Rebirth 99 to become a car giant.

Chapter 975: The express kitchen knife is rolled up like this?

The emergence of NS9155 can be said to have intensified the internal competition among China's new energy vehicles.

Just after Qiantu Motors officially announced that it would be the first automaker to equip its cars with the NS9155 chip, other automakers such as Future Motors also announced that one of their cars would be equipped with the NS9155.

For a while, the popularity of NS9155 was off the charts.

Even some people who know nothing about chips have more or less heard something about them.

And for China's automobile industry, this volume is just the beginning.

Because the market share of domestic brands has risen to a relatively high level.

Whether it is Nanshan Hongqi or Changan Automobile, or other car companies such as Chery, Geely, Great Wall and BYD, they all hope to achieve a sales leap in 2015.

For the sales department of a car company, the simplest and most brutal way to increase sales is to lower prices.

As long as the price is reduced low enough, sales will definitely increase.

However, this has greatly increased the competitive pressure in the entire industry.

In particular, the cost pressure on the purchasing departments of various automobile companies is higher than in previous years.

"Mr. Liu, our sales department received a courier this morning. The contents are very special."

At Bosch, Sales Manager Ren Cai came into the office of Sales Director Liu Zhenbo with a strange look on his face, and placed a package in front of him.

Although Liu Zhenbo and Ren Cai are old partners, they have a very good relationship.

However, this kind of thing of directly bringing a courier over has never happened before.

Liu Zhenbo opened the express box out of curiosity, but was suddenly shocked!

His first reaction was to think about whether he had offended anyone recently.

"Mr. Liu, here is a kitchen knife and a special price reduction contact letter. It was sent to us by Geely's purchasing courier."

"They asked us for a special 10% price reduction, but we said we could only reduce the price by 1%."

Ren Cai noticed Liu Zhenbo's shock and quickly explained what was going on.

It would be bad if this caused any misunderstanding.

"A 10% price reduction is not something we can do, but it is something that any mainstream parts manufacturer cannot do, right?"

Liu Zhenbo's face darkened and he picked up the kitchen knife from the box speechlessly.

It’s not light in weight, it really is a real kitchen knife!
This isn't the way you bargain, is it?

Although it is known that the Chinese automobile market is becoming more and more competitive, the competitive environment faced by Bosch is also becoming increasingly harsh.

In particular, Bosch's main customers before were various joint venture car companies such as Volkswagen, Mercedes-Benz and BMW. Now the sales of China's own brands are increasing rapidly.

This is also an important reason why Bosch's life has become more difficult.

Although Bosch has some market share in the independent brand market, it is certainly not as good as Nanshan Auto Parts.

"Yes, I have communicated with the other party many times before."

"If we follow this price reduction, we will lose money."

"But they said our profits last year were higher than theirs, so we have room to lower prices."

"The two sides have been unable to reach a common opinion, and then this express delivery happened."

Ren Cai was also a little speechless after explaining.

Although some car companies have announced very high price reduction targets in previous years, there are even customers who have targets higher than 10%.

However, the final result of the negotiation is often just a slight price reduction, which is far from the target.

In the middle, the two sides are mostly arguing with each other, and the other party’s high goals are also a means of wrangling.

It was totally unexpected that a kitchen knife would be delivered by express like what happened today.

"Let alone a kitchen knife, even if they deliver an axe, we won't be able to lower the price."

"Of course, we shouldn't be so blunt and refuse directly."

"Didn't you agree to a 1% price reduction before? Then just reply with 1.5% now."

"Anyway, according to the budget we made before the New Year, we will only reduce their prices by 2% this year. Now we will release another 0.5%, which can be regarded as a way for them to step down."

"If they have the guts, they can also ask Nanshan Auto Parts to reduce the price by 10%."

Liu Zhenbo gave his own solution speechlessly.

He also wanted to overturn the table, but he knew that if he did so in the Chinese market, the end result would be a lose-lose situation for both sides.

Even some other customers may be more wary of Bosch.

This will definitely be very detrimental to their future development.

……

"Mr. Yu, I just heard that Geely Automobile mailed a kitchen knife and a price reduction letter to Bosch, hoping that the other party can cooperate to reduce the price by 10% this year."

"I think we can organize a special topic around this topic. I think many people in the industry will be very interested."

