Chapter 375 Unprecedented Rapid Import
OEM production seems to be a tradition at General Motors.
It can even be said that GM is a manufacturer that likes to rebrand the same car or make minor modifications, and then sell it in different places...
For example, when the 2018 Regal was launched in China, it was considered a Buick brand model, and it naturally followed Buick standards.
However, it is actually the same model as the Holden Commodore VXR in Australia and the Opel Insignia GSi in the European market.
We only carry out OEM sales according to the needs of different markets.
In addition to General Motors, Volkswagen has actually done similar things.
Historically, in 1995, Volkswagen Sharan was sold as an OEM to Seat and Ford. Ford did not cease production until 2006, while Seat continues to stand with its big brother to this day.
Regarding OEM, it can be said that as long as there is a market, nothing is a problem.
General Motors is very optimistic about Mercedes-Benz sedans, and its various moves in OEM sales are naturally very fast.
For the BMW Group, if it just changes a car logo, the parts can be produced in a month, but the time-consuming thing is the transportation of the vehicle.
In order to compress the intermediate time to the greatest extent, General Motors directly notified BMW to transport the car there first, and then change the label after it arrived in the United States.
After all, compared to bulky cars, car logos are small and light, so they can be transported directly by air.
"Director, our first batch of 500 Mercedes-Benz cars have successfully arrived in the United States. They have been replaced with Buick logos and are now being transported to various Buick dealers."
Chen Chenxing has been very busy during this time.
Whether it is Nanshan Technology or BMW Group, there are many businesses that require him to be busy.
"General Motors is so motivated. It seems that they are quite satisfied with the appearance and performance of the Mercedes-Benz sedan."
Although the two parties have signed the contract, GM's impatient attitude is still a bit beyond Jiang Hui's expectations.
This automobile company, which has long occupied the leading position in the world's automobile industry, seems that life is not that easy now.
No wonder the United States later forced the yen to appreciate through the Plaza Accord. In fact, a large number of Japanese automobiles were exported to the American market, which had a huge impact on local automobile companies.
"The power and torque of our 2.5L engine are no worse than GM's own products of the same model, and the fuel consumption is indeed better."
"Under this situation, General Motors will definitely try to see if it can make the Mercedes-Benz sedan a new flagship product of the Buick brand."
"After all, after this car is exported to the United States, the extra money earned will be General Motors' profits."
Chen Chenxing has been to the United States several times in the past year and has a relatively deep understanding of the automobile market there.
"General Motors wants to make the Mercedes-Benz sedan a hit product, and we must also be prepared in terms of production capacity."
"If someone really has the ability to sell tens of thousands of Mercedes-Benz cars a month, but we can't provide enough products, that would be a pity."
"So even if we produce a Mercedes-Benz sedan and only get 10% profit after exporting it to General Motors, it is still worth doing well."
In later generations, the net profits of most automobile companies are less than 10%.
But in the Chinese automobile market, it was quite special for a long time.
Before 2020, the profits of many joint venture car companies were above 10%.
Joint venture car companies such as Shanghai Volkswagen in the 1980s and 1990s had profit margins of over 30%, which was extremely exaggerated.
Therefore, the 10% profit margin of Mercedes-Benz cars is really not very high.
At least compared with the profit margin of Mercedes-Benz cars sold in the domestic market, it is lower.
Of course, it is difficult to measure if the impact of export earnings is taken into account.
After all, the exchange rate has different meanings when measured in different dimensions.
"Our newly invested second factory has a production capacity of 120,000 vehicles a year. The current capacity load is only 20 to 30%, which should be enough to meet demand."
"The new factory for Land Rover is also being prepared."
“These two factories have already taken into account the issue of product compatibility when designing, and can best deal with the situation where some models have good sales and some have poor sales in the future, resulting in the need to coordinate production capacity between production lines.”
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Although Chen Chenxing is engaged in sales, he is also concerned about some aspects of production.
The concept of linking production and sales is quite popular within the BMW Group.
……
As the first product sold in the American market, the Mercedes-Benz sedan has been rebranded as Buick, but it has also attracted the attention of many interested people.
"Bill, General Motors has introduced a mid- to high-end sedan from China to compete with Toyota's Camry and Honda's Accord. Do you think this car will have an impact on the sales of our Taurus?"
As the president of Ford, the second largest car company in the United States, Peterson still has a heavy burden on his shoulders.
Faced with a similar situation to General Motors, Ford Motor's operating conditions are also not ideal under the attack of Japanese car companies such as Toyota Motor and Honda Motor.
As one of the three largest automobile companies in the United States, Chrysler Motor Company is even on the verge of bankruptcy. They are all in the same boat.
Correspondingly, Honda opened its first automobile manufacturing plant in Ohio, and Toyota opened its first joint venture manufacturing plant in California.
The car sales of the two Japanese automobile companies have skyrocketed in the United States, directly squeezing the market share of the three major American automobile companies, making them feel a huge crisis.
Faced with such a severe situation, what should Ford do?
Ford's CEO at the time, Philip Caldwell, was restless and determined to develop a mid-level family sedan that could compete directly with the Accord and Camry.
He also knows that in order to develop new products in a new competitive environment, process reform must come first.
Traditionally, car development followed a vertical, linear process.
In the linear development process, important links such as market research, conceptual design, engineering development, production planning, production process, and after-sales service are separated from each other and completed independently in steps.
This development model follows the natural sequence of the product cycle, and management is relatively simple and effective, so it is widely adopted by major automobile companies.
However, in the new competitive environment characterized by faster, better, and lower costs, this linear development model has many limitations.
