Two low-speed electric cars were priced similarly, but one used a new type of battery that lasted longer.
When the quality was about the same, which one would consumers choose?
The answer was obvious!
After a moment of silence, Wei Xiaojun asked, "What kind of batteries do you use?"
The other man had taken the bait. Xu Yifan smiled. "I don't mind telling you outright. They're new lithium iron phosphate batteries.
"They're safe, and they can be charged and discharged up to five thousand times. Even after ten or twenty years of use, they'll still retain eighty percent of their capacity.
"Oh, and the patent's already registered. You can ask someone to check with the patent office."
Wei Xiaojun had been thinking along the lines the other man had intended, but then he suddenly realized something.
"Wait. The market's huge. With your production capacity, you can't supply all of it!"
"Even if the batteries are excellent, they won't do you any good if you can't build enough cars."
"Jiuzhou Automobile Factory's capacity can affect, at most, two or three nearby cities. You're a long way from the provincial capital, so we're not even competing with each other."
Xu Yifan nodded and replied frankly, "I admit that Jiuzhou Automobile Factory's production capacity is insufficient right now!
"But while I can't do much about provinces outside Xichuan, things could be different within the province!"
"Would you let someone else sleep in your own bed?"
"The first competitors Jiuzhou Automobile has to face are the companies within the province, like Xichuan Automobile.
"So the first step is to open Jiuzhou Automobile Factory dealerships throughout the province, starting with cities that have car factories and can produce cars similar to the Jiuzhou Mini."
First, they'd take on each factory's home turf!
"Oh, and you may have picked the best spots for your dealerships. I'll just open a Jiuzhou Automobile Factory dealership nearby."
"Convenient. We can use your locations as they are, just like contract manufacturing."
"Maybe your factory can spend the money to make the cars, then sell them outside the province. In that case, I'll let you off the hook."
"The only downside is that shipping costs will be higher!"
"Keep in mind, I'll be expanding. Even the neighboring provinces may not be safe!"
Wei Xiaojun shook his head. "You're still missing the point. We're back to the same question: if you can't find a contract manufacturer, how can you be sure your production capacity will be enough to capture the entire Xichuan market?"
Xu Yifan waved a hand, signaling for him to listen. "Don't rush. Let me finish!"
"Jiuzhou Automobile is indeed in a difficult position 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 we used the whole hundred million to expand production, we'd still be stretched thin and unable to supply the entire Xichuan market.
"But there's another loan in the works, also for one hundred million!
"That might not be enough to buy top-of-the-line fully automated production lines, but it'll be more than enough to give the Jiuzhou Mini's output a big boost.
"And those sums are just small change. What really gives me the confidence to expand is my own family.
"I was able to buy the entire Jiuzhou Automobile Factory in my twenties. Do you really think my family is short on money?!"
Pointing to his handsome face, Xu Yifan continued, "You may not know who I am, but that's all right. My father has a little name for himself in Xichuan Province.
"My father's Xu Qing'an. I won't say more, but he has a few hundred million yuan—maybe even over a billion."
Xu Qing'an?!
One of the two leading figures of the Xu family today!
Wei Xiaojun had heard that name many times.
The Xu family was usually rather low-key and didn't have a hand in many industries.
But the family had been in the leather business for generations, from producing raw materials upstream to selling branded goods downstream, and had amassed a huge fortune!
And it wasn't just wealth. The family also had an impressively powerful network of connections.
There were also rumors that the Xu family had businesses overseas, run by another remarkable member of the family, and that they brought in handsome profits every year.
This was a truly wealthy family!
Xu Yifan smiled as if it were nothing. "Worst comes to worst, I can just go home and ask for money. I have the technology and the market, so my family will certainly support me.
"With ten or so billion yuan, I'll have more than enough to expand and capture the entire Xichuan market. I might even have money left over to expand into the neighboring provinces!
"Or you could open your dealerships farther away, in Dongshan.
"If you go too far, Jiuzhou Automobile Factory won't be able to do much for now, so you'll still be able to make a little money.
"But it won't amount to much, and you'll be up against other carmakers too. It'll be hard to grow."
Wei Xiaojun sighed helplessly. "That's unfair competition!"
Xu Yifan smiled. "Don't throw accusations around. Do you even know what unfair competition is?"
"This is normal sales activity. The products are right there for consumers to choose from.
"We'll lay out the pros and cons of both types of batteries and offer a ten-year battery warranty.
"All I'm doing is upgrading the old model and selling the second-generation Jiuzhou Mini."
Wei Xiaojun asked about something that had been puzzling him. "If that's the case, why don't you make the cars yourself?"
"Jiuzhou Automobile Factory's ambitions go beyond Xichuan Province!"
"If we build our own factories, we won't be able to ramp up production very quickly. Contract manufacturers, on the other hand, can expand capacity rapidly and help us reach more places across the country."
"I understand," Wei Xiaojun said, nodding.