He Ling has been at Autohome for so many years that she has acquaintances in every OEM and has very good relationships with many leading auto parts giants.

Therefore, she was able to learn a lot of news in the industry in advance.

For example, the matter with Bosch this time was revealed to her by the other party's sales manager.

Then He Ling asked someone from Geely, and the other party confirmed the authenticity of the news.

In this case, this topic is naturally worth discussing.

Those who work in the news industry need to highlight the "new" and the "strange".

This matter should still be a hot topic considering that China's automobile industry has ranked first in global sales for many years in a row.

"The market competition is so fierce this year that it seems to have affected parts suppliers."

As the general manager of Autohome, Yu Yu is naturally very clear about the changes in China's automobile industry in recent years.

Especially in the past two years, with the increase in the market share of domestic brands and the sales of some domestic brands beginning to stagnate or even decline, competition in the industry has become more intense.

The most direct reaction is that after consumers go to 4S stores, they find that the discounts for various models have increased.

Some car models that previously required a surcharge now have discounts.

This change can be said to be very fast.

For example, Toyota's Highlander used to have no discounts, but now there are discounts of more than 10,000 yuan per vehicle.

In this case, it is inevitable that the cost pressure on the OEM side will increase.

After all, the extra price reductions given to consumers are taken from other people’s profits.

"Yes, even foreign auto parts giants like Bosch have already felt such great cost pressure, so other auto parts manufacturers are naturally even more so."

"These OEMs have generally been accustomed to bullying the weak and fearing the strong in the past, and eventually chose to give up on some manufacturers that they couldn't handle."

"But this year they are so tough, which shows that the pressure is really great."

Yu Yu naturally agreed with He Ling's statement.

After all, the process between OEMs and suppliers is a game of bargaining.

Overall, the OEMs have definitely taken the initiative.

But when it comes to some specific parts and some manufacturers, the situation is naturally different.

In the past, this classification was relatively clear, and the OEMs had a good idea of ​​which manufacturers could be exploited and which ones could not be dealt with.

But now the distinction is starting to blur.

All suppliers have to consider lowering prices, otherwise they will not be able to cope with market competition.

"Although Bosch has a great influence in the global auto parts industry, in China, Nanshan Auto Parts is the largest auto parts company."

"Nanshan Automobile Group is the largest automobile group in China. In this case, the topic we want to discuss will have an impact on Xingchen Automobile, Jaguar Land Rover and Future Automobile, as well as Nanshan automobile parts, Nanshan engines and Nanshan gearboxes."

"So we need to have a good discussion with them about whether we should do this topic, whether we can do it, and how to do it, so as not to shoot ourselves in the foot."

I have to say that Yu Yu's position is still relatively high.

Autohome is the largest professional automotive media in China, and is also a member company of the Nanshan Group.

When doing something, we must definitely consider the interests of the group’s sister companies.

Otherwise, if Autohome gets part of the benefits while its sister companies suffer greater losses, it will be meaningless.

Yu Yu knew that Cao Yang definitely didn't want to see such a situation.

"Well, I will talk to several companies such as Nanshan Auto Parts and listen to their ideas."

He Ling could naturally understand her boss's concerns, so she immediately prepared to communicate.

Otherwise, if too much time is wasted, once the news spreads, it is likely that other websites will get there first.

After all, other websites don’t have so many concerns.

……

"Minister Song, Geely Auto has already forced its suppliers to the point of mailing kitchen knives. Should our purchasing department also raise the price reduction target this year?"

Chery Automobile and Geely Automobile are both located in the Yangtze River Delta region and are well-informed of each other's information.

After Yin Chuan heard that Geely Automobile had mailed kitchen knives and price reduction letters to Bosch and other manufacturers, he immediately called over the purchasing director Song Xianming.

There is no CEO who does not want the company's costs to continue to decrease.

Especially in the current harsh competitive environment, Chery Automobile's sales have declined to a certain extent.

It can be said that Yin Chuan is under a lot of pressure.

"Mr. Yin, among the goals we announced to suppliers this year, we hope that everyone can come up with a 20% price reduction plan."

"Although not all of these price reduction plans can be implemented this year, at least we have made the direction clear first, and then our R&D and procurement departments will work with suppliers to discuss specific cost reduction plans."

