When it comes to labor-intensive products, people can think of clothing, shoes and hats, televisions, tape recorders, etc., but in fact, many mechanical products also have the characteristics of some labor-intensive products. Like the concrete pump truck and excavator produced by Chen Yu company, it has both technology, capital and labor factors. Needless to say, the labor factor refers to the need for a large amount of manual work in the production process, which cannot be completely replaced by machines for the time being.

A large part of the reason for the high price of construction machinery in Europe is the high wage level of workers, which is very considerable on each piece of equipment. For example, the concrete pump truck produced by Prometheus has more than 30,000 US dollars in labor cost sharing for each vehicle, plus materials, processing machine hours, management expenses, etc., and it is impossible to sell it for 58,000 US dollars.

Heinzl is very clear about the cost composition of construction machinery, Yang Haifan said that China's labor costs are low, which he can't refute, just nodded slightly. Seeing that Heinzl had no objections, Capella nodded and said, "This is just one aspect, is there any other reason?"

Yang Haifan seemed to glance at Heinzl inadvertently, and then said with a smile: "As for the other reason, it's not convenient to say. ”

"Why?" Capella didn't quite understand.

Yang Haifan said: "We are peers with European construction machinery companies, and it is unethical to evaluate peers behind our backs. ”

"You mean...... Is there a problem with the European company?" Capella is also a businessman after all, how can he not understand Yang Haifan's hints.

Yang Haifan nodded and said nothing.

Capella turned his head to look at Heinzl: "Mr. Heinzl, do you understand what Mr. Yang means?"

"I don't understand. Heinzl shrugged his shoulders and said angrily.

Capella turned back to Yang Haifan and said, "Mr. Yang, I ask you to be clearer. I know you Orientals are very reserved, but this is Europe, and I hope you will be able to express your opinion with the frankness of Europeans. ”

Yang Haifan smiled and said, "Mr. Capella, our Chinese company is very honest. If the cost of one of our pieces of equipment is $50,000, then we will add a reasonable profit and quote the sales price of $58,000. We will not quote a high price of 250,000 yuan for equipment that costs 50,000 yuan like some companies. ”

Nima!

Well, in fact, Heinzl said "Fake" in his heart, after all, he didn't know Chinese. Yang Haifan's words couldn't be clearer, it is simply a heart-wrenching argument. What he meant was that Prometheus and other European companies quoted an unreasonably high price to the customer, and they had to quote 250,000 yuan when the cost was only 50,000 yuan. But the conscience of heaven and earth, the cost of building a pump truck is far more than 50,000 yuan!

Based on the pure manufacturing cost, $50,000 for a pump truck is indeed enough. But how can a company sell a product only for pure manufacturing costs?

For example, Prometheus has a very large R&D department that specializes in the development of new products, and this department is simply a gold-sucking beast, with annual costs of hundreds of millions of dollars, which are allocated to equipment. The competition in the European market is so cruel that if any company falls behind in R&D, it will be ruthlessly eliminated by the market. Seriously, a lot of technological innovation does not help much to improve the performance of the equipment, but if you don't do it, customers will think that your product is not good, so Prometheus has to invest a lot of profits in research and development every year, so it has to greatly increase the price of the product.

For example, construction machinery products are easy to fail, a piece of equipment failure, will affect a series of construction processes, so customers always require manufacturers to provide technical services at the fastest speed to help queuing difficulties. To do this, the company needs to set up service centers in various countries and station maintenance engineers all year round. A year's salary, allowances, and travel expenses for an expatriate maintenance engineer are casually millions of dollars, and these money don't need to be spread over into the equipment quotation?

Also, when doing business in the international market, can you not advertise? Don't think that if you are a world-renowned brand, you can not advertise, because there are many people in the world who don't know Coca-Cola? But Coca-Cola's advertising is the best in the world. Users are a bunch of people who are too lazy to use their brains, and they will always choose only the products that are clearest in their memory. The reason why a health care product sold well in later generations was because it adopted a brain-dead advertising bombardment on consumers. Prometheus spends hundreds of millions of dollars on advertising around the world a year, doesn't this money also have to come out of the sheep?

In this way, the east spends a little and the west spends a little, and there is really not much left of Prometheus's profit in a year. A concrete pump truck sells for 250,000 yuan, which can only make Prometheus have a slight surplus at the end of the year. If it is sold at the cost of manufacturing, Prometheus will have to close its doors tomorrow.

"Mr. Yang, does the cost of $50,000 you calculate include the amortization of technology research and development costs?" Heinzl had to speak, and let Yang Haifan continue, he had nothing to say in front of Capella.