Then he sighed. "The student has surpassed the master. The Xu family has produced another talented man. Fine, let's talk about contract manufacturing!"
Xu Yifan said, "After costs, I'll give you around eight hundred yuan in profit per car.
"We'll supply the batteries, and Jiuzhou Automobile will purchase all the other components and deliver them to your factory for production.
"At that price, after labor costs, you'll have about five hundred yuan in net profit per car.
"Of course, if you cut your labor costs further, you can make even more."
Wei Xiaojun made a quick calculation based on his factory's capacity and labor costs. The amount seemed about right.
It didn't seem like much, but once production ramped up, the profits would be substantial. It was a decent way forward.
Still, who ever complained about making more money? "Add another five hundred yuan per car, and we can sign the contract right now!"
He'd start high and bargain down, after all!
Xu Yifan turned him down without hesitation. "No. You'll get around five hundred yuan in profit per car. That's my final offer.
"I'm not the kind of person who quotes one price and then haggles over it. There are other car factories in the province, not just yours.
"I'm sure plenty of struggling factories would be happy to make our cars!
"Contract manufacturing is an opportunity. If you can't seize it, you can carry on losing money like you have been!"
Those few words left Wei Xiaojun at a loss for what to say.
Xu Yifan asked again, "How much capacity can your factory set aside for contract manufacturing each year?"
"Our total capacity is about two hundred thousand cars. We don't have any orders for our own products at the moment, so we can put all of that capacity toward contract manufacturing.
"Of course, I can only guarantee one hundred and fifty thousand cars a year. If we start making our own products, we'll prioritize those."
Xu Yifan silently worked out the numbers. "One hundred and fifty thousand is about right. Add Huachen Automobile Factory, and we'd have a total annual output of around three hundred thousand."
That would be enough for Jiuzhou Automobile Factory to ramp up production and capture the entire Xichuan market!
Still, Wei Xiaojun wasn't ready to give up. He brought up the price again. "Let's get back to the price!"
Xu Yifan shook his head. "After labor, equipment wear, and everything else, five hundred yuan per car is already plenty. Jiuzhou Automobile Factory only makes two thousand yuan in profit on each Jiuzhou Mini it sells.
"You don't have to worry about sales. You just need to keep production running. Five hundred yuan in net profit per car is a pretty good deal.
"At an annual output of one hundred and fifty thousand cars, that's seventy-five million yuan in profit each year. That's more than you could've dreamed of before.
"If you used all two hundred thousand units of capacity to make Jiuzhou Minis, you'd make a hundred million yuan. You'd be taking on practically no risk. Why wouldn't you do it?"
He'd more or less achieved what he'd come for, and Xu Yifan couldn't be bothered to keep chatting.
He turned to his secretary. "Give him one of my business cards."
Lin Wanxia, who'd been standing to the side the whole time, quickly rummaged through her briefcase and pulled out a fine-looking business card.
"Think it over. Here's my card. Decide soon and get back to me. If I don't hear from you within two days, I'll find another factory to work with.
"If you agree, bring your people to Jiuzhou Automobile Factory, and we'll sign a detailed contract.
"You can see for yourself whether things really are the way I said."
"It's getting late. Why not stay for a bite to eat?"
Xu Yifan shook his head. After his secretary handed over the business card, he and Wei Xiaojun turned and left.
They'd come to make initial contact. The two companies' representatives would still need to discuss and sign the detailed contract.
But it looked as though there wouldn't be any problems!
After Xu Yifan and Lin Wanxia left, Wei Xiaojun remained seated behind his desk, deep in thought.
His dream of getting rich overnight was slipping away. The duck he'd thought was cooked had flown off!
If what the young man had said was true, it could all very well come to pass.
"Maybe he's right. This might actually save Xichuan Automobile Factory!"
Jiuzhou Automobile Factory had a technological edge of its own, and its products clearly outperformed other cars in the same category.
"Come to think of it, contract manufacturing doesn't sound so bad. We'd make at least tens of millions a year. If we used all our capacity, we could earn over a hundred million."
Besides, if the factory had no orders for its own products, that capacity would just sit idle. They'd still have to pay the salaries of hundreds of workers, which was no small expense!
And contract manufacturing wouldn't involve much risk. It was safe and reliable. Why not give it a try? At the very least, the factory would survive, and the workers would be paid on time.
They'd also make a decent profit and could get by comfortably for the next few years, without worrying that the factory might close at any moment.
After a long while, Wei Xiaojun finally let go of his dream of making a fortune from his own products. He clenched a fist and declared, "Let's do it!"
"I'll go to Jiuzhou Automobile Factory tomorrow and discuss the details of the contract-manufacturing agreement!"
"I'll also take a look and see if they really have their own battery technology..."
If he waited too long, they might find another contract manufacturer!
Xichuan Automobile Factory was considered a fairly large factory in the province, but there were plenty of other factories struggling just as badly.
These days, eight out of every ten domestic car factories were struggling to survive. Countless small factories went bankrupt every year!
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