Chapter 223 Cost Issues
“80 skilled workers...
This is neither too much nor too little.
There is no scale effect...
In addition, the difficulty of producing a new car is much higher than that of a Jeep. In the first month, it would be a great achievement to sell more than a hundred units.
Once you become proficient, you can only operate 200 at most."
Cao Tianwei calculated that there were 80 workers, and if all spare parts were ordered, all they needed was assembly.
That's all.
“Besides, all the spare parts nowadays are from outside. Can’t we produce them ourselves?
The logistics are very stressful.”
After Cao Tianwei finished speaking, he raised another question.
“We’ll start with 80 people and see how much sales we can achieve in the first quarter.
If it is really not enough by then, it will not be too late for us to talk about increasing production, expanding the factory and hiring more people.
By the way, doesn’t our factory have a company of soldiers?
I'll go talk to Captain Huang and we'll take care of the food so we can eat better.
As for logistics, please ask them to help us share some of the burden."
Fang Xiang's mind raced, and he remembered the company that was currently serving as the ballast in the factory.
They have been patrolling the factory every day to maintain order for several months.
Even machines get tired, let alone humans.
Moreover, these soldiers all have independent meals.
Fang thought he had been there before, and it was only slightly better than the place he had been to in the mountains of Shaanxi Province before.
He also mentioned letting them eat with the factory.
But Captain Huang refused, partly because he had not received any orders and partly because he did not want to add burden to the factory.
Now, the factory is short of staff, so we ask them to help and also improve their food.
I think Captain Huang will not refuse.
If he does something stupid, I can call the military district if I can't do it myself.
I think the military district will still do this for this good man.
"This is a solution."
When Cao Tianwei heard what Fang Xiang said, he nodded in agreement.
The food at Luoqi is now better than that at YTO.
Many meats that are in short supply locally are allocated directly by the province.
The treatment offered by Luoqi is unique in Luoyi, and other factories are somewhat envious.
Various people had come to the factory to cause trouble before, but they were all driven away by Xing Yi and Captain Huang.
Today, the troops and the masses are closer than in later generations.
Many people know that Luoqi is operating under the name of military industry.
The masses can only express envy at most, but those who cannot stand it are those with vested interests involved.
Fang Xiang is not afraid of these people.
Moreover, although Luoqi is recruiting a small number of people this time, there are only 80 vacancies.
But it can still bring a lot of benefits to the local area.
The local people will also benefit to some extent.
Once Second Automobile Works gets going, things will be even better.
"Then let's do this for now, you arrange the production matters.
Let's first sort out the production capacity and give me an exact quantity.
I'll arrange the export.
If you encounter anything you can't handle in terms of logistics and other aspects, leave it to me.
It’s just the price...”
Fang Xiang felt relieved to leave these matters to Cao Tianwei.
Now, there is one more thing, which is the price.
So far, the First Ministry of Machine Building has only issued a cost accounting.
We held many meetings regarding the sales price, but still couldn't decide on it.
It's time to resolve this matter.
It has been calculated before that if the annual production is less than 10,000 vehicles, the cost will basically not be reduced.
The cost is about 7,000 yuan per unit.
This price, converted into US dollars, is no different from cars of the same level on the market.
Even a little more expensive.
Today, the Beetle from Hans is the best-selling small car internationally.
The selling price is $2800.
Fang Xiang's BMW 115 basically costs $2500.
This is the ex-factory price, plus a series of procedures and fees such as transportation, tariffs, and export.
If it doesn’t sell for $3000, it will be a loss.
If you spend more than $3000, you can basically buy some outdated, small-brand, poorly equipped, entry-level mid-size cars.
There is no price advantage, and the brand has no appeal, especially since it comes from China.
$3000, no one would buy it.
If the annual output can be raised to 6000 vehicles, the cost can be reduced to about 2400 yuan, which is $ in US dollars.
Thirty thousand vehicles means a cost of more than five thousand dollars, and a factory price of around 2200 US dollars, which is the most ideal price.
But there is no need to think about it at the moment, it is impossible.
“As for the price, since you were away for a while, I also asked a number of manufacturers.
Many accessories do not have molds and are basically made by hand by the craftsmen.
Or if it is customized temporarily, the cost will naturally be outrageously high.
But if we have long-term orders, many manufacturers say that they can ship to us without making any profit for the time being.
But it’s a long-term contract.”
When it comes to price, Cao Tianwei knows it and is also very sensitive.
At this time, Fang Xiang revealed a piece of news that he didn't know.
"Oh? Have you calculated it? How much is it?"
Fang Xiang was immediately delighted after hearing what Cao Tianwei said.
"But it's not much less... I calculated it, it's still more than 6700."
Cao Tianwei looked at Fang Xiang with a little nervousness.
“It’s 300 yuan less, which is not a small amount.
The rest is up to us to figure out.”
Fang Xiang paused for a moment and realized that the upstream and downstream parts factories also needed to make a living.
To say that you don’t make money is just to say that you make less money.
The cost of making the mold is indeed expensive, and he is well aware of that.
Then, the biggest cost saving is the raw materials.
Just like steel, if it is produced in small quantities, the price will definitely be higher.
But if you need a lot and want it for a long time, the price will naturally be different.
There is still a lot of room for discussion on this.
Also, the fewer intermediate links there are, the lower the cost will be.
However, Second Automobile Works has not yet started, and Luoqi Automobile is still a small unit after all.
There is no reason for the big factories that control the raw materials to give concessions to a small unit like Luoqi.
Moreover, when Second Automobile Works becomes prosperous in the future, it can directly transfer those upstream and downstream parts factories to its own name.
We can even move to Luoyi, where the cost will be lower, but that’s a story for later.
But, just because Luoqi has no say doesn’t mean Fang Xiang has no solution, right?
"Operator? I'm calling Director Jiang's office at the Civil Machinery Bureau of the First Ministry of Machine Building.
Yes, I am the chief engineer of Luoqi, my last name is Fang."
Fang thought again and decided that he couldn't do without a phone call.
"Hello, who is it?"
Soon, Director Jiang's voice came from the phone.
"Director Jiang, I'm Fang Xiang.
There is something I need to trouble you with."
Fang Xiang held the receiver and looked at Cao Tianwei who was sitting in front of him and lighting another cigarette.
"Xiao Fang, whatever it is, just tell me if I can help."
Director Jiang's hearty laughter rang out from the receiver.
"Is such that......"
Fang Xiang told Director Jiang about his idea of reducing costs from the source.
“I’ve thought about what you said before.
However, there is great resistance. I am just a small department-level official and cannot control those powerful manufacturers.
Zhang Bu is also aware of this matter, so he has been worried about it recently. "
Unexpectedly, Director Jiang actually thought ahead of him.
And not only did I think about it, I also put it into action.
However, it seems that there are many obstacles.
"This... Is there any other way?"
When Fang Xiang heard this, he felt a little overwhelmed.
People can't really die from holding their urine, right?
"Our rank is too low to have a say in this matter.
Those who can speak have concerns.
We can either wait or rely on people above us to push things forward."
Director Jiang stopped talking here.
It was clear to Fang Xiang that he was being asked to find someone of a higher level.
"Okay, I understand, I'll ask first.
Let’s keep in touch.”
After Fang Xiang hung up the phone, he looked at Cao Tianwei with an inquiring expression.
He frowned and shook his head.
It seems that I really have to make this call.
