Chapter 926: Joint venture automobile manufacturing

Chapter 930 – Joint venture automobile manufacturing

“Feng, I heard that we had made money?” Kirilenko appeared in Feng Yu’s office, shouting.

“That’s right. If we settle our Thai Baht future contracts, we will make money. But this is not the right time now, and we still got to wait for a few more days.”

Feng Yu does not need so many funds, and it’s not worth canceling the future contracts now as Thai Baht is still falling. When the other Southeast Asian countries’ currencies are hit, Thai Baht will fall even more. That will be the best time to cancel the contract, and they will get the highest profits.

“It’s alright. I am just asking. Oh, our four factories’ testing is completed, and the new mobile phones have started production. I had let some people test it, and everyone felt it is a good mobile phone!”

This mobile phone will be launch on the 1st of next month, and it will be extremely popular. The external designs and specs are much better than the phones in the market and are priced competitively. With Kirilenko’s friends help, this phone will be selling like hotcakes, and Kirilenko will make quite a sum.

“That’s good to hear. But when the phones are launched, we must watch our competitors closely. Those companies might have phones that are better than ours.”

Feng Yu is from the future and had helped Aiwa from moving in the wrong direction and develop new products.

But Nokia and Motorola are still the giants in the telecommunication industry. They have strong technologies and cannot be overtaken easily within these few years.

Those big companies will always keep their best technologies and their products in the market are normally not their best products. But after the factories in Russia are set up, the Wind and Rain mobile phone will have an advantage because of the lower production costs.

“I know. But if those companies are going to challenge us on sales distribution channels, they will lose! Oh, we have an automobile factory looking for buyers. How about we buy it?”

Songjiang Motors is now a branded product in Russia. Although it is not a luxurious vehicle, it is suitable for the commoners and is durable.

Kirilenko can also acquire that automobile factory by himself, but he felt having a joint venture with Feng Yu to produce Songjiang vehicles can make money easier.

Of course, if Feng Yu is willing to authorize Songjiang Motors’s technologies to Kirilenko, it will not be a problem. But this should be impossible.

Feng Yu looked at Kirilenko. The latter had tasted the benefits of joint ventures, and having a factory in Russia is a good idea. Songjiang Motors vehicles are selling well, and China’s factories are unable to keep up with the demand. It’s time to increase to expand its production.

If Songjiang Motors can set up a factory in Russia, Feng Yu can save on taxes, and he does not need to expand his factories in China. Also, a factory in Russia will make exports to Europe easier.

Last year, Songjiang Motors had become known worldwide, but the popularity quickly dies down, especially in Europe. In Europe, there are many automobile brands, and Songjiang Motors does not have an advantage there.

If the advertising fees are taken into consideration, Songjiang Motors had suffered losses after it was launched in Europe. In the US, it had only broken even.

Some people in Bing City Machinery Company felt they had entered the European market too early, and they should have gone for the low-cost strategy to increase the market share first. But Feng Yu does not agree on this.

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Once Songjiang Motors positioned itself as budget vehicles, this label will be stuck with the brand, and consumers will not accept any increase in pricing when Songjiang Motors produces better vehicles.

But if Songjiang Motors continues to sell their vehicles, they will suffer losses, and if they stop selling, their advertisements will be wasted. Feng Yu has some hesitations and wonder if he had taken a step too far. Maybe he should start from Southeast Asia and enter the European market later.

Now, building a factory in Russia will solve all these problems and increase brand awareness in Europe. Songjiang Motors might gain a foothold in Europe within five years.

Bing City Machinery Company will utilize fewer funds if this is a joint venture. Using the brand name and technologies as capital for the joint venture are formerly used by foreign companies when they get into joint ventures in China. Now, it’s China’s turn!

“Sure. I will give Li Mingde a call and ask him to come over for a discussion.”

“Feng, automobile manufacturing is considered a heavy industry, and we can’t let you all own a higher percentage of shares. I will increase my capital for additional shares.” Kirilenko said.

Russia’s heavy industry is one of the best in the world, but they focus too much on the military. Their automobile industry was strong, but China had overtaken them.

Even when this is the situation in Russia, they still do not allow other countries to own controlling shares of heavy industry factories there. Without Kirilenko’s help, it will be hard for Feng Yu to set up this factory in Russia.

“How many shares can we get? Money is not a problem for me, and our technology and brand are worth a lot too.”

If the proportion given to Feng Yu is too low, he will not agree. Even if Feng Yu agrees to Kirilenko’s proposal, the management of Bing City Machinery Company will also object. Feng Yu might be the major shareholder, but he can’t decide on everything.

“If you all are willing to provide us with the manufacturing technologies and brand, I can give you all 20% of the shares. If you all want more shares, you all must use some cash. However, I cannot give you all more than 49% shares of the factory.”

Kirilenko is telling Feng Yu that he must have the controlling shares of the factory. Feng Yu is not sure if the valuation on the technologies and brand is right, as he still has not seen the new factory.

“Let’s wait until Li Mingde comes over. You can have the controlling share of the factory, but the brand cannot be changed. It must be Songjiang!” Feng Yu said.

“Of course. I will also not accept a new brand.” Having a new brand will mean they have to market it all over again and need at least one to two years to create brand awareness.

“Ok. We can discuss the details later. Have you fix a wedding date for your wedding?” Feng Yu asked.

Kirilenko’s arranged managed marriage should be nearing.

“It should be in December, but we have not decided on the exact date. I will let you know once it is confirmed.”

“Congratulations. You are going to have a family.”

Kirilenko gave a wryly smile.

“When are you going to get married? My advice to you is not to get married too early.”

Feng Yu rolled his eyes and did not say anything.

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