Chapter 291 – The Automobile Dream
10 million RMB worth of shares!
Master Lu was shocked by Feng Yu’s generosity!
He was someone who had seen considerable amounts of money before. Even a few million RMB will not attract his attention. But never in his life, he had met someone that would give him 10 million RMB in exchange for some favors.
This 10 million RMB was still not cash. It was shares. Every company Feng Yu invested in, made lots of profits. This was equivalent to giving him a long-term stable investment with lots of returns.
Master Lu looked at Feng Yu and thought deeply. If Feng Yu was willing to give him so many shares, then the things he mentioned should not be an easy task.
It was impossible for a businessman to give away his wealth for nothing. He evidently wants something back in return, and that something will be more valuable than what the businessman gave out. If not, that person is not a qualified businessman.
Master Lu had done a background check on Feng Yu, and he knew that Feng Yu was not only a qualified businessman but a successful businessman.
“Manager Feng, can you tell me in detail what you really want me to do?”
“This Machinery Company was originally a state-owned enterprise owned by the City Government. But later, this company was restructured, and I had used technologies to exchange for a stake in the company. Then I used machinery and equipment to get the shares from another shareholder. Later, I used technologies and machines to invest in the company. Now, I am the biggest shareholder in the company and owns more than 50% shares. The City Government was not happy about this. But now, the company needs to expand and capture the market share. This would need more investments. Bing City Government does not have so much money, and if they want to stop me, there was nothing I could do even if I am the biggest shareholder. After all, most of the people in the factories were all from Bing City, and they were the former employees of the former Machinery Factory……”
Feng Yu explained the issues he was facing. Administrative interferences was a hinder to the development of a company. Feng Yu had promised that he would not dilute the City’s shares further, but he needs to plan for the company’s growth and need to build additional factories. This was the only way to capture the automobile market in a short period of time. He does not want to let the Japanese and German automobile companies the chance to take over the Chinese market!
If there were a policy from the top that encourages the development of privately owned companies and stops the local government from interfering, it would solve Feng Yu’s problems.
When that happens, Feng Yu would go to the City Government and show them the big picture. He believed the City would agree to set up branch factories. Also, the City government would not have enough funds to invest further, and their shares will be diluted further.
Feng Yu wants to be the controlling shareholder. He needs to own over 67% shares! Although he had the support of the Fu family, Feng Yu does not trust the Fu family entirely now. It would be safer for him to own the shares himself.
Feng Yu still have about 1 billion RMB left after repaying his debts to the bank. 100 million RMB was more than enough to set up a new factory. However, Feng Yu was still not sure if Kirilenko could buy more production lines for him.
After investing in Kirilenko’s mining enterprise, Kirilenko had given Feng Yu the equipment and technologies he promised. Feng Yu had also made some profits from those. The most expensive ones were the military-related stuff, like aircraft engines, fighter jest manufacturing technologies, etc. These were all given to the Aviation Factory. There were some other generator related technologies which were given to the Motor Factory. In return, Feng Yu got back the humidifiers shares, automobile related, and batteries associated technologies.
Although it may seem like Feng Yu was making a loss, but Hou Haitao had helped him a lot and saved him from a lot of problems. Also, in the future, Feng Yu would get back whatever he put in, as technological development was the core of any enterprise.
If Feng Yu were to set up 5 new factories for the automobile, he needs to prepare some reserve funds and invest in the R&D. If he does the same for the motorcycles, then Feng Yu’s 1 billion RMB might not even be enough!
Looking at Toyota, one can tell how profitable the automobile industry will be in the future. World’s top 500 companies, top 100 brands, world’s top automobile manufacturer and their most lucrative market is the Chinese market.
Volvo, General Motors, Mercedes, BMW, etc. automobiles companies were all fighting for the Chinese market. Their sales in China, make up a significant percentage of their total sales.
If Japan’s Toyota, from an area so small, can become the top company in the world, then China, with such high population and so many good engineers, coupled with the engineers Feng Yu recruited from the Soviet Union and Feng Yu’s “future vision”, he could capture the Chinese market easily.
It was just like South Korea’s automobile companies. They asked their fellow countrymen to support their own brands and then slowly improve their technologies.
In the future, it was until that person from Hangzhou appears, China finally has its own well-known automobile brand. That person from Hangzhou had a famous saying, and Feng Yu had said it to Zhang Ruiqiang before: Cars are just one engine and four wheels. Since we know how to build these, why can’t we make cars?
What Feng Yu wanted now was a policy from the central government or let the City Government not to interfere with his plans. This way, Feng Yu could continue to use his wealth and machines to dilute the city’s shares and complete his plans.
In 5 years’ time, Feng Yu wants his Songjiang cars to be known all around China and even overseas.
After the was implemented in 1994, many of China’s automobile companies were restructured after running into difficulties. Some were even taken over!
Master Lu thought for a while and asked Feng Yu: “Issuing a new government policy is hard. But I will get people to try to speak to the central government. You must make it large scale. If you are only setting up 1 branch factory, it would be hard. But if you are setting up 3 branch factories, maybe the higher-up will look into it!”
Feng Yu got Master Lu’s hint. Master Lu was telling Feng Yu to make it large scale. Once the company reaches a certain scale, the City Government could no longer hold him back.
This was in-line with what Feng Yu wanted. He wanted to set up a large enterprise.
“Master Lu, if I am going to set up more than 3 factories for automobile and motorcycle, and my motorcycle factories’ annual production will not be less than 100,000 motorcycles for each factory, my automobile factory’s annual production will not be less than 50,000 cars, will it attract the attention of the higher-ups?”
3 automobile branch factories and the factory in Bing City, the annual automobile production will be 200,000 units. This would surely let the higher-ups pay attention to him. If it was not enough, then Feng Yu can set up 2 more factories. Feng Yu have the money. Now, in China, the annual production of automobiles was not high, and Feng Yu mentioned that he will not only be manufacturing cars, he will also be buying the production line for trucks. China will definitely welcome him.
China had already allowed foreign investment, why they can’t allow the Machinery Company to develop the automobile industry?
This Feng Yu was more powerful than expected. In the future, if Master Lu were assigned to the local government, it would be easy for Feng Yu to make some investment in the region he oversees.
Master Lu was determined to befriend Feng Yu!