Rebirth in 1989: Building a Chinese Technological Empire

"Mr. Geng, the second way of cooperation is also very simple. According to the official price of the vehicle, we charge a 5% patent fee for each car sold..."

Xu Huasheng directly said the second way of cooperation.

This way made Geng Jie swallow his saliva. A 5% patent fee is not low.

A car worth 100,000 yuan will charge a patent fee of 5,000 yuan according to this ratio.

If this car sells for 2 million yuan in the future, the patent fee alone will be 100,000 yuan per car. And this patent fee is collected continuously.

"Mr. Xu, can it be cheaper?"

Geng Jie asked directly.

"Mr. Geng, this is already very cheap. If it weren't for the fact that we are all Chinese, this patent fee would not be less than 10%. You are also an expert, and you should also know that designing a good car is very expensive. As far as this car is concerned, according to this patent ratio, it may take a long time for us to recover the cost..."

Xu Huasheng did not lie. It is difficult for this car to recover the cost just by collecting patent fees.

But Huasheng Automotive Research Institute earns more than just patent fees. FAW cannot manufacture many things in this car by itself.

FAW needs to purchase engines, gearboxes, and many other things in the car directly from Huasheng Group.

These parts have quite good profits, especially engines, gearboxes and many electronic components, which have quite high profits.

In summary, Huasheng Automotive Research Institute can take at least 70% of the profits or even higher for selling a car.

To put it bluntly, FAW, which does not master core technology, is working for Huasheng Automotive Research Institute.

This is the reality. If FAW has technology, it still has the capital to negotiate. Now FAW does not have this capital, and Huasheng Automotive Research Institute will give whatever price it says.

"Mr. Xu, besides this car, do you have any other cars? Just try to make the price as ordinary as possible. This car is good, but it doesn't sell well..."

Geng Jie looked at Xu Huasheng with expectation.

This car is good, but it is too expensive. Even if it starts at 1 million in China, how many can it sell in a year?

Although super luxury brands are expensive and profitable, they sell in small quantities. They may only sell a few hundred cars a year. Even if they are all profits, how much can they earn?

"Mr. Geng, of course there are ordinary cars. Not only that, but there are also many types..."

Xu Huasheng took Geng Jie directly to another large exhibition hall.

There were many cars in the huge exhibition hall. These cars looked very beautiful and classy.

These cars made Geng Jie unable to walk, and he looked at them one by one.

Looking at Geng Jie's appearance, Xu Huasheng's mouth was full of smiles.

These cars are actually re-shelled cars. They are all re-shelled cars of models under Shanhai Automobile Group. The commonality rate of parts between these cars and Shanhai Automobile Group's cars is as high as about 80%.

The chassis, engine, gearbox and other large parts are actually the same, but there are some differences in the tuning.

The engine just reduced the power a little, and the gearbox changed the logo.

Put these cars together with Shanhai Automobile's cars, and the design style is different from the outside. But if you really take them apart, you will find that there are too many similarities.

A car with a new shell, a real car with a new shell.

Huasheng Automotive Research Institute has even gone so far as to design more than a dozen new car with new shells. These new car with new shells are prepared for customers.

For example, after FAW adopted these solutions, these cars will directly hang the logo of FAW's car brand. Parts and components will also be purchased from Huasheng's supply chain.

For the same part, the more it is produced, the lower the price.

The cost of producing 10,000 and 100,000 engines is different.

In the future, as more and more car companies cooperate with Huasheng Automotive Research Institute, the sales volume of these parts will increase.

The greater the sales volume, the lower the cost.

At that time, as long as Huasheng Group controls the price well, it can make its partners absolutely dependent on Huasheng Group.

When the cost of producing the same engine yourself is higher than the cost of purchasing it yourself, who will produce it?

In this cooperation model, the companies that cooperate with Huasheng Group have lost their souls over time.

There is money to be made, but there is not much technology.

If you encounter a ruthless company, they may even cut off the technical department, so you can just be an assembly plant and operate your own brand.

Your own factory is an assembly plant, and all the parts are purchased from Huasheng Group. Just like many mobile phone brands in the world now, it is a branded product.

Geng Jie looked at these cars carefully.Once, and finally even test-drive one car after another.

After the test drive, Geng Jie's eyes were full of excitement.

Xu Huasheng also said that there are two cooperation models. The second model is to collect 5% of the patent fee.

This is the case for super luxury cars and the most ordinary civilian cars.

In other words, FAW can get these mature automobile patents without spending any money, and can produce these cars to make money.

The profit of a single car in China's automobile market is still quite high. As long as these cars are obtained, FAW can still make money even if it pays 5% of the patent fee to Huasheng Automobile Research Institute.

For FAW, the most important thing now is to have products, to use products to build its own market, and to build its own brand.

Only in this way can it have a place in this market in the future. If it does not act now, after the market is madly snatched by Shanhai Automobile Group, FAW will probably really close down. Although it is a state-owned enterprise, it is not omnipotent. It cannot bear the loss and no profit for years.

After looking at all the cars, Geng Jie officially negotiated with Huasheng Automotive Research Institute on behalf of FAW.

Yes, FAW wants all the good stuff.

But Geng Jie also knew that FAW could not be greedy now, and must choose some suitable models to test the waters first. If there is good sales, then expand the product line.

Which super luxury car of Hongqi is a must, even if this car does not make money.

Hongqi is a super luxury brand, and FAW must create another civilian brand. The road of joint venture with foreign car manufacturers is no longer the best choice.

Now FAW has a better choice. Purchasing patents from Huasheng Automotive Research Institute is more cost-effective and more affordable than cooperating with foreign capital.

After some negotiations, FAW finally selected several cars.

The cars in this exhibition hall have been tested for a long time. After purchasing, you only need to report to the state, and this thing can be put on the market for sale.

For FAW, as long as a production line is established, these cars can be produced. After all the negotiations were over, Xu Huasheng was also full of expectations. With FAW as an example, if FAW made money in the future, other car companies would come to him one after another.