Chapter 446, 447 and 448 – Buying hen and selling eggs
All the employees of the Automobile branch factories, including Li Mingde and Zhang Ruiqiang, were excited when they heard that there will be a big boss from Russia visiting the factory. This big boss will place a significant order if he is satisfied with the cars.
Zhang Ruiqiang was invited by Li Mingde to represent the City to meet this Russian boss. This can also be considered the City’s support of the Machinery Company.
When Feng Yu and Kirilenko arrived at the automobile factory, Kirilenko’s men had already reached. The streets leading to the factory were lined with banners written in Russian, welcoming Kirilenko.
Kirilenko saw the banners and was very excited. The Chinese were too passionate. Were all these arranged by Feng Yu? The next time when Feng Yu goes to Moscow, I must welcome him this way. I cannot let him think that we, Russians, are not as welcoming as the Chinese.
Actually, these banners were arranged by Li Mingde. In the past, when the Machinery Company was still a state-owned enterprise, they would also do the same thing whenever any big businessman visits. Of course, those “big businessman” and their “huge” orders amounted only about 1 million RMB worth of agriculture machinery. Now, even a 10 million RMB deal will not get this treatment.
“Mayor Zhang, Old Li, this is the businessman from Russia. Mr. Kirilenko. Brother Ki, this is our Bing City’s Mayor Mr. Zhang Ruiqiang, and this is our Machinery Company’s General Manager, Mr. Li Mingde.” Feng Yu introduced both parties.
Zhang Ruiiqiang warmly shook Kirilenko’s hands and even greeted him in Russian. Kirilenko shook his hands for only a second. If it wasn’t for Feng Yu introducing this person, he was not interested to know him. In Russia, the number of top regional officials who had dined with him was more than double digits. He was not interested to know some City’s mayor! (Russia’s regional top official was equivalent to China’s Provincial Governor.)
But Kirilenko shook Li Mingde’s hand longer. He had met Li Mingde twice before. Li Mingde was puzzled. This Russian does not know who had more authority? He was reluctant to shake the Mayor’s hand and greeted Li Mingde so warmly?
Kirilenko had visited the Machinery Company before, and Li Mingde had also met him previously. But to Li Mingde, all Caucasians look the same. He was still thinking in his heart, why was there so many Russians named Kirilenko? Was this their surname?
Kirilenko’s were glued to the vehicles the moment he stepped into the factory. These were Volga’s cars?
I knew Feng Yu was exaggerating. How could he produce any good cars? These cars were the exact replica of Volga’s cars. Kirilenko turned and look at Feng Yu.
Li Mingde immediately explained: “These Volga’s cars were manufactured using the technologies we got from the former Soviet Union. We will be using this car for comparisons later.”
After hearing the explanation from his translator, Kirilenko looked at Li Mingde in doubt. Using Volga’s car for comparison? That means you have successfully built better cars than the Volga?
So what? Kirilenko had also admitted that Russia, including the former Soviet Union, does not have any good cars. Many of the Russian politicians also prefer to sit in England cars. Those cars were much better than Volga’s cars. Moreover, you had built this Volga’s car using the old technology. The current Volga’s models were much better than this car.
Also, this Volga car you had assembled might even be worse than Volga’s older model. It was never easy to develop new automobile technologies.
“Manager Li, can I let my men test drive this vehicle?”
“Of course. No problem. This car had been tested by our engineer hired from Petersburg. He said that the quality of this car can be compared to the best Volga’s model in Russia.”
Li Mingde pointed to a big sized man with a thick beard. This mechanical engineer was hired by the Machinery Company from the former Soviet Union.
Kirilenko frowned. He had forgotten Feng Yu had hired some engineers from the Soviet Union previously. That means this Volga’s car should not have any problems.
But Kirilenko still asked his own mechanical engineer to inspect the car. Feng Yu had invited him over for business. What if there were problems with the quality of these products? He would make a loss if he were to place orders for defective goods. Feng Yu also do not know much about Russia’s automobile market. His judgment might also not be so accurate.