"It is difficult to achieve a 10% level simply by reducing prices."

When Song Xianming heard that a sister company had mailed kitchen knives to Bosch, he thought that Yin Chuan would mention this topic to him sooner or later. Fortunately, their purchasing department had already done relevant promotion work, so they were not afraid of Yin Chuan's inquiries.

"Geely Auto's situation is similar to ours, and its sales have also begun to decline in the past two years."

"So everyone must find ways to improve their competitiveness."

"In addition to designing and developing more competitive products, it is also very important to reduce the price of existing mass-produced models."

"Some of our models are actually already selling at a loss when they are sold at the terminal, which is not a long-term solution."

Yin Chuan would definitely find a way to put pressure on Song Xianming.

Price reduction is an eternal topic for car companies.

If we don't put enough pressure on the purchasing department, no one will know the limit of price reduction.

So sometimes, even if he knows that the goal is not very reasonable, Yin Chuan will still push forward.

"This is indeed a problem. I have arranged to visit Nanshan Auto Parts, Nanshan Transmissions and Nanshan Engines next week to discuss with them about the price reduction this year."

"Although the number of our own engines is increasing, the proportion of Nanshan-affiliated companies in our supply system is still very high."

"If the other party doesn't lower the price, it will be impossible for us to achieve our high price reduction target."

At this time, Song Xianming must have to shift the blame and find a few suppliers to share the pressure with him.

Otherwise, wouldn't the pressure be on his shoulders?

"The price reduction of parts from Nanshan-based manufacturers is indeed a very important topic."

"I have discussed this topic with Mr. Cao before, but he only promised to reduce the price of Chery Automobile by no less than that of other manufacturers."

"So if we compare purely from the perspective of industry competitiveness, the price cuts by Nanshan-based companies will not drag down our competitiveness."

"After all, if their price cuts this year are only 3%, then other OEMs will also have the same ratio. Ultimately, our advantages will still be reflected in the price cuts of other manufacturers."

Yin Chuan knew that the Nanshan-affiliated companies might consider cooperating with a price reduction of a few percentage points, but a price reduction of 10% or 20% was simply impossible.

At worst, they will stop supplying it.

It is really difficult to find a person who is better than others in all aspects of QCD.

"Well, with this bottom line in place, our situation shouldn't be so passive."

"However, competition in the auto parts industry has been very fierce in recent years. The profit margins of most manufacturers are relatively limited, and there is also limited room for exploitation."

At this time, Song Xianming must have explained some difficult problems to Yin Chuan from the supplier's perspective.

Otherwise, they will feel very uncomfortable when they fail to achieve their goals.

In response, Yin Chuan simply said that he knew it.

Everyone has difficulties, but no matter how difficult it is, the work must continue.

……

"Mr. Cao, there is a lot of discussion online about the annual price cuts between automakers and suppliers."

"Whether it's Autohome, Bitauto, or NetEase Auto Channel, there are all kinds of related reports."

"I have also preliminarily sorted out the price reduction requirements and actual implementation status of various OEMs this year."

As the general manager of Nanshan Auto Parts, Dai Hanbiao has business dealings with basically all domestic OEMs, the only difference is the amount of business.

Therefore, Nanshan Auto Parts is aware of each OEM’s annual price reduction requirements and their final implementation status.

Especially the requirements issued, which are the easiest to grasp.

Their own actual price reductions are also clear at a glance.

"Several car company CEOs have called me directly, but it is impossible for us to reduce prices by 10%."

"The purchasing departments of various OEMs are under a lot of pressure, and I understand that."

"For this situation, we can try another way to reduce the price."

Cao Yang will not simply put pressure on his subordinates. In most cases, he will discuss the issue from the perspective of problem solving.

Therefore, the working atmosphere of the entire Nanshan Group of companies is relatively relaxed.

"Another way to lower the price?"

Dai Hanbiao looked at Cao Yang with anticipation.

As long as the boss can come up with some better solutions, he won’t be under so much pressure when facing various OEMs.

"Yes, in the past, our parts prices were generally reduced by 1% to 3% each year, but now the requirements of various OEMs are often double-digit."

“Although the actual results were not that high in the end, it at least sounds scary.”

"This year we communicated with our customers and expressed our willingness to provide greater cooperation."