In order to improve this model, Ford began to implement a flatter development process-that is, the development project team gathered all personnel related to vehicle development under one roof from the beginning.
This was the collaborative development model that was later widely advocated in the field of automotive engineering.
Under this new model, the Taurus car development team came into being.
In terms of power design, Ford has adopted advanced front-wheel drive for the first time in the Taurus model, equipped with a V6 engine and a fully automatic transmission. The interior dial has undergone extensive ergonomic research, and the buttons are arranged in a centralized and reasonable manner, which is both convenient and beautiful.
At the same time, the interior of the car has also been comprehensively optimized, greatly increasing the interior space.
In 1985, the Ford Taurus was launched in North America.
Ford first introduced the Taurus to the market in two models: a four-door sedan and a five-door station wagon, with a basic price of $10,000.
Ford's unremitting efforts and innovation on the Taurus model paid off: the Taurus was a hit with the public and the media as soon as it was unveiled.
People are pleasantly surprised by its beautiful shape and cost-effectiveness.
If history continues to develop normally, the Taurus would have sold more than 260,000 units in its first sales year. It would definitely be considered a hit product, completely reversing Ford's unfavorable situation and allowing Japanese car companies to see the impact. The rich heritage of the American auto giant.
Seeing that Taurus has just been launched, various media are praising its various designs and think it is a very amazing product.
After all, most of the models on the American market at that time had sharp edges and corners, and there were very few models with rounded shapes.
The Ford Taurus uses a design similar to that of the Mercedes-Benz sedan, which immediately caught everyone's attention.
However, the people at Ford were not happy for a few days when they discovered that General Motors had actually imported a batch of OEM cars from China, and the styling was also following the path of Taurus.
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The impact of its appearance is greater than that of Taurus.
No wonder, as the president of Ford Motor Company, Peterson can't sit still.
"The product imported by General Motors from China is called Buick Forest. The appearance is indeed very well designed, but General Motors is still too anxious."
"Other than changing a logo, the entire Buick Forest is imported from China, so the quality is definitely not guaranteed."
"You have also visited China for inspection and exchange before, and have a relatively deep understanding of the level of China's automobile industry. They are simply not equipped to produce high-performance engines and gearboxes, nor are they capable of chassis tuning."
"Simply relying on beautiful appearance may attract some consumers at the beginning, but it will soon bring a lot of trouble to General Motors."
As Ford Motor Sales Director, Bill is very confident in his Taurus sedan.
This is Ford Motor's flagship product this year. It has already been in short supply since it was launched on the market, and the factory has rarely started working overtime production.
This situation cannot be changed by a car from China.
"You may be right, there may be problems with the quality of Buick Forest, but its appearance is very stunning, enough to overshadow our Taurus."
"This is very detrimental to the sales growth of Taurus, so your sales department should still pay attention to market changes."
Peterson definitely doesn't think the performance of the Taurus sedan is worse than the Buick Forester, but purely based on its appearance, he still lacks confidence.
However, the main focus of the Taurus sedan is its stunning appearance and surging power performance.
If this key selling point is compared to others, it will definitely have an impact on sales.
Especially after General Motors made great efforts, the situation became even more different.
……
Phils was a sales manager at a General Motors dealership.
For these sales managers, in addition to the basic salary, sales commission is also a very important item in their monthly income.
In the past few years, General Motors' sales performance has not been very satisfactory, and Phils' income has declined to a certain extent.
This month, their store has a new batch of cars called Buick Forest.
Before the model arrived at the store, Phils had never heard of this model. General Motors did not specifically introduce the research and development background of this product. It only introduced the car’s performance parameters and marketing rhetoric. After the training, each store will start sales promotion.
As a senior sales manager, Phils knows exactly which cars are easier to sell.
The lowest version of this Buick Forest is priced at US$11,000, which is very close to the price of mainstream mid-level sedans on the market.
In terms of power performance, the engine parameters will not be worse.
The only regret is the lack of automatic transmission models, but for the car market in 1985, this was not a particularly big problem.
Especially after seeing the actual Buick Forest car, Phils immediately prepared to make this car the focus of his future sales to customers.
There's no way around it, its appearance is so recognizable that people can't forget it after just one glance.
In this case, Phils has the lowest difficulty in selling it.
Sure enough, after several days of trying, all the first batch of Buick Forests arrived were sold out, and Phils has already felt its sales potential.
"Sofik, we have to find a way to get General Motors to send more Buick Forests. This car is so popular."
"We basically don't need special promotion. After consumers see the actual car, their willingness to buy becomes stronger."
“Among the few cars I sold, two consumers were originally planning to buy a Toyota Camry and a Honda Accord, but in the end they were attracted to the Buick Forest.”
The store doesn't have enough inventory. The key is that we don't know when the next batch of Buick Forest will arrive.
That's why Phils boldly communicated directly with the general manager Sophie, hoping that the store could find a way to bring back more cars.
In the past, when Buick cars were hard to sell, the General Motors sales department forced stores to pick up more cars. But now that Buick Forest is selling well, there are no cars to sell.
Doesn’t this affect Phils’ commission?
"I'm already working hard, but the next batch of Buick Forests won't arrive for a week."
"From now on, a batch of Buick Forests will arrive every week, but the number will not be large."
Sofik now also began to feel the troubles of happiness.
The car is easy to sell, but there is no inventory.
He worries that consumers won’t have the patience to wait.
"When will we be able to provide sufficient Buick Forest for our store?"
Phils asked a question that all the sales managers in the store were very concerned about.
But Sofik had no way to answer.
(End of chapter)