The engineer opened the bonnet to take a look. Then he climbed under the car to check the undercarriage. After that, he entered the vehicle to inspect the interior. He made a thorough inspection of the vehicle.
While the engineer was inspecting the vehicle, Li Mingde was telling Kirilenko about the factory. He was telling Kirilenko things like how big this factory was, the number of workers and professional engineers, the initial investments, the yearly production, etc. Li Mingde had a flair for telling others about the company’s history and past achievements. But he was unable to showcase this skill as the Machinery Company’s automobile factory was very new.
When Li Mingde starts to explain about the Songjiang Motors’ vehicles with a colored brochure, Kirilenko’s engineer had finish inspecting that Volga’s car.
“This car’s performance is outstanding. This is definitely a new car and had used our Volga’s technologies. The technologies used are about our standards ten years ago. The performance of this car only loses to the current Volga’s models slightly.”
Kirilenko nodded and turned to Feng Yu. Heard that? This car is about our standards 10 years ago and not as good as our Volga’s cars now. What can you prove by using this car to compare?
Feng Yu also knew about this. But Volga’s technological upgrades was the slowest among the major automobile manufacturers. It could not even be compared to China. The Volga’s newest models of cars were not much better than 10 years ago.
Later when Kirilenko saw the Songjiang Motors vehicles, he will have nothing to say.
Kirilenko had also noticed that the exterior design of Songjiang Motors vehicles was gorgeous. All 3 types of cars had captured his attention.
The Olympic model looked grand and was suitable for businessmen and families. The Off-road model looks rugged and domineering. The Red Star model looks like a van but does not have a bulky feel.
Overall, Kirilenko likes the designs of all three models. But no matter how beautiful the exterior designs were, it was the performance of the vehicles that matters the most. Cars were for driving and not for display. If he really wants to compare the exterior designs, he still thinks his sports cars in his garage were more beautiful.
But not everybody could afford to own a sports car. These cars which cost tens of thousands USD were still the automobile mainstream. These were also Russian consumer’s preferred vehicles.
Kirilenko passed the brochure to his engineer for him to give his professional opinions.
The engineer saw the pictures of the cars and was captivated by the beautiful designs. This is an SUV? The width seems to be quite wide. The interior must be very spacious. The angle of the front portion of this car should be able to lower the air resistance, and the whole body was sleek. It was really stunning.
That’s for sure. This Songjiang Off-road designed was based on Audi Q7 from the future. After Liu Michael’s numerous modifications, it looks different from Q7, but it still seems better than Jeep and Cherokee.
Kirilenko waited for a while and saw his engineer not saying a word. What was this guy doing? Why was he keeping quiet after looking at the brochures for so long?
Kirilenko coughed, and the engineer jumped. He was too engrossed with the brochures.
The engineer immediately flips to the last few pages of the brochures, where it states the specifications of the vehicles. The engineer’s jaw dropped with he saw the specs.
How can this be possible? This is impossible!
China’s cars can have such technologies? These technologies were not only ahead of Russia. These technologies were ahead of Russia by at least 10 years. The vehicles’ performance can be compared to European cars!
Li Mingde was feeling proud when he saw the shocked expression on the engineer’s face. When he knew about the specs of Machinery Company’s vehicles, he was also shocked like this engineer.
Li Mingde had thought their vehicles would catch up with Santana at most after they had combined the technologies bought by Feng Yu. He never expects that after adding the Motor Factory’s engine, turbocharge technology, suspensions, etc., their vehicles would reach such high standards!
Although the overall performance still could not be compared to European and Japanese cars, their cars were the best in China!
When Li Mingde looked at the manufacturing cost, he was alarmed. The cost was about the same as those joint-partnership cars, but the performances were much better.
At that moment, Li Mingde believed what Feng Yu had said in the past. We will build China’s best cars, and our goal in the future will be producing the best cars in the world!
Li Mingde had never thought that the goal of building China’s best cars could be achieved so easily. Also, the cost of their factories, compared to First Automobile Works (FAW) and Shanghai Automotive Industry Corporation (SAIC), were much cheaper. The production lines bought from the former Soviet Union were considered a steal when compared to FAW’s production lines.
