Chapter 607 – The frustrated Li Dafu
Feng Yu had wanted to recruit Li Dafu to manage Bing City’s Machinery Company automobile manufacturing division. But at that time, Li Dafu’s sheet metal and other businesses were doing well. He was not willing to give it up and work for Feng Yu.
But when Li Dafu saw the rise of Songjiang Motors, he was shocked. He did not expect Songjiang Motors to be so popular in China and was even exported to Eastern Europe!
Li Dafu also likes cars. He had dreamt of owning his own automobile empire. But currently, China already had several automobile manufacturers like FAW, SAIC, BAIC, GAC, Bing City Machinery Company and some others. Although the scale of these companies still could not be compared to overseas Automobile Companies, it was enough to meet China’s demand. He felt his chances of setting up an automobile company was slim.
Li Dafu had joined the Zhejiang trade union and had plans to gather a group of people there to set up a private automobile company. But the businessmen there do not think highly of his proposal. They felt it was impossible to succeed.
What a joke! You want to start off with manufacturing motorcycles, and when you are familiar with the manufacturing, you will venture into cars?
If this was 2 years early, motorcycles might be a profitable business. But in China now, 5 out of 10 people who want to buy bikes will choose Songjiang motorcycles.
Not only Songjiang motorcycles were beautifully designed, but the performance was also outstanding. The bike was also endorsed by top celebrities, and it was from a reputable brand. How can your company grow if you manufacture bikes? You want to follow those small factories and sell your bikes cheaply?
Even if you could make profits by doing this, how much can you earn? Also, a motorcycle factory might not be big, but it must still be on a particular scale. How many years will it takes for us to recover our investments? When will we see the profits?
Even if it was a success and profitable, will the profits be enough to set up an automobile company? None of us were familiar with this trade. You don’t tell me that a car is just 4 wheels with an engine fitted on it. Many automobile companies also had the same mindset. But the consumers were not buying the cars they manufactured.
In China, there were not only big automobile brands. Some small factories had tried to manufacture their own cars. If the local government did not protect them, they would not even be allowed to sell their vehicles.
These factories’ annual production was only a few hundred to one thousand. But the cars they manufactured were not safe, and the performance sucks!
Other than the locals, who else would buy their cars?
You say they can have better exterior designs? Do they have designers? Songjiang Motors was working with Shanghai most prominent designing firm. Those designers were all elites who had overseas experience. Which other automobile manufacturers in China can achieve that?
If you want to go by a low-cost strategy? Can you be cheaper than Jeep? Jeep and Xiali automobiles were cheap. But were they popular? If the military had not supported Jeep and the government did not purchase Xiali as taxis, do you think these two factories can survive until now?
Li Dafu’s dream of an automobile empire was shattered. None of his friends supported him. He tried getting a loan from banks, but no banks were willing to lend him sufficient funds.
Loans? Banks will also need to see his ability to repay the loans. The banks felt Li Dafu’s proposal was a joke. Why would the bank lend him so much money?
But Li Dafu did not want to give up. He does not lack money. His factory had more than 10 million in profits annually. The money he had could last him his whole life.
But when a man does not lack money, he will start to chase after his dreams. Li Dafu really wanted to drive a car he manufactured himself, and he remembered that Feng Yu had told him to call him if he changed his mind.
So, Li Dafu went to Zhong Qingxian and got Feng Yu’s contacts. He immediately calls Feng Yu.
“Manager Li, are you calling me to tell me that you had made up your mind to join Bing City Machinery Company?” Feng Yu joked.
“To be precise, I only want to join Bing City Machinery Company automobile division. I am not interested in agriculture machinery.” Li Dafu explained.
Feng Yu thought in his heart. We still have not recovered our capital for our automobile venture. The agriculture machinery which you look down upon was still bringing in high profits. The profits were even higher than motorcycles.
“Manager Li, I will be going over to Hangzhou to meet up with Zhong Qingxian soon. How about we have a face to face discussion when I am there?”
Li Mingde was getting older, and Bing City Machinery Company had grown a lot. He was no longer able to keep up with the operations. Although Feng Yu had asked him to groom a group of young executives, it will take at least 5 years for them to be able to assist him. Feng Yu does not dare to let these young graduates take on the role of managers so soon.
No matter how good the grades of these graduates were, they were still inexperienced in managing such a big company. Management was not something that could be learned in schools. It requires experiences.
In Feng Yu’s previous life, Li Dafu had made implemented lots of good strategies and achieved excellent results. Feng Yu was very impressed with him. But he wondered if Li Dafu was still as impressive in this life. This was why Feng Yu wanted to meet with him and hear his views on Songjiang Motors’ future and operations.
……
Zhong Qingxian had planned to inspect his new factories in other provinces, but because Feng Yu was going to Hangzhou, he changed his plans. Lehaha was growing rapidly. The yogurt drinks, tea beverages were selling well, but Lehaha Children’s health supplement had reached a bottleneck. The sales had reached a point where it could not increase further.
After studying the market, Zhong Qingxian felt it was because the market was saturated and Bing City Pharmaceutical Enterprise had affected the sales. Many parents chose to buy Calcium gluconate for their children.
Lehaha Children’s health supplement sales had not increased, but Lehaha revenue was still growing. Their AD calcium milk might be overtaking Lebashi this year. In the tea beverages market, a new competitor appeared. The new competitor was Rising Sun Group.
But Zhong Qingxian did not think of Rising Sun Group as a threat to him. They were just imitators. How could they be stronger than Lehaha? If Rising Sun Group used plastic containers like Lehaha, they would be bankrupt any time.
Even when Rising Sun Group used cans for their drinks, their sales could not affect Lehaha at all. In fact, they were assisting Lehaha to promote tea beverages. This was also one of the reasons why Lehaha did not engage them in a price war to bankrupt them.
This was only a small factory with an investment of only tens of millions. How could they snatch the market share from Lehaha? Rising Sun Group only had a few millions RMB of liquid cash. Lehaha’s investments in this year’s new factory alone were much more than them.
Zhong Qingxian told Feng Yu about his plans for the company, but Feng Yu does not seem interested. It was not because Feng Yu was not interested. He was worried that if Rising Sun Group did not grow like his previous life, will the future be changed?