Heinzl was forced to negotiate by Capella because he would pretend to be an engineer from Telly. After Capela had previously inquired about the price in Yang Haifan, he turned around and went to Prometheus' booth. He bluntly accused Promax of having too high prices and unreasonable profits, and demanded that Promax reduce prices by more than half, otherwise he would have to purchase equipment from Chinese. Promax's sales staff explained to him for a long time, but failed to convince him, and in the end, Promax could only send Heinzl to accompany him to the Chinese booth to have a look, according to Prometheus, the Chinese quoted such a low price, either dumping at a low price, or cutting corners, for the latter item, there must be professionals to identify.

Heinzl did not expect that before he had time to attack the Chinese, the Chinese fired at Pumai first. The Chinese do not admit that the price of their products is too low, but instead point out that Prometheus is seeking excess profits.

"We certainly include the amortization of R&D costs. Yang Haifan replied solemnly.

"How much do you invest in R&D in a year?" asked Heinzl again.

Yang Haifan said with a smile: "Mr. Heinzl, it doesn't seem appropriate for you to ask this question, right? I can't disclose our R&D costs, but I can tell you one thing, the chief engineer of our company graduated from Imperial College London in the early years, and the current annual salary in the company is 6,000 US dollars, I don't know what the annual salary of the chief engineer of your company is." ”

"You're talking about monthly salary, right?" Capella kindly reminded. Both parties are communicating in English, and English is not a native language for both of them, so there is a high possibility that they will misspeak or hear it incorrectly. Yang Haifan said that the annual salary of the chief engineer in the company is only 6,000 US dollars, which makes Capela feel very incredible, in Europe, the weekly salary of 6,000 US dollars for a skilled chief engineer is not uncommon, how can it be an annual salary?

"I'm the chief engineer of China's Luoqiu Metallurgical Construction Machinery Company, and my annual salary is less than $6,000. Chen Bangpeng, who was next to him, interjected with a smile. The old man is about to retire, and his salary is more than 3,000 a month, and 40,000 yuan a year, which is indeed less than 6,000 US dollars according to the exchange rate, but such a salary level is already considered a high-wage class in China.

"I see. Capela nodded. Just now Yang Haifan has already talked about the problem of low labor costs, and Chen Bangpeng's words confirmed Yang Haifan's assertion. R&D costs are also part of the cost of equipment, and if the salaries of engineers in China are only a few tenths of those in Europe, then the low cost of equipment makes sense.

"That's still not right!" said Heinz, "I suspect that your equipment has serious performance deficiencies compared to similar products in Europe, otherwise there would not be such a big gap in price." ”

Yang Haifan glanced at Heinzl and said, "In what does Mr. Heinzl think that our pump trucks are inferior to their European counterparts?"

"What's your pumping pressure?" asked Heinzl.

"80 megapascals. Yang Haifan said.

"Haha, we'...... Ah no, I mean, Prometheus' latest 62-meter pump truck has reached a pumping pressure of 285 megapascals. Heinzl said triumphantly, almost slipping out.

"So what?" Yang Haifan shrugged, "You're just talking about Prometheus' highest-end pump trucks, and their ordinary 32-meter pump trucks have a pumping pressure of only 110 megapascals, which is not much different from our products." ”

"Well, I'll just say the 32-meter pump truck......" Heinzl also knew that he was secretly changing the concept, and compared with the most high-end products and other people's ordinary models, it was really inappropriate, he pointed to the product description of Chenyu company and said: "Your 32-meter pump truck, the displacement is 80 cubic meters per hour, and the same kind of pump truck of Pumai company can reach 120 cubic meters per hour." ”

Yang Haifan said: "Don't forget, the price of Prometheus' pump truck is 4 times that of us. It also costs $250,000 to buy 1 pump truck from Prometheus, which can pump 120 cubic meters of concrete in one hour, and buy 4 of our pump trucks, which can pump 320 cubic meters, who do you think is more cost-effective?"

"This ......" Heinzl choked at once, and he was also careless and did not settle the account. Prometheus' products are indeed advanced, but the price is also higher, measured by cost performance, Prometheus must be at a loss.

"Yes, according to the cost performance, it is indeed more cost-effective to buy a pump truck from a Chinese company. Capella spoke beside him, he was purely watching the excitement and not thinking it was a big deal. Yang Haifan was able to beat Heinzl's arrogance down, and Capela had room to bargain with Heinzl. If Prometheus insists on biting the $250,000 price and doesn't let go, Capela really wants to buy Chinese products.