Although the production lines bought from the former Soviet Union were old, FAW’s production lines were also old models. There was not much difference between both production lines. The production lines from the former Soviet Union were noisy and had many other flaws, but they were durable.
Li Mingde was very impressed with Feng Yu’s guts and foresight.
He now firmly believes what Feng Yu had said in the past. More than 50,000 Songjiang Motors vehicles will be sold annually within 3 years.
The sales of their vehicles were not doing well now, but it was because they had not started any large-scale marketing campaigns yet. When the commercials were aired after the Lunar New Year, the sales will definitely pick up. Furthermore, Tai Hua Trading’s selling capabilities were one of the best in China.
Also, CCTV had already purchased Songjiang Motors vehicles. This means that the market was willing to recognize their cars!
“Mr. Kirilenko, these specifications had been proven, and we can let your men test it. Our factory has all these models now, and they are all mass produced. This factory is only manufacturing the 3 versions of the Olympic model. The other two models are manufactured by our factory in Jinling. If you have the time, I can bring you there for a visit.” Li Mingde said with a proud look on his face.
Kirilenko looked at his engineer, and his engineer said: “Sir, these specifications are among the best in the world. If these figures are real, then these cars are way ahead of Volga’s latest models!”
What? Way ahead of Volga’s latest models?
“You sure?”
“I must test the cars first to be sure.” The engineer replied seriously.
Kirilenko nodded. Li Mingde waved his hand, and his staff brought the Russian engineer to test drive the vehicles.
Feng Yu smilingly looked at Kirilenko: “Brother Ki, how is it? Do you like the interior and exterior designs of my cars? Do you think that these cars will be popular in your country?”
“How are these cars selling in your country?” Kirilenko asked Feng Yu back.
Feng Yu casually replied: “A few days ago, CCTV, our national TV station, had purchased a batch of our cars. Mayor Zhang here can prove that I am not lying to you.”
Zhang Ruiqiang stared at Feng Yu. This rascal was quoting out of context again. CCTV had indeed placed an order, but CCTV was the only one who had placed any orders. Other than CCTV, Feng Yu had not sold a single car yet.
But Zhang Ruiqiang chooses to support Feng Yu as the other party was a Russian.
“That’s right. CCTV is the voice of our government. This TV station has a high status in China. They have indeed ordered a batch of Songjiang Motors vehicles. They had wanted to purchase German’s Audi and Santana. But they realized Songjiang Motors vehicles are better and have better specifications. That’s why they changed their mind.”
Li Mingde added: “We have already delivered CCTV’s cars to them. You do not need to worry about our production not keeping up.”
But one of Kirilenko’s men suddenly asked: “Can I ask Mayor Zhang, is Bing City’s Government buying Songjiang Motors vehicles too?”
Zhang Ruiqiang was stunned. Why was this question suddenly thrown to him? His faced changed. He understood what that Russian wanted to know. Since you claim this Songjiang Motors vehicles are so good, then why is Bing City’s government not purchasing these figures?
“We are still discussing the purchasing contract. As we will be purchasing in large numbers, we need to get approval from the Provincial government. That’s why we still cannot finalize the contract yet.” Zhang Ruiqiang explained after thinking for a while.
Kirilenko frowned: “Mayor Zhang, why do you still need to consult the Provincial Government over such a trivial matter? I did not see your car when I come. Can you tell me what car you are using now?”
Zhang Ruiqiang looked at Feng Yu, and Feng Yu shrugged his shoulders. Why are you looking at me for? Answer him yourself.
“My car is an old car, Audi 100. We are planning to change our cars. Personally, I prefer the Songjiang Motors Olympic model. It looks grand and suits government officials.” Zhang Ruiqiang gritted his teeth and said.
Zhang Ruiqiang was regretting. He should return back to his office after he met Kirilenko. He can just show up again when Kirilenko was about to sign the contract.
Now, Zhang Ruiqiang had no choice. He can’t tell Kirilenko that he does not want to purchase Songjiang Motors vehicles. This was the Machinery Company to export their vehicles. He can’t mess up this deal.
