Contract Manufacturing, Done!

Two low-speed electric vehicles with similar prices, one using a new type of battery that is more durable.

When the quality is not significantly different, how will consumers choose?

The answer to this question is obvious!

After a moment of silence, Wei Xiaojun asked, "What kind of battery are you using?"

The other party had taken the bait. Xu Yifan smiled and said, "It's okay to tell you directly, it's a new type of lithium iron phosphate battery.

It's safe, and the battery can withstand five thousand charge cycles. Even if used for ten to twenty years, it will still have eighty percent capacity.

Oh, the patent has already been registered. You can have someone check it at the patent office."

Following the other party's train of thought, Wei Xiaojun pondered for a moment and suddenly realized.

"That's not right, the market is so big, you can't possibly capture all of it with your production capacity!"

"Even if the battery is good, it's useless if you can't produce the cars."

"Your Jiuzhou Automobile Factory's production capacity can only affect two or three surrounding cities at most, and they are quite far from the provincial capital. We don't pose any competitive threat."

Xu Yifan nodded and said generously, "I admit, our Jiuzhou Automobile Factory's current production capacity is indeed insufficient!

However, I can't do much outside the province for now, but within Xichuan Province, that's another story!"

"How can I allow others to sleep soundly by my bedside!"

"Jiuzhou Automobile's primary competitors are automobile manufacturing companies within the province, like Xichuan Automobile.

Therefore, the first step is to open Jiuzhou Automobile Factory stores in all cities within the province that have automobile manufacturing plants and can produce vehicles similar to the Jiuzhou Mini!"

First, attack the strongholds of each factory!

"Oh, and perhaps your stores are located in prime spots. I'll just open a Jiuzhou Automobile Factory store nearby."

"It's convenient, I'll use what's available, just like imitating production."

"Perhaps your factory can spend money and sell your products outside the province after they are produced. I'll let you off the hook then."

"It's just that the transportation costs will be a bit higher!"

"Be aware, I will expand. Nearby provinces might not be safe enough!"

Wei Xiaojun shook his head, "You're missing the point. Going back to the previous question, if you haven't found a contract manufacturer, how can you guarantee that your production capacity can capture the entire Xichuan Province market?"

Xu Yifan waved his hand, signaling the other to listen quietly. "Don't rush, let me finish!"

"Jiuzhou Automobile is indeed facing difficulties right now, but just a few days ago, Jiuzhou Automobile Factory secured a loan of one hundred million yuan.

You could say that even if the entire hundred million is used for expanding production, it will still be barely enough and won't be able to capture the entire Xichuan Province market.

In addition to this hundred million, there's another loan in the works, also for one hundred million!

While this money might not be enough to purchase high-end fully automated production lines, it's enough to significantly boost the Jiuzhou Mini's production capacity.

And these are just small amounts. What truly gives me confidence in expanding production is myself.

I, in my twenties, can afford to buy the entire Jiuzhou Automobile Factory. Do you think my family lacks money?!"

Pointing to his handsome face, Xu Yifan said again.

"You might not know me, but that's okay. My father has some reputation throughout Xichuan Province.

My father, Xu Qing'an, I can't say for sure, but he has several hundred million to over a billion yuan."

Xu Qing'an?!

One of the two outstanding figures of the Xu family!

Wei Xiaojun had heard this name many times.

The old Xu family, although generally low-key and not involved in too many industries, had operated a leather business for generations. From upstream raw material production to downstream brand sales, they had accumulated substantial wealth!

And it wasn't just wealth; they also possessed formidable connections.

Furthermore, according to some reports, the Xu family also had businesses overseas managed by another prominent figure, generating considerable profits annually.

This was a truly wealthy family!

Xu Yifan said with a nonchalant smile, "At worst, I can go home and ask for money. With the technology and the market, my family is very supportive of me.

With over a billion yuan, it's enough for me to expand production and capture the entire Xichuan Province market, perhaps even more than enough to expand into neighboring provinces!

Why don't you open your stores a bit further away, perhaps in Dongshan.

If it's too far, Jiuzhou Automobile Factory won't be able to do much. We might still get a small piece of the pie.

It would be just a marginal gain, and with other car manufacturers as competitors, it would be difficult to develop. "

Sighing, Wei Xiaojun said helplessly, "This is malicious competition!"

Xu Yifan smiled and said, "Don't throw around accusations. Do you know what malicious competition is?"

"This is normal sales activity. The products are there for consumers to choose the ones they like.

We'll present the advantages and disadvantages of both types of batteries and offer a ten-year warranty on the batteries."

"I'm upgrading the old model and selling the second generation of Jiuzhou Mini cars."

Wei Xiaojun asked a question that had been bothering him: "If that's the case, why don't you produce them yourself?"

"Jiuzhou Automobile Factory's ambition isn't limited to Xichuan Province!"

"Building our own factory for production would mean we can't achieve significant output in a short time. However, a contract manufacturer's production capacity can be rapidly expanded to cover more areas nationwide."

"I understand," Wei Xiaojun nodded.

