“Have you calculated how much you need to invest for building so many factories at the same time?” Zhang Ruiqiang asked. This would be an astronomical amount.
“I had calculated. One factory would need an investment of about 100 million RMB. I am planning to invest 1 billion RMB in building 5 automobile factories and 5 motorcycle factories. The factories will be located in the north, south, east and west of China. This way, I can surround the central and cover the whole of China’s market……”
Zhang Ruiqiang was shocked by Feng Yu. Not only Feng Yu wanted to start the automobile project, but he also wanted to expand the motorcycle project. Feng Yu did not mention anything about this before.
Also. Feng Yu planned to invest 1 billion? Where did he get so much money? 1 billion RMB! The whole Bing City’s annual income was not even that much!
“Do you have 1 billion RMB? Can you confirm that 1 billion RMB will be enough? You did not consider the operational cost of the factories. You need at least a few hundred million RMB more for the materials, workers’ salaries and reserve funds!”
Zhang Ruiqiang was the one in charge of the restructuring of the state-owned enterprises, and he was familiar with these. He felt that Feng Yu had not planned properly.
“1 billion RMB is the initial investment for the first phase. I will increase my investments during the second phase. We might not see any returns in the short term, but in the long term, or 5 years cycle, this investment is necessary. Last year, no one thought that our Songjiang Motorcycles will do well. But, what happened after our motorcycles enter the market? Are our motorcycles selling well? We sold out every single motorcycle we produced. We had made a lot of profits from these sales! Cars will be the same. The demand for cars had increased sharply, and furthermore, the new automobile factories will need at least 1 to 2 years to finish construction. Automobile factories are not as simple as motorcycle factories. When my new cars are produced, it will also be the end of next year.”
1 billion RMB as the first phase investment and he will invest more?
Zhang Ruiqiang’s eyes widen: “How much money do you have now?”
“I had taken loans from the Soviet Union Banks and deposited in Hong Kong banks. Don’t worry about money. I guaranteed that this investment will be worthwhile!”
Zhang Ruiqiang felt that Feng Yu was possessed. He had so much money, and he could always do something else. Just like the humidifiers and bladeless fans. Those were all selling well, and there were no competitors. The profits were high too. Why was Feng Yu so insistent to enter the automobile market?
There were so many automobile companies in China and why was Feng Yu so sure that he would win against them? However, Zhang Ruiqiang must admit that most people do not think Feng Yu’s investments would do well initially. But in the end, Feng Yu would be racking in huge profits.
Also, Feng Yu understands the market well. At the start of the motorcycle project, Feng Yu corrected the exterior design and the product positioning and quickly solved the motorcycle sales issues. Also, the dealership system had helped Songjiang motorcycles spread throughout the whole of China.
Feng Yu saw that Zhang Ruiqiang was keeping quiet and he continued: “Mayor Zhang, have you thought that in the future, there will be branch factories all over China and the factories will be named as Bing City’s Machinery Company XX branch factory. Do you know the benefits of doing this?”
Zhang Ruiqiang was confused. It was normal to name their branch factories this way. What benefits were there for doing this?
“City’s propaganda. A city also needs to be marketed. For example, when we mention Beijing, we immediately think of the Great Wall, Forbidden City, and Summer Palace. When we mention Chengdu, we would think of Pandas. When we mention Changan, the Mausoleum of the First Qin Emperor will come to our mind. It is the same for the opposite. When we talk about the Great Wall, Forbidden City, Pandas and the First Qin Emperor, Beijing, Chengdu, and Changan will come to your mind, right?”
Zhang Ruiqiang nodded. It seems this was indeed the case. He had not noticed about this before in the past. But what was Feng Yu trying to say? There was no historical landmarks or protected animals in Bing City.
“Then, when I mention FAW, will you think of Jilin? When I mention Shanghai brand cars, will you think of Shanghai?”
Zhang Ruiqiang’s eyes shined: “You are going to change Songjiang brand to Bing City brand?”
Feng Yu: “……
Dream on! Bing City brand sounds too weak! If you are producing ice cream, Bing City will be a good brand name. Songjiang Motors will be a better name for automobiles.
“I did not say that. What I meant is to let our factories to cover the whole countries and let our cars and motorcycles to be sold everywhere in this country. Soon everyone in China will know that Bing City have the best automobile company and whenever they ride a motorcycle or drive a car, the first thing that comes to their mind is Bing city. This is City marketing. Of course, if the City is willing to foot part of the advertising fees, I can add in the words “Manufactured by Bing City” at the end of all my commercials!” Feng Yu smiled and said.
“Impossible. Your company wants to advertise, and you want the city to pay? Stop dreaming!” Zhang Ruiqiang angrily waved his hands. You can even invest 1 billion and yet you still want to take money from the City?
Feng Yu was too much!
Zhang Ruiqiang did not know that his thinking was slowly leading away by Feng Yu. Now, in his mind, it was not about setting up new factories, but he was thinking about marketing the City.
“Mayor Zhang, have you ever thought that Bing City might one day be like Beijing, becoming world renown? Last year, Beijing had hosted the Asian Games, and many people in Asia remembered Beijing. Now, I owned the patents of two best-selling home appliances. For the next 7 to 8 years, my products will continue to be sold all over the world. What do you think if I add the words “Manufactured by Bing City” on my products?”
Zhang Ruiqiang’s breathing became rapid. If that was the case, then Bing City will be well known, and at the same time, it will increase Bing City’s standings in China!
In two years’ time, the Bing City Party Secretary will retire, and the current Mayor will take over that position. The Mayor position will be vacant, and he was the one with the highest chance to take over that position.
If Bing City’s standings were increased, then he could be promoted to higher ranks. Zhang Ruiqiang was also an ambitious person, and if he had the chance, he would not give up.
Feng Yu continued to entice him: “Mayor Zhang, I need you to support my proposal for the City Government meeting, and we can provide the City with more taxes. Even if Bing City’s government were left with 10% shares of the Machinery Company, the City’s income would be much more! Also, this automobile company will be the first Chinese private and government joint partnership, and the scale is one of China’s top three companies. What do you think the higher-ups will think about you? You are the one who had helped this company to succeed!”
Zhang Ruiqiang waved his hand: “Enough. You go back first. I need to think about this.”