Wait, Li Mingde had told the City that there will be a businessman from Russia visiting the Machinery Company and they will be discussing about his purchase. Was this on purpose? If this was not on purpose, why would Li Mingde ask him to be present to show his support for the Machinery Company?
Zhang Ruiqiang gave Feng Yu a stare. He felt he had been tricked by Feng Yu!
Feng Yu had an innocent look. He also did not expect Kirilenko’s man to ask this question. He was innocent.
But now, Zhang Ruiqiang could not stop the City Government from purchasing Songjiang Motors vehicles. Li Mingde had tried to persuade the City to buy these vehicles but were stopped by Zhang Ruiqiang. Zhang Ruiqiang had set an example by traveling in the former Mayor’s Audi 100. How could his subordinates still dare to suggest changing their vehicles for better ones?
If the City Government changed their vehicles, then the counties and agencies will find all sort of excuses to replace their current fleet. Bing City’s finances were still doing well these few years.
Kirilenko looked at Zhang Ruiqiang: “How many Songjiang Motors vehicles does Bing City wants to purchase and which model?”
Zhang Ruiqiang was cursing in his heart. Why are you keep focusing on me? Seems like he cannot just purchase a few cars to fool Kirilenko. Does this mean that the City will have to buy a batch of vehicles?
“Ermm…… we are still considering about the models. But the total number of vehicles should not be less than 100 units!” Zhang Ruiqiang replied.
He was afraid that if the number of vehicles was too little, Kirilenko would have doubts. As for how many cars will be purchased in the end can be discussed later.
Kirilenko still wanted to ask more questions, but Zhang Ruiqiang glanced at Li Mingde, and Li Mingde immediately changed the topic.
“Mr. Kirilenko, if these cars are as good as what was written on the brochures, will you be interested in ordering a batch?”
“I am interested of course. But there are still many factors like prices and some other conditions to consider.” Kirilenko smiled and answered.
Feng Yu gave Li Mingde a look, and Li Mingde did not carry on asking. Feng Yu can negotiate the prices with Kirilenko himself. After all, Feng Yu was more familiar with Russia than them.
“Brother Ki, the cheapest version of our Olympic model, is also equipped with airbags. The cost is more than 20,000 USD. The cost for this mid-range version is almost 40,000 USD. The top tier model’s cost is 60,000 USD. The cost for both diesel and petrol versions of this Off-road SUV model is about the same. About 40,000 USD. Finally, this Red Star model is about 60,000 USD. How many do you want? I can give you some discounts.”
Kirilenko looked at Feng Yu. The cost of these cars was so high? Then if Feng Yu were to add in the profits and the transportation charges to Moscow, there would not be any profits left.
“Feng, the prices for your cars is a bit high. If I want to sell your cars, I will not have any profits.” Kirilenko was not happy. Didn’t you promise that I will be able to make lots of money?
Feng Yu also knows that prices he gave were slightly higher. Those were not the cost of the vehicles. Those were the retail prices in China.
“Brother Ki, look. We are selling these cars to Russia, and we need to pay the exportation taxes. The taxes are included in the price.”
Currently, China’s exportation tax was very low for vehicles. Not only vehicles, but the rest of the products were also the same. China was encouraging exportation. To earn foreign currency, China had used all ways and means. Some items that were lacking in China were also exported and then imported again. This was turning exports into domestic sales. This way, China would be able to get foreign currencies.
“I also need to pay importation taxes, and our taxes are quite high too. These are not those small tickets items.” Kirilenko winked at Feng Yu.
Kirilenko had never paid any taxes for his commodities trade all this while. Anyway, all his goods were in the military train carriages. When the train reaches Russia, there will be no one checking. When the products reach Moscow, no one dares to interfere with his business due to his father.
But vehicles were different. There was no way to hide. If he were to import these vehicles into Russia without paying any taxes, there would be some impact on his father’s reputation.