He then sighed, "The student surpasses the teacher. The Xu family certainly produces talented individuals. Fine, let's discuss the contract manufacturing matter!"

Xu Yifan said, "For contract manufacturing, besides costs, you'll have a profit of around 800 yuan per unit.

We'll provide the batteries, and Jiuzhou Automobile will uniformly procure all other parts and deliver them to your factory for production.

After deducting labor costs from this price, there will be a pure profit of about 500 yuan per unit.

Of course, if you can further compress labor costs, the profit can be even higher."

Calculating the figures based on his factory's capacity and labor expenses, Wei Xiaojun felt the profit margin was roughly similar.

While the price might not seem high, once production capacity ramps up, it becomes quite formidable. It represented a viable path forward.

However, who would refuse more money? "Add another 500 yuan per unit, and we can sign the contract immediately!"

It's a negotiation tactic, starting high and coming down!

Xu Yifan directly refused, "No, you can only get a profit of around 500 yuan per unit. This is a firm offer.

I'm not someone who likes to name a price and then haggle. You're not the only automobile manufacturing plant in the province.

I believe many struggling factories would be very willing to do contract manufacturing for us!

Contract manufacturing is also an opportunity. If you don't seize it, you'll continue to operate as you have been, with annual losses!"

These words left Wei Xiaojun speechless for a moment.

Xu Yifan asked again, "What production capacity can your factory allocate for contract manufacturing annually?"

"Our total production capacity is around 200,000 units. We currently have no production tasks for our own products, so we can allocate our entire capacity for contract manufacturing.

Of course, we can only guarantee 150,000 units per year. If our factory develops its own products later, we will prioritize producing them."

Xu Yifan silently calculated, "150,000 units is about right. Combined with Huachen Automobile Factory, that's a total annual output of around 300,000 units."

This would be enough for Jiuzhou Automobile Factory to expand its production capacity and capture all the market share within Xichuan Province!

Still feeling a bit unwilling, Wei Xiaojun spoke again, "Let's go back to the price!"

Xu Yifan shook his head, "After deducting labor costs, mechanical wear and tear, etc., 500 yuan per unit is already quite substantial. Keep in mind that Jiuzhou Automobile Factory only makes a profit of 2,000 yuan per unit on its own Jiuzhou Mini.

You don't have to worry about product sales; you just need to operate at full capacity. A pure profit of 500 yuan per unit is already excellent.

With an annual production of 150,000 units, that's an annual profit of 75 million yuan, something you probably never dared to imagine before.

If your entire 200,000 capacity were used to produce Jiuzhou Mini, that would be a profit of 100 million yuan, without bearing any risk. Why wouldn't you do it!"

Having basically achieved the objective of his visit, Xu Yifan was no longer inclined to linger and chat.

He said to his secretary, "Give him one of my business cards."

Lin Wanxia, who had been standing nearby for a while, quickly rummaged through her briefcase and took out an exquisite business card.

"Think about it carefully. This is my business card. Get back to me with your decision as soon as possible. If I don't hear from you within two days, I'll find another factory to cooperate with.

If you agree, you can bring your company representatives to Jiuzhou Automobile Factory, and we can sign the specific contract.

You can also see for yourself if everything I've said is true!"

"It's getting late, why don't you stay for a simple meal?!"

Xu Yifan shook his head. After his secretary handed over the business card, the two turned and left gracefully.

Their visit today was primarily for initial contact. The signing of specific contracts and other details would require further negotiation between representatives of both companies.

However, it seemed unlikely there would be any major issues!

Xu Yifan and his companion left, leaving Wei Xiaojun, who remained somewhat silent behind his desk, deep in thought.

His dream of getting rich overnight seemed to be fading away, and the duck he thought he had caught was now flying away!

If everything unfolded as the young man had described, it could all become a reality.

"Perhaps it really is as the other party said. This might be a way to save Xichuan Automobile Factory."

With Jiuzhou Automobile Factory's technological advantages, its products had a clear edge over similar competitors.

"Speaking of which, contract manufacturing doesn't seem impossible. There's at least tens of millions in profit annually, and if we use our entire capacity, we could earn over a hundred million."

After all, if there were no demand for their own product, the idle production capacity would be useless. They would still have to pay substantial wages to hundreds of workers, and the salary alone was a significant expense!

Moreover, contract manufacturing wouldn't involve much risk. It was stable and secure, so it wasn't an unappealing option. At the very least, the factory would survive, and the workers could be paid on time.

There would also be a considerable profit, allowing them to live comfortably for the next few years without the constant worry of bankruptcy.

After a long while, Wei Xiaojun finally abandoned his fantasy of striking it rich with his own product and slammed his fist down, "Let's do it!"

"I'll go to Jiuzhou Automobile Factory tomorrow to discuss the specific contract manufacturing terms!"

"Might as well see if they really have their own battery technology..."

If I went too late, I was really afraid they'd find another contract manufacturer!

Although their Xichuan Automobile Factory was considered mid-to-upper scale within the province, they couldn't afford to have too many other factories struggling just as much.

In this era, eight out of ten domestic automobile factories were struggling to survive, with countless small factories going bankrupt every year!

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