“I will definitely go there if I have time!”
Pollard Watt said: “The Gaoheng assembly plant we acquired is not far from Aurous Hill, and it only takes a few hours to drive there.”
“The trial process itself only takes about five or six hours.”
“We resolved the issue and quickly adjusted the prototype manually.”
“The revised version will be available in a few days.”
Charlie mused, “The round trip will take several hours, and it will probably take most of the day.”
“If we also include tasting sessions, one day might not be enough.”
“How about this, we order a helicopter and fly straight there.”
“That way, we can save at least five or six hours and can go home on the same day.”
Pollard Watt smiled and said, “Helicopter flights are expensive, so we haven’t made this offer yet.”
“But since you’ve said so, Mr. Wade, then we’ll do as you say.”
“Is tomorrow morning a good time for you?”
“I will book a helicopter in advance, and it will depart from Changying Automobile headquarters in Aurous Hill!”
“Great!” Charlie agreed and said, “I’ll be there on time at 8 tomorrow.”
…
Since he could go back and forth on the same day, Charlie didn’t greet his family.
After Claire went to the company, she took a taxi to Changying Automobile headquarters.
There, along with Pollard Watt and several key executives, he took a Bell helicopter to the Gaoheng Automobile final assembly plant more than 200 kilometers away.
After the helicopter arrived at the final assembly plant, the staff took everyone to a completely enclosed workshop where there was an open space of at least a thousand square meters, where the avant-garde sports car was parked quietly.
The overall appearance of this car looks very stylish.
The sleek front end, wider body, higher rear wing and nearly 30 centimeter wide tires indicate the car’s sporty stance.
Pollard Watt said to Charlie, “Mr. Wade, our current product plan is to launch a five-passenger sports sedan first, then a five-passenger sports SUV.”
“This sports sedan will be priced between 200,000 and 300,000 RMB, and this sports SUV will be priced between 220,000 and 320,000 RMB.”
“We will maximize the price-performance ratio of these two models, so that consumers can feel our sincerity.”
Charlie asked him, “Professor Watt said the price/performance ratio is very good.”
“I see a lot of cars on the market claiming to have a very high price/performance ratio, and some are even being sold at a loss.”
“If we want a high price/performance ratio, do we have to lose money to get publicity?”
Charlie doesn’t care about money, but he cares about reputation.
He thinks that the best development direction for Changying Automobile is market recognition, while at the same time he can also gain certain profits.
The profit is not to make money for oneself, but to prove that Changying Automobile has high product strength and is able to make money.
If it loses money for the sake of gaining publicity, it is essentially a failed brand and a failed venture, which will embarrass its parent company.
Pollard Watt said to him, “Young Master Wade, many car companies in the market are actually misleading.”
“They say they are losing money, but that is just a financial scam.”
“Many car companies convert hardware investments and initial development costs into car production costs.”
“It’s like they invest 100 million to open a luxury hotel, earn 50 million per year and recoup their investment in two years.”
“The profits are clearly large, but as long as the 100 million investment hasn’t been recouped, they can boldly claim to have made a loss.”
“They tell consumers they lose money every time a room is sold, and they completely subsidize consumers, making consumers think their rooms are very cost-effective, when in fact their rooms are very profitable.”
At this point, Pollard Watt continued, “Sometimes, to reduce profits or even cause companies to report losses, they will spin off some of the company’s profitable businesses and increase investment in other areas.”
“For example, as I just mentioned, a hotel with a total investment of 100 million yuan and a profit of 50 million yuan per year will recoup its investment in two years.”
“However, after one year and ten months, they will invest in a second store and also take over the catering and other profitable services of the first store and set up another company to handle them.”
“As a result, they will still report losses in the third year.”
Charlie smiled and said, “I understand.”
“These companies are actually transferring tens of billions of rupiah in initial investment to early-stage consumers.”
“The actual cost of producing the car is only 100,000, then it is sold for 300,000, with a gross profit of 200,000.”
“However, because the initial investment reaches tens of billions, each car must bear costs of tens of millions.”
“In this way, it is as if they are selling the car at a loss.”
“That’s right.” Pollard Watt nodded and said, “So, I suggest we don’t play with consumers like this from the start and don’t collude with them.”
“If we want to become bigger and stronger, we must overthrow their unwritten rules and cut off their financial support outright.”
Charlie asked curiously: “Professor Watt, do you have any plans?”
Pollard Watt said: “Mr. Wade, my plan is that Changying Automobile can be like Pang Donglai.”
“We can immediately record all the costs of a car.”
“First of all, intuitive costs, such as raw material costs, production costs, taxes, logistics, warehousing, and management and sales costs for each car.”
“All these costs must be clearly recorded.”
“Then, there are hidden costs, such as design costs, mold costs, and production line costs for this car. For this portion of the costs, we’ll divide it based on a sales volume of 500,000 units for each car.”
“If we have invested a total of 5 billion in the research, development and production line of this model, then the hidden cost of each car is 10,000 yuan.”
“Once cumulative sales of this car exceed 500,000 units, it means we have recouped the initial investment costs.”
“Therefore, starting from the 500,000th and 1st units, the price of our cars will be reduced from this shared cost portion.”
“After recording all these costs, expenses, we will announce to consumers how much our pre-tax profit is to ensure that our profit margin is within a reasonable range.”
Charlie’s eyes lit up and he said, “I’ve never heard of a car being sold like this.”
“Even the popular Remi car has not disclosed its R&D costs and hardware investment costs.”
“That’s right!” said Pollard Watt, “The automotive industry is already very vibrant.”
“Everyone is constantly introducing new products and offering discounts and price cuts, but the reality is, many cars are overpriced!”
“Like an imported brand that costs 300,000 yuan and sells it to consumers for 1 million yuan.”
“If 1 million yuan is sold, they will activate the terminal price increase mechanism.”
“Even if the selling price is 1 million yuan, you will never be able to get the car unless you add 100,000 or 200,000 yuan.”
“If we find no one is willing to pay more, we will sell it at a guide price of one million.”
“If even one million doesn’t sell, I’ll sell it for 800,000, 700,000, 600,000, or even 500,000…”
“I think this practice is like writing the words ‘unscrupulous entrepreneur’ right on your face.”
“Consumers will definitely get a very bad impression and it will have a big impact on the brand image.”
“Because we are late and want to catch up, we have to do what our predecessors did not dare to do, or were not willing to do.”
“We just have to put aside the facade and face consumers honestly.”
“If they can’t balance, they deserve to be eliminated!”