Chapter 216: Domestic BMW
In 2000, the Forbes Chinese mainland rich list was released to the public in great anticipation, and the list was first published abroad by Forbes magazine, and was soon reprinted and published by domestic media. Pen & Fun & Pavilion www.biquge.info
"Who is the richest person in Chinese mainland today?"
"Rong family!"
In the face of such a question, the Rong family is a combination of government and business, and the vast majority of respondents answer so.
But the real answer was to most people's surprise, the Rong family, the representative of the red-top businessman, no longer won the crown and was replaced by Han Hao, the second eldest last year.
Although Han Hao's assets have been quite conservatively estimated, 16.5 billion is still unavoidable, which is nearly 1 billion higher than the Rong family, and deserves to become the new richest man in Chinese mainland.
A young man over 25 years old, who started from scratch and made an earth-shattering career, Han Hao became the idol of young people all over China.
"Han Haoneng, why can't I succeed?"
In traditional Chinese culture, the prince and general Xiangning have a kind of gene, which seems to have been passed down very well.
Since Han Hao emerged in China with Huaxia motorcycles, Volkswagen has almost witnessed him step by step to the top of the world with car manufacturing in the past three years.
There are no unsavory private transactions, all the processes can be discussed in detail under the sun, and Han Hao has become the best representative of the sunshine rich.
Ascending to the top of the list of the richest people, Han Hao instantly became a celebrity who knows everything on the streets of China, "Han Hao = rich", this concept began to expand, driving the "Mr. Han", a title created by the people to refer to the rich.
Driven by his successful case, a wave of entrepreneurship has been set off in China, and many people are looking forward to becoming the next "President Han".
In addition, Han Hao's fame is all over the world, and he has also advertised for the Zhonghua Group to a certain extent, and people who know Han Hao basically know the Zhonghua Group that makes cars, "Huaxia" and "Zhonghua" are the two famous brands founded by the richest man. In this way, a large amount of advertising costs have been saved, and Han Hao's rich list has reached the top of the list, which is no less than 100 million advertising costs.
The Rong family took a back seat, but it made the retired old man of the Rong family breathe a sigh of relief, the sharp-edged red-capped businessman was not the scene he wanted to see. Knowing how to advance and retreat and keeping ambitions is the way for red capitalists to build an everlasting business.
The third place on the list also surprised and alienated many, with Kim Yangyong, a name that was very unfamiliar to the public, directly entering the top three on the list at a rocket-like pace.
9 billion!
Another jaw-dropping figure, Hurun made such an inference about Jin Yangyong's net worth, pushing him to the forefront all of a sudden.
Compared with last year's list, the wealth of China's wealthy has grown far faster than the country's GDP growth in less than a year, not to mention the comparison of the salary income of ordinary people.
It turned out to be the CEO of Brilliance Group, and the Jinbei van was produced by their family, and now it sells well all over the country. Through the introduction, the domestic public really knew this super-rich man who has been low-key and invisible, and Jin Yangyong began to move from behind the scenes to the foreground.
"Automobile, financial industry", Hurun labeled Jin Yangyong as such, especially the financial industry is the basis for Jin Yangyong's sudden increase in wealth. According to the complex operation, Jin Yangyong directly and indirectly controls five listed companies at home and abroad, which is his biggest hole card.
Once he became famous, Kim Yangyong finally felt the power of the rich list, if he was only famous in the automobile and financial circles before, now he is finally famous all over the country.
Being in the third place in the rankings, Jin Yangyong can only be slightly satisfied, and he expects that he can take Han Hao's place and reach the top.
After the official success of the MBO and the financial operation of the cross-sea bridge, Jin Yangyong is very sure that he will be able to surpass Han Hao's net worth and become the first person in China's business community.
The reason why he is in a hurry to move from behind the scenes to the front desk is because Kim Yangyong wants to increase his bargaining chips with the government and bless his strength with public opinion.
Compared with Han Hao's low profile, Jin Yangyong began to accept interviews with national media after being on the list.
"Brilliance is a mixed-ownership company, and I play a leading role in it, and as a manager, I will do my best to develop our country's independent automobile industry on the premise of ensuring the appreciation of state-owned assets and safeguarding the interests of shareholders.
MBO is a useful experiment of China's business community, and reform and opening up have created the fruits of China's current economic development. Now is the opportune time to continue to try to reform and clarify the ropes that have been wrapped around the heads of many enterprises with complex backgrounds, and complete the transformation of demutualization and modernization of companies.
We are willing to act as a pilot of national reform, and explore a new path of restructuring for the country under the condition of ensuring the preservation and appreciation of state-owned assets, so as to truly form a market-oriented enterprise with clear property rights and scientific management.
