calcium milk might be overtakingLebashi this year. In the tea beverages market, a new competitor appeared. Thenew competitor was Rising Sun Group.
But Zhong Qingxian did not think of Rising Sun Group as athreat to him. They were just imitators. How could they be stronger thanLehaha? If Rising Sun Group used plastic containers like Lehaha, they would bebankrupt any time.
Even when Rising Sun Group used cans for their drinks, theirsales could not affect Lehaha at all. In fact, they were assisting Lehaha topromote tea beverages. This was also one of the reasons why Lehaha did notengage them in a price war to bankrupt them.
This was only a small factory with an investment of onlytens of millions. How could they snatch the market share from Lehaha? RisingSun Group only had a few millions RMB of liquid cash. Lehaha’s investments inthis year’s new factory alone were much more than them.
Zhong Qingxian told Feng Yu about his plans for the company,but Feng Yu does not seem interested. It was not because Feng Yu was notinterested. He was worried that if Rising Sun Group did not grow like hisprevious life, will the future be changed?
BeijingJeep Corporation (BJC) was the first Sino-foreign automobile joint venture inChina. Later renamed as Beijing Benz
TianjinFAW, manufacturer of Xiali
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