"In previous years, we reduced prices by 2%, but this year we can reduce prices by 4%. However, the prices of our parts will not be reduced. Instead, we will compensate customers with the 4% of sales at the end of the year."

After Cao Yang said this, Dai Hanbiao immediately understood.

Similar solutions have actually been used in the past, but they were not used so widely.

If the price of parts drops, it will not only affect the current year's sales, but also future sales.

However, if some discount compensation is provided at the end of the year, it will only affect that year.

In this case, a 1% price reduction on a part may have a greater impact than a 2% year-end rebate.

"This is a solution. At least this year, the OEMs will be able to report better, and the data won't be so bad."

Dai Hanbiao could naturally understand the impact of this plan.

With this plan, it seems that Nanshan Auto Parts will suffer a little loss this year, but looking at the entire cycle, Nanshan Auto Parts is actually the one that gets the upper hand.

Of course, the client must also be aware of this situation.

It just depends on whether people choose to get through this year's difficulties first.

"Yes, and when you communicate with customers, you can also use some words to tell them that no matter how much we reduce the price, we will treat all customers equally."

"Even if the price is reduced to zero, it will not affect the competitiveness of their products in the market."

"After all, if the price reduction is zero, we will reduce the price to zero for all our customers."

In any case, Cao Yang will definitely not allow Nanshan Auto Parts to significantly reduce prices to cope with the current market competition.

Cao Yang has no objection to each independent brand opening its own exam paper.

But the result of opening the book is to sacrifice the interests of Nanshan Auto Parts, which is unacceptable.

Cao Yang has always been promoting that Nanshan Auto Parts relies on technology to win orders, rather than simply competing on price.

Of course, the products produced by Nanshan Auto Parts will not be more expensive than those of its international counterparts.

……

"Mr. Zhu, I see that the topic of price reduction of auto parts has been hotly discussed in the industry recently."

"Whether it is foreign auto parts giants such as China or domestic giants such as Nanshan Auto Parts, we have received some relevant contacts."

"Our key components are all sourced from Nanshan Auto Parts, Nanshan Engines and Nanshan Transmissions."

"If they don't give us additional price cuts, it will be difficult to fully participate in the price war at the terminal."

Tao Wen came to Zhu Zhengfeng's office with some hesitation and reported on the current hot topics.

The existence of the Nanshan Red Flag is quite special.

It is naturally not that easy to ask shareholders to lower the price.

Especially at present, Nanshan Hongqi is still highly dependent on Nanshan-related companies.

It would certainly not be a good thing if the relationship between the two parties became very rigid.

"I have discussed this topic with people from other OEMs. Currently, Nanshan Auto Parts and other Nanshan-affiliated companies are cooperating with their customers in reducing prices just as well as in previous years."

"It is totally impossible for them to really achieve a 10% price reduction."

"So I think everyone just needs to give it a try and see if they can get a bigger price reduction than in previous years."

Zhu Zhengfeng's mind is very clear.

This is not the time to mess with Nanshan-affiliated companies.

Besides, Zhu Zhengfeng was confident that the quotation offered by the other party to Nanshan Hongqi would not be worse than that of other customers.

Under such circumstances, continuing to pressure Nanshan Auto Parts and other manufacturers to lower prices is obviously not a good solution.

After all, judging from the results, this is unlikely to have a good outcome.

For example, when it comes to gearboxes and some key parts, Nanshan Gearbox's solutions are already the best in the industry.

Even if you change to other manufacturers, you will not get more cost benefits.

In this case, there is no point in going through all the trouble.

"I also think that this is the right attitude to adopt. There is no need to disrupt our schedule because of the pace of other manufacturers in the industry."

"Automakers like Geely and BYD saw a certain degree of decline in sales last year, so they are under greater pressure than us. They want to capture part of the market by lowering prices, thereby increasing sales."

"But if everyone lowers prices like this, eventually all products will not be profitable, and this is definitely not a sustainable solution."

Tao Wen actually doesn’t really like price wars.

In particular, Nanshan Hongqi's positioning is higher among domestic independent brands.

Fighting price wars is not what they are good at, nor is it what they should do when enhancing brand power.

Just because you don’t do something sometimes doesn’t mean others won’t do it either.

So it is almost inevitable that the industry is becoming more and more competitive.

Where it will go in the end remains to be seen!

(End of this chapter)