……”
With the help of the power of media and public opinion, Kim Yangyong shouted for himself and for many entrepreneurs with unclear property rights, and strived to clear his own historical sin.
When the rich list was hyped by the domestic media, the domestic BMW was finally going to be listed.
In West Lake, Jiangzhou, BMW China held a launch conference to bring this fan-favorite luxury sedan to China.
As soon as the rich list came out, Han Hao refused to be interviewed by all media reporters, so reporters could only see him through the scene of the BMW press conference.
A large number of uninvited reporters poured into the scene that day, and the attraction of Han Hao, the richest man in the mainland, almost overshadowed the light of the BMW sedan.
In this regard, BMW is mixed, happy that BMW's listing has attracted a lot of attention, and worrying that it has been robbed of the limelight.
In joint ventures, in addition to parts procurement, there is a bigger point of disagreement, which is the issue of listing pricing.
The pricing of Zhonghua BMW has also been fiercely disputed between China and Germany.
"According to the research we commissioned from a third-party company, Chinese consumers generally feel that the price of a domestically produced BMW is acceptable at 400,000 yuan. At present, the starting price of nearly 680,000 yuan for the imported BMW 325 is too far from that of ordinary consumers, and if we price according to the mainstream acceptance of the market, we should be able to cut into the relatively empty luxury car market in China for the time being. ”
As the president of the joint venture, Han Hao said at the meeting.
"In addition to sales, BMW also has to consider its own brand image. Globally, our BMW prices are half a fraction higher than Audi's, so in China we want to keep this price system in Germany. Especially considering our import costs, we recommend a retail price of 450,000 yuan. ”
The head of the German side, Paisen, conveyed the will from the German headquarters.
"450,000 yuan is too expensive, and Chinese consumers will not pay for such a high price. In particular, you must know that the price of the Audi A6 1.8T starts at 358,000, and the BMW 3 Series, as a model with a lower platform, is as high as 450,000, which is not in line with the reasonable pricing of the product. I have always stressed that it is very important for BMW to make its debut in China if it wants to become the preferred luxury sedan for Chinese consumers.
Therefore, I decided to follow Audi closely behind the starting price of the BMW 325, and it is advisable to start at 388,000 yuan, so that it can not only go down, but also maintain upward pressure. The BMW 530 will be priced at 558,000 yuan, starting at 558,000 yuan, compared with the 499,000 yuan price of the 2.4L Audi A6 model. In the future, the company plans to introduce a 2.5-liter engine to reduce the entry price of the 5 Series. ”
In terms of price, Han Hao hopes that BMW can enter the market at a low price and rapidly expand its market share, so as to set a new standard for luxury cars.
You must know that Honda Accord, GM Buick and Volkswagen Passat are now priced above 300,000 yuan in the market. If the BMW 325 is launched at a super cost-effective price of 388,000 yuan, it will steal some of their market share.
"We have to think about the cost, and now the import cost of CKD parts is very high, and we are facing high tariffs. If you set your price, we will most likely not make much money! Especially since the BMW 530 is very expensive, and we want the pre-sale price to be above 680,000. ”
Paisen must protect BMW's interests, the joint venture in China is to make money, if you can't make money, why do you want to localize.
"That's why I'm asking for a localization target of 40 percent in one year, and through the Chinese government's certification line, we can reduce the cost of tariffs by 10-15 percent. In this way, we only need to sell 8,000 domestic BMWs to be able to break even. Exceeding this number can usher in profitability. According to the sales scale of 20,000 units in three years, we have entered a period of rapid profitability. If we set our prices, we might be able to reach that number next year!"
At present, the annual sales of BMW entering Chinese mainland through various channels are about 6,000 units, and according to the low price of domestic BMWs, it is not a problem to reach 10,000 units per year. In addition, after his early pressure, many BMW suppliers agreed to enter China or produce parts for BMW in Chinese enterprises, and the localization target of 40% is estimated to be achieved.
"The Chinese market is very magical, even Honda, GM, Audi can be put into production and profitable in the same year, why can't our noble BMW do this? You can know from the successful case of Guangben Accord that entering the market at a low price to set a benchmark for mid-level cars can reap huge returns.
I have a report from Goldman Sachs analysts who predict that we will lose 200 million in the first year, 100 million in the second year, and then break even in the third year. Because they estimate that the luxury car market in China is not yet mature, and the market capacity is limited. In any case, Zhonghua BMW could not quickly form a production capacity effect, and could only hover in low sales for a few years.
But I very much disagree with such a report, because Goldman Sachs analysts don't understand what China's auto market is like, they don't understand what the needs of China's wealthy people are, and they don't understand how much market potential it contains!
