Nanshan Motors isn't exactly a well-known company. Over ninety percent of people in China have probably never heard of it.
However, the automotive industry may seem large, but the circle is quite small.
By August, the workers at Nanshan Motors' factory were on summer break due to the heat, and this news quickly spread within the industry.
"Hey, a week off for the heat, feels like it passed in the blink of an eye. If only work time could pass that quickly too."
At another automobile company in Nancheng, Benben Motors, Guo Jianxiong was sitting at his computer chatting with his colleague Zheng Dong.
Summer breaks are a normal occurrence for many automobile companies. Every year, during the hotter months of July and August, some manufacturers give employees a week off. This break is also an opportunity to perform maintenance on equipment. However, don't think of this as extra vacation time; it's usually just a rearrangement of weekends.
"That's true. If we could get a month off like Nanshan Motors, that would be great," Zheng Dong said, clearly envious.
"A month off? That's impossible, right?"
Guo Jianxiong had nearly joined Nanshan Motors when he graduated, so he was always interested in news about the company.
"Well, they say it's a summer break, but really, it's just a production stoppage. They're calling it a break to make it sound better. Luckily, you didn't join Nanshan Motors back then, or you'd be in trouble now."
Zheng Dong seemed to be well-informed. After all, the two companies were in the same city, and even if they weren't in the same district, there was plenty of employee crossover.
"They really stopped production?" Guo Jianxiong asked.
"Of course, they did. When they were doing well, their monthly sales were under 10,000 units. The new models we've launched have completely outperformed them. Last month, Nanshan Motors only sold a few hundred units. The auto industry needs economies of scale to be profitable, and with those sales, they're definitely losing money. If they're not stopping production now, when will they? You'll probably hear news about them being acquired or going bankrupt in a few months."
"In China, there aren't many parts suppliers that stand out. Companies like Nanshan Motors use the same suppliers as us, meaning they have no cost advantage. Their pricing is even lower than ours, so their profit margins are very low. Stopping production sooner is probably a smart choice for their boss."
"You're right, it's all about cutting losses early."
"Mr. Xiao, all the parts are being prepared as scheduled, and we can ensure the first batch of vehicles will be assembled in time."
In the conference room at Nanshan Motors, a mid-evaluation meeting for the NS1 project was underway. Wang Fugui was personally reporting on the costs and production preparations of the parts.
"Progress is important, but we can't neglect quality. All our drawings are very clear, and both the procurement and technical departments must ensure that the parts produced by suppliers meet our specifications," Xiao Hui said confidently about the "Automobile Empire System."
With mature blueprints and processing data, it's expected that qualified products will be produced. However, most of the NS1's suppliers were chosen from domestic manufacturers. These suppliers can meet quality standards for a few samples, but when it comes to large-scale production, the consistency of quality becomes a concern. This issue was one Xiao Hui had faced in his past life.
"Don't worry, we've sent our procurement and quality personnel to oversee everything. We'll ensure the parts are delivered on time and meet the standards. Everyone knows that the success or failure of the NS1 is a matter of life and death for us," Wang Fugui reassured.
Wang Fugui had the full trust of the Xiao family, and at critical moments, he would not let them down.
"This time, we must succeed. If we succeed, Nanshan Motors will be the pride of China's automotive industry. If we fail, we'll be a joke," Xiao Hui said seriously, looking at everyone in the room.
"Mr. Xiao, based on the current cost reports, the NS1 project isn't profitable. Even if we manage to produce it successfully, we won't be able to turn around the company's financial situation. Should we consider raising the price?" asked Li Jinming, the finance director, who was clearly concerned about the project's profitability.
"If we cut the sales expenses by half, will we break even?" Xiao Hui asked.
As soon as he spoke, Zheng Zhihua, the sales director, became anxious. "Mr. Xiao, the necessary sales expenses are essential to meet the sales targets. Compared to previous models, the sales expenses for the NS1 are already very low, and we can't cut them further."
"Weren't you planning to advertise in newspapers and on TV? Cut those expenses first," Xiao Hui said, clearly unwilling to spend money on marketing. To him, the best form of marketing was free publicity.
In his past life, Tesla had mastered this technique, relying on Elon Musk's unique charisma to generate media coverage without spending any money on advertising. This was one of the key reasons they were able to be one of the first electric car companies to become profitable.
Given the NS1's low price, Xiao Hui wasn't keen on paying for media advertisements.
"The sales target of 30,000 units per month is unprecedented and highly challenging. I had been thinking about applying for a special promotion budget, but now..." Zheng Zhihua's frustration was evident.
"If the NS1 is going to be our turning point, it cannot be unprofitable. The procurement department needs to negotiate with suppliers on costs. If some suppliers lack confidence in our sales, we can offer them a cost based on different volume targets. If we can't sell 30,000 units a month, we can cover the price difference for them."
When Xiao Hui finished, Wang Fugui opened his mouth but didn't say anything further. As a procurement manager, he was used to being criticized for costs during evaluation meetings.