For General Motors, the world's top manufacturing company that was once glorious for a while, in the past decade or so, General Motors has gradually entered a difficult situation where the hero has come to an end. Since it filed for bankruptcy protection, the entire company has seemed to be sucked away.
As if it had lost its soul, this company was wandering on the edge for a long time.
GM's biggest problem has always been too little innovation, and insufficient market segmentation and compliance. Japanese companies are always the most meticulous and professional in this regard. This is why Toyota can kick GM off the altar.
, he held his head high and entered the world's top hegemonic position.
Whether it is Buick, Chevrolet, Cadillac, or even the extremely niche GMC, Saab, and so many brands under General Motors, no other model can truly gain high sales and reputation in the global market. The reason is simple. Their
The product has long since lost its soul.
GM China has previously launched several confusing mid-range and low-end models, which have achieved good sales through marketing, such as the popular Chevrolet Cruze and the low-end van launched by the Wuling brand. This kind of product is very popular in China.
The market may be regarded as complying with market rules, but if you look at the global market, it is basically difficult to have sufficient competitiveness.
Now, GM China has long been unsustainable, and GM North America has suffered another transoceanic impact from Dongchen. It is not long before total collapse.
And it was precisely because of desperation that Carter decided to adopt the method of obeying the market and the overlord. He no longer stood on the opposite side of Dongchen. Instead, he simply cooperated with Dongchen and became Dongchen's helper in conquering cities and territories in North America. That was the only way.
Only in this way can you earn a certain amount of profit for yourself instead of endless continuous losses.
Since Zhang Wenhao's English was far more fluent than Carter expected, the Chinese and English translations he prepared in advance could not be used. In order to show his sincerity, Carter did not bring any negotiation assistant this time, although he accompanied him
Some company executives also came to China together. But at the negotiation table, he hoped to proceed alone with Zhang Wenhao.
Zhang Wenhao was also very interested in Carter. He did not expect that Dongchen had just entered the North American market. There were local North American companies seeking cooperation, and the cooperation method turned out to be the lowest-end production cooperation: OEM.
OEM companies are soulless zombies forever. No matter how big they are, this is the case. They are just a body, a body that takes orders from others and does things for others. However, there is no such thing as a great company.
Companies that regard OEM as their core business are like Apple. Apple is basically only responsible for the development and design of any of their products, and then leaves the production process to global OEM factories, such as Foxconn.
Foxconn produces more than 90% of the world's Apple mobile phones, but how many people will give a thumbs up to this company? How many companies will praise this company? When people talk about Apple mobile phones, they always talk about it.
Apple will only complain about the processing level of the OEM factory when there is a problem with the device in hand. This is the key to the soul of the company.
From the beginning, Carter said to Zhang Wenhao with a very sincere expression: "Mr. Zhang, Dongchen's current sales volume in the North American market has set a sales record for any foreign brand in the early days of entering North America. This makes me believe that Dongchen
The next step will be longer-term development in the North American market. Although we are both competitors, I have to say: Dongchen Automobile is really a great company, and it has created a new era in the entire automotive field."
Zhang Wenhao smiled humbly and said: "Mr. Carter, you are so grateful. Dongchen is just an ordinary private enterprise that is growing through trial and error. It's just that it has better luck."
Carter smiled slightly and said: "Mr. Zhang, I have never believed that any automobile company can form a monopoly in this industry. However, Dongchen has allowed me to see the possibility of this day coming. Consumers' enthusiasm for Dongchen Automobile
The enthusiasm is too high, beyond everyone's imagination, and in front of Dongchen, all car brands have lost their living space and competitiveness."
As he spoke, Carter said: "We at General Motors once compared Dongchen's models with our own brands. We have our own internal cost-effectiveness evaluation plan. The minimum is 1 and the maximum is 10. The higher the number.
, the higher the price/performance ratio. All GM models have a price/performance ratio of no more than 5, but Dongchen was able to get an average score of 8.9 in this evaluation plan, which is much higher than ours."
"Toyota has always done better than us in this regard. After our evaluation, their price/performance ratio is about 5.7. We have also tried to get closer to Toyota's price/performance ratio. However, due to different concepts and different development directions, we have
Compared with Toyota, what is lacking is not only ideology, but more importantly, the Japanese's persistence and possessiveness towards the world economy. When we think there is no need to develop too many models and waste too much money on R&D and testing,
At that time, the Japanese did not do this. They launched as many models as possible, divided the market levels in extremely detailed and precise ways, and the coverage was also very wide. However, their efforts also received excellent results. When we wake up
When we started trying to segment the market in detail, the Japanese had already taken the lead, but our additional investment dragged our company into trouble and couldn't extricate itself."
Zhang Wenhao asked curiously: "I wonder what your company's cost-effectiveness evaluation plan is like, what kind of process and method it is?"