As long as we set the price benchmark for luxury cars, then the latecomers will have to eat cold rice after us! Whether it is Audi or Mercedes-Benz, they will have to face an extremely high market threshold in the future. ”
If BMW lowers the price, Mercedes-Benz will face a higher market risk when it enters China in the future, and will face huge losses once the sales volume is poor. BMW, which entered China in the early stage, was able to form a large-scale advantage early by virtue of its localization advantage.
Pricing power is very important, and as the president of the joint venture, Han Hao hopes to seize the hands of the Chinese side, because the Chinese have lived in China for so long and understand the Chinese market better than the Germans.
"I can send your suggestion back to Munich, but in the end it depends on the response from there. ”
Encountering the strong Han Hao, Paison couldn't resist too much, he could only see how the German headquarters would deal with it.
"Paisen, the reason why your German hometown Volkswagen has been successful in China is because they have implemented a very localized business strategy! I have always emphasized that the interests of the joint venture company are the first, that is, they cannot become puppets, and the German headquarters does not understand the first-line market situation, and most of the suggestions they give are wrong and not feasible.
In order to prevent such a situation from happening again in the future, I would like to discuss with Mr. Punk and Mr. Millberg that the Chinese side will take the lead in all the preliminary work and preliminarily set a period of two or three years. If we mess up, you Germans will take over from now on!"
It is not possible to turn the joint venture into a microphone and marionette for the German headquarters, because the competition in the Chinese market is changing rapidly, and the front-line commander must have the authority to make decisions on the spot. During the War of Liberation, the Kuomintang played a good card and was driven to the island of Taiwan, which fully illustrates how great the evil consequences of remote command will be.
In the end, the German BMW headquarters led by Punk agreed to Han Hao's proposal, referring to the Volkswagen model, the joint venture will be led by the Chinese side for a period of three years. If the model is deemed viable after 3 years, then continue.
Compared with Han Hao's capital investment in the joint venture, BMW seems to be at a disadvantage, which is related to their slightly conservative strategy. Even if it lost money, BMW was able to recoup its costs by selling CKD parts, and the losses suffered by the Chinese joint venture were very small, but the Chinese side took most of the risk of losses. Therefore, under Han Hao's initiative, BMW retreated again and agreed to test the water by the Chinese side.
"Dude, how much do you expect the BMW 325 to sell for? Imported 680,000 yuan, now that it is made in China, how many thousand yuan can the cost be reduced?"
Before the price was officially announced, an automotive industry reporter asked a colleague next to him.
"The price in my heart is 420,000 yuan, but it is likely to be more expensive, because this batch of BMW is basically produced in a pure import mode, and only the wheels need to be installed in China. At such a cost, you should be able to imagine the final selling price. ”
Another reporter who was asked replied.
When communicating among peers, the early 400,000s have become the consensus of many people.
"With blue skies and white clouds, BMW's unique logo has been interpreted in China very meaningfully. Today, the BMW 325 sedan, a joint venture between China Group and BMW Group, is officially launched, and it will become a price benchmark in China's luxury car market!"
Before the price was announced, Han Hao stood on the stage and talked eloquently.
As soon as they heard the price benchmark, many reporters and guests in the audience stretched out their ears, and some even made a small bet to see what the price of the domestic BMW was on the market.
"BMW 325i - 388,000!"
As soon as the price was announced, there was an immediate burst of exclamations and cheers from below.
The price of Zhonghua BMW surprised everyone, many people thought that the price was more than 400,000 yuan, but Han Hao announced a price that many people could not believe.
380,000 to buy BMW, who wants to see what Honda, Volkswagen, GM!
The crowd below erupted in applause, applauding the reasonable pricing of China BMW.
No one guessed the small bet set by the media peers before, and everyone gave a prediction of a higher price.
"BMW 530i - 558,000!"
The price of the 5 Series of the A6 luxury 2.4 version is also 100,000 lower than expected.
The 3 Series and 5 Series will work together to encircle the Audi A6, which is also the biggest compliment to the A6 that monopolizes the bus market.
The cost-effective listing of China BMW soon triggered a boom in sales, and now it is the turn of BMW to enjoy the treatment of increasing the price of the car, and the price increase of 20,000 yuan has become the norm.
According to the growth rate of orders received now, BMW's annual sales of more than 10,000 units will not be a problem, and it will hit 20,000 units directly.
This time, the benchmark pricing of domestic BMW directly lowered the price of Accord, Passat and other types of models by 2-30,000 yuan, and they soon announced an official wave of price cuts. Despite reluctance, Audi also announced a $10,000 price cut for the A6 to meet the challenge from BMW.
First there was Guangben Accord, and then there was Zhonghua BMW, which set a price benchmark in the Chinese auto market in turn, which directly affected the pricing of similar models of other brands in the future, and became an insurmountable mountain.