“No. we will be setting up a factory in Russia to produce our Off-roads, and will use our ‘Oriental Deer’ brand for our overseas market.” ‘Oriental Deer’ had become Bing City Machinery Company sub-brand, and this year onwards, China’s Songjiang – Off-roads, will be renamed as Oriental Deer.
“Setting up a factory in Russia? I thought we planned to set up a factory in the US this year.” Li Mingde was confused, as Feng Yu had not said anything about this. They still have exportation subsidies for this year.
“The factory in Russia will be a joint-venture with Moscow’s Polar Bear Automobile to produce our Oriental Deer. This cooperation is similar to Audi and SAIC’s joint-venture in the early years. I had discussed with the other party, and we will provide with the technologies, part of the capital and some experts, for 49% of the company’s shares.”
Li Mingde’s jaw drops. What the hell is happening? We are the ones providing technologies and experts?
Although ‘Oriental Deer’ is selling well in Russia and East Europe, that is Russia. Russia has some of the most advanced technologies in the world. How is it possible that we are the ones sending people to teach them?
Li Mingde does not know that Volga cars went into a decline and only starts to pick up in the years before Feng Yu’s rebirth. Before Volga’s sales begin to pick up, they were still producing decades-old models. All along, Volga had never looked into small passenger cars. Russia might be one of the most influential industrial countries. Still, along the streets, most of the vehicles are overseas brands. Their domestic automobile brands own only slightly more than 5% of the market share!
The Volga could revive because Putin came into power and changed the policies. But their growth is only limited to Russia. During the Soviet Union era, Russia’s cars are world-renowned, and are famous for its durability!
“Manager Feng, are you joking with me? Can’t they develop the technologies themselves? With their industrial capabilities, it should be effortless.” Li Mingde was stuttering.
“Yes, Russia can develop these technologies easily, but they are more inclined to heavy industry, and had never changed. If not, why would they import cars from us? Of course, the value of the technologies used in Oriental Deer will not be high. However, it is still China’s first automobile technology export!”
Li Mingde’s face turned red with excitement. Bing City Machinery Company’s Oriental Deer will be China’s first technology export!
This is an honor. Compared to those automobile manufacturers, who are importing technologies from overseas companies, this is several levels higher! Let’s see who dares to be arrogant in front of me in the future!
If you all are capable, develop a good vehicle, and export the technologies out! What’s there to be proud of you all can’t achieve these?!
No wonder Manager Feng says he wants to produce new car models and lower Oriental Deer’s production. This plan will work!
Li Mingde and his team always felt that exporting to East Europe has lots of restrictions. Other than taxes, they had to rely on that Russian boss.
Russia’s automobile market is big and has lots of brands. Li Mingde and his men were worried that their cars might be squeezed out of the market suddenly, as Russia’s automobile market has lots of other brands.
But it is different now. Getting into a joint-venture with that Russian will increase Oriental Deer’s sales. Although their profits for each vehicle will be lowered, the total profits will increase significantly. It will also increase Songjiang Motors’ brand awareness.
“Manager Feng, I will report this to the City Government.” But after saying this, Li Mingde looked at Feng Yu embarrassedly, as Feng Yu is the company’s biggest shareholder and holds the right to make all the decisions.
“It’s alright. Go and report this. This joint-venture will benefit Bing City Machinery Company and should have not a problem getting their approval. If the City does not agree, tell them that Fu Guangzheng and I had agreed.”
Huh? What can the City Government do? If they opposed to this proposal, Feng Yu will call for a shareholders meeting and see who calls the shot in the company!
But Feng Yu knows that the City Government will not object to this. This joint-venture is political points for them, and they will undoubtedly support it!
“I will inform them now.”
Li Mingde ran out of the room. He must be very excited, as it is rare to see someone at his age running so fast.
……
Bing City Machinery Company’s Deputy General Manager, Li Dafu, held a meeting with the top management to discuss technologies exportation to Russia.
When all of them heard about the news from Li Mingde yesterday, they were shocked. Bing City Machinery Company can export their technologies to Russia! This is something they had never expected!
The representative from the City Government is overjoyed. Yesterday, he had received instructions from his higher-ups to support this proposal fully.
The representative from the City Government should be getting a promotion soon!
Everyone in the company was thrilled when they heard this news, and no one opposed it. Although they will lose some profits temporarily, but there are more benefits in the long term.
Most importantly, this is something honorable!
“Everyone! I had notified everyone about this matter last night and asked all of you to think about it. Although Mr. Kirilenko had worked with us for a long time, this is our first major cooperation, and also the first in China’s history!” Li Dafu exclaimed proudly.
“Now, we have come up with a few cooperation proposals. The first proposal is to sell the technologies in exchange for shares. After that, we will not interfere with their operations. The second proposal is to supply our technologies continuously. We will oversee the R&D and will share any future Oriental Deer technologies with them. This way, we can save some money. The third proposal is to share all our automobile models with them. We might even not spend a single cent in the venture. All of you should know about these proposals yesterday, and let’s pick the most suitable proposal now.”
These three proposals are suggested by Kirilenko. Feng Yu does not like the third proposal and prefer the first and second proposals. The initial proposal is the same as the cooperation between overseas companies and the local automobile manufacturers.
“I think the first proposal is the best. The second proposal requires us to supply our technologies continuously, and it will lower the value of our technology. As for the third proposal, I feel we don’t need to cooperate with them for all our models.” The Deputy General Manager in charge of Motorcycles said.
“I prefer the third proposal. We only have a few models, and it is only limited to the existing models. We got nothing to lose if we give them, as we are introducing newer models later this year.” The head of operations said.
“I think the second proposal is the best for our benefit. We can always introduce new brands, like Northeast Tiger, Eastern Leopards, etc. and don’t need to share those technologies with them.” The Deputy General Manager from SASAC said.
People are supporting and opposing each proposal, and not a single proposal had gotten more than 50% votes. Li Dafu frowned and didn’t know which proposal to use.