Kalter explained: "We have a lot of data to measure, such as what proportion of the car's power can be compared to the sales price; compared to the sales price, what can the car's fuel consumption, handling performance, and safety performance be?
What kind of ratio; compare the actual cost of use with the power and fuel consumption of the car; calculate the average cost of use per kilometer or mile based on the subsequent maintenance price of the car, and finally use a complex formula.
When all these results are taken into account, what is obtained is a comprehensive index of cost-effectiveness.”
Zhang Wenhao nodded and said with appreciation: "This is the first time I have heard of this calculation method, but it sounds very reasonable."
Carter nodded and smiled: "Reasonability is carefully studied. At present, except for Dongchen Automobile, the index of the most cost-effective car in the world will not exceed 6.2. Cars of Chinese domestic brands are generally more cost-effective.
But the biggest problem is that brand awareness, brand development and launch capabilities are too low. Therefore, their high cost performance can only be exchanged for a certain market share in the local market. But for an enterprise like Dongchen, if you add brand awareness and
Our brand capabilities and comprehensive competitive index are something that no other company will be able to catch up with within ten years.”
After finishing speaking, Kalter added: "We have evaluated that if we want to achieve a price-performance ratio of 5.5, our profits will drop by at least 60%. If we achieve Toyota's 5.7, then our profits will fall to freezing point.
In other words, not only are we unable to build cars as high-level as Dongchen, but we also do not have the ability to lower the price to a level that is competitive with Dongchen in terms of cost performance, while still maintaining a certain level of profit, unless we replace the low-profile Cruze
Sold for less than 40,000 yuan, otherwise, we will not be able to get a higher cost-effectiveness index. I think, in this case, if we continue to stick to the current situation and fight against Dongchen, we can only do what the Chinese say
Killing a stone with an egg. Therefore, I think if GM cooperates with Dongchen, it will be an opportunity to achieve a win-win situation."
Zhang Wenhao smiled slightly and said: "Dongchen did not expect that the response from the North American market would be so good. This makes our output plan of three to four million vehicles a year seem a bit inadequate in the entire North American market. Moreover, these three or four
One million units is all Dongchen’s current production capacity that can be exported to overseas markets. If we invest all this remaining production capacity in the North American market, then other markets will not be able to take care of it. Therefore, Dongchen also intends to find overseas companies.
Through production cooperation, Dongchen’s total production capacity can be increased to a greater extent.”
Carter smiled and said: "This is great. After all, our General Motors has a maximum annual production capacity of more than 10 million units. For Dongchen, it is definitely the best choice for cooperation."
Zhang Wenhao asked: "Mr. Carter, I wonder how much production capacity General Motors plans to reserve for Dongchen?"
Carter gave a wry smile and said: "Our product line has been squeezed by Dongchen and is on the verge of collapse. In the two largest markets of China and North America, we no longer have the ability to compete. However, Dongchen is still unable to form a
Comprehensive coverage of the world, so we plan to reserve 30% of our production capacity to cover those markets that Dongchen has not yet touched. In other words, we use this 30% of our production capacity to be able to compete before Dongchen comes.
, and make one last profit.”
Zhang Wenhao nodded slightly. What Carter said is correct. Dongchen currently does not have the strength to really squeeze out GM's global market, but GM is a big market. To maintain the operation of this big market, it must ensure that
At least 70% of the production capacity has been effectively utilized and actual benefits have been created. If the production capacity falls below 70% and is affected by idle production capacity, the company may gradually run into trouble. GM currently has part of its production capacity that can be used in other markets.
Make money, but the biggest problem is that the idle capacity is too large, just like a person's limbs are only usable with one arm. It is too difficult to use one arm to drive the entire body, and sooner or later it will collapse, but
If the other parts are handed over to Dongchen, then not only 30% of its own production capacity can be profitable, but also 70% of the production capacity can be profitable if it is cooperated with Dongchen. At the very least, it can keep this big market running.
70% of the production capacity, equivalent to about 7 to 7.5 million vehicles. The economy has rebounded in recent years, and the annual sales volume in the North American market is about 14 million vehicles. If Dongchen cooperates with General Motors, it will be able to deliver to overseas markets every year.
The total number of cars will exceed 10 million, about 11 million, but if all 11 million are sold to the United States, I am afraid the U.S. government will not agree. Therefore, Dongchen currently has three or four expectations for the North American market.
The planned annual output of one million vehicles is already at its peak, but if it cooperates with General Motors, then Dongchen's own production capacity of more than three million vehicles can be recovered and delivered to other markets, and then half of General Motors'
The productivity is used to cover the North American market, and then the other half can be invested in other markets, such as Europe.
Thinking of this, Zhang Wenhao said: "The ratio of 70% is still very reasonable. I have no objection."
Carter breathed a sigh of relief, nodded and smiled: "Then let's talk about the cooperation model and the specific profit sharing."