“How about this, Brother Ki? Our production had not started completely. That’s why our cost is a bit higher. I will speak to the leaders and see if we can get some government policies to lower the taxes. This way, the cost of each car can be lowered by about 1,000 USD. With these new prices, I think you will surely have more profits.”
Damn, England imported cars used by the Russian officials were more expensive. If Kirilenko was able to make use of his connections and background properly, he should get at least a few thousand USD of profits for each car. If he could sell 1,000 cars, his earnings will be at least a few million USD. This was not a small sum and was much higher than his monthly commodities trade.
Of course, this was only if Kirilenko was able to sell so many vehicles.
Zhang Ruiqiang looked at Feng Yu and said: “Hmmm… We can discuss this later.”
Of course, this was only lip service. Zhang Ruiqiang will never agree to waive off the taxes. Feng Yu had made so much money. What’s wrong with him paying the country and the City some taxes?
Kirilenko was still thinking about this deal when his engineer returned. The engineer was very excited and kept nodding to Kirilenko.
“Sir, there are no problems with the cars’ performances. Their cars and engines are much better than the Volga. The suspension, anti-collision, and other safety features were much better than Volga cars. Overall, these cars are excellent.”
The engineer had wanted to say the overall performance of these cars were almost perfect. But he did not want to say it in front of all the Chinese.
“Brother Ki, why are you hesitating? The performance is much better than your country’s Volga and is about the same as those English cars. The prices are also much lower. Not only individuals will buy. Have you ever considered if your government will make a bulk purchase?” Feng Yu raised one eyebrow.
That’s right. Why didn’t I think of this earlier? If I could sell these cars to the local governments, it will be much easier. I can also place an order with Feng Yu after I receive orders from the local governments. This way, I do not have to use any of my capital.
“Feng, after you have spoken to your government, give me the final price list.” Kirilenko said after a short pause.
“No problem. The price I am giving you will surely let you make lots of profits.” Feng Yu was overjoyed. Seems like Kirilenko was interested. He knew that Kirilenko would be interested if the profits were high enough.
The deal this time was considered a win-win situation for both parties. Feng Yu believed that Kirilenko could sell off this batch of vehicles at high prices to the corrupted Russian governments easily. Even if the rates offered to Kirilenko remained the same, Kirilenko would still have high profits.
Now, Feng Yu had offered to lower the prices slightly, that means Kirilenko’s profits will increase further. His profits might even be higher than the Machinery Company.
Zhang Ruiqiang looked at Feng Yu in a daze. Did this kid plan to sell these vehicles to Russia from the start? No wonder he dares to guarantee that the sales will exceed 50,000 units within 3 years.
Now it seems that Feng Yu does not even need 3 years.
Zhang Ruiqiang was puzzled. Russia had inherited most of the Soviet Union’s assets. Why did their automobile industry decline to such state? Even if the former Soviet Union’s industrial developments were in the wrong direction, but Russia now should also be considered a powerful industrial country.
This Russian had agreed to import a batch of vehicles from the Machinery Company!
This Russian should be the one who had been selling the former Soviet Union industrial equipment to Feng Yu. That means he should also know that this factory’s production lines were second-hand production lines from the former Soviet Union. Why was he still willing to buy the Machinery Company’s vehicles?
Could it be that these vehicles were really as good as what Feng Yu claims?
Feng Yu had bought second-hand equipment from the former Soviet Union previously and then manufactured vehicles from those equipment. The cars produced were then sold back to Russia. Was this considered buying a hen and then selling eggs back to the seller?
Li Mingde immediately asked his men to prepare lunch at the factory’s canteen.
Kirilenko’s eyes widened and said something in a weird accent: “Xiao Chi?” (Xiao Chi refers to street food or snacks in Chinese)
Li Mingde looked at the translator confused. The translator was also staring at Kirilenko blankly. The translator had not heard of such Russian word before.
Feng Yu helplessly said: “He wants to eat street food. Tell the canteen to prepare some local snacks. Oh, prepare a carton of Bing City’s strongest Baijiu!”
Feng Yu was screaming in his heart. Die Kirilenko! This afternoon, we have so many people. You will be drunk for sure!