Zhang Wenhao said with a smile: "Dongchen is not planning to enter into a profit-sharing cooperation model with OEMs. We will determine the local production costs of each model in the United States based on the actual production costs in the United States, and then provide GM with a certain amount of OEM production.
Cost, for example, the manufacturing cost of an S1 in North America is US$10,000, then we will increase the OEM cost to US$11,000, and GM will produce it, and we will pay according to the total OEM price.”
Carter smiled awkwardly, but his heart was full of bitterness.
If it really follows Zhang Wenhao's model, then GM will be reduced to a pure OEM company, not even a joint venture. When GM previously established a joint venture with China Overseas Automobile Industry Group, both parties still invested 50%.
, and then divided the production profits 5:5. Now, Dongchen does not let GM intervene in the profit sharing process at all. It only determines how much processing fees GM can get for processing a car for Dongchen. This...
In this way, is GM still a company that once held a dominant position in the automotive field? It won’t be long before people forget the word GM, because GM produces Dongchen Motors, not GM in the joint venture model.
Dongchen...
Carter was unwilling. Why did GM and other foreign brands enter China through a joint venture model, but when Dongchen entered North America, it used a pure OEM model? It's because the two countries have different market openness levels.
, or is it because the gap between the two brands is really huge?
Damn the US government!
They only know how to comply with the market, environmental protection, energy saving, and low cost. They have never thought of imposing more entry restrictions on Dongchen. Who makes the people in the White House too constrained by ignorant people?
Thinking of this, Carter suddenly remembered something and blurted out: "Mr. Zhang, in fact, Dongchen's massive impact on the U.S. market is something the U.S. government has not considered before. However, Dongchen's entry has suddenly become so fierce.
I think the U.S. government will also take action, right?"
Zhang Wenhao nodded and said: "I have already thought of the actions they will take. Either they will impose restrictions on the import and export links and raise tariffs to force Dongchen to increase prices in the North American market, in order to provide support for its domestic brands.
Striving for survival space; or, the U.S. government forces Dongchen to localize production in North America, otherwise it will limit the number of imports and exports to prevent Dongchen from exporting too much to North America, which will significantly increase the unemployment rate in the North American automobile industry.
"
Carter was stunned and said in surprise: "Have you considered these in advance?"
"Of course." Zhang Wenhao said with a smile: "No government will sit idly by. Like us, they underestimated the recognition of Dongchen among consumers in the North American market. Now they are caught off guard by the huge market reaction.
Time has not made any moves, but it does not mean that they will never make moves. The United States is a free economy. I think the White House’s final option is probably the latter, forcing Dongchen to localize production in North America to ensure domestic tax revenue and domestic employment.
, in the past few years, the unemployment rate is the most fatal word in the eyes of the US government. They can not care about the survival of their own companies, but they must ensure that their unemployment rate does not rise. On the contrary, if Dongchen will one day develop North America into a
The production base that radiates around the world provides a large number of jobs and tax revenue to the US government, and they will be more friendly to Dongchen than to domestic companies."
With that said, Zhang Wenhao added: "I don't want to enter a certain country's market in a purely destructive way. Otherwise, what is waiting for me is likely to be a ban on entry, or many restrictions. Large-scale exports to the North American market are just
In the early stage, local production of a large number of products covering the North American market is the most harmonious way of development. In fact, in addition to retaining s3c and above, c3c and above and sc1 models, Dongchen retains them in China and exports other models abroad.
All models can be produced locally in the region."
Zhang Wenhao has long thought about what kind of restrictions the U.S. government will impose on Dongchen when it comes to its senses in order to stabilize the country's automobile economy. Since such a day will come sooner or later, and GM comes to the door one step ahead, then it
It is better to cooperate with local American companies first to ensure local productivity and employment rate in local industries.
Carter secretly praised in his heart, shook his head and said with a smile: "Unexpectedly, Mr. Zhang has already taken everything into account. Anyway, GM can accept Dongchen's cooperation model, but I hope that the profit margin left to GM will be as large as possible.
At the very least, after we put aside all costs, we can still make a reasonable profit."
Zhang Wenhao nodded and said with a smile: "Of course, the cooperation between Dongchen and GM will be Dongchen's first cooperation with an overseas manufacturer. I hope that this first case can be imitated by other manufacturers instead of being rejected, so
, will definitely leave a reasonable profit margin for GM."
Carter finally felt relieved. He knew very well that there was no room for negotiation between himself and Dongchen. What GM was looking for now was a way to survive, not a path to rapid success. To be able to compete in the global market initiated by Dongchen
Surviving the sexual cannibalization plan is already a great success, and Carter also knows very well that his cooperation with Dongchen is also seeking skin from a tiger. Once Dongchen solves the production capacity problem on his own, GM will immediately be
But before that, it was extremely rare to be able to stabilize the market. He had enough breathing time to slowly transform General Motors in the market.
,please.
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