Chapter 3176 Tariff Adjustment

The cost of independent production is higher than that of external procurement, and the quality is worse.

According to the principles of market economy, of course it is purchasing.

The most typical one is the automobile industry.

The domestic automobile industry has made significant progress in the past two decades, and a big factor is tariff restrictions. Through tariff adjustments, it has become extremely costly for local dealers to purchase foreign cars and sell them locally.

With this restriction, domestically produced cars become “cheaper”.

There is market competitiveness.

The negative example is the United States.

The United States was once the world's largest automobile industry country, but it advocated free trade and did not impose high tariffs on foreign cars. As a result, Korean and Japanese cars with low prices, good quality, low fuel consumption, and comfortable rides flooded into the U.S. market, devastating the United States. The automobile industry is on the brink of death.

Zhou Buqi was in Zhou Shaoning's office at this time.

Some of the paintings on the walls and the family photos on the desk have disappeared.

Because Asda is moving.

Try to move to a new office headquarters before going public!

The new headquarters is right next to the Ziweixing headquarters campus, where 10 office buildings have been built. The overall architectural style is consistent with that of Ziweixing. It also presents the theme of freedom and openness. The two headquarters campuses are interconnected, and employees from both sides can travel without restrictions.

Because there are many people's facilities on Astar's side that will take longer to complete, such as indoor gyms, cafes, supermarkets, etc., employees on Astar's side can also go to Ziweixing. In the future, we may even promote the interconnection of employee canteens, smart shuttle buses, and tourism projects of both parties.

The R\u0026D and design departments have taken the lead and moved to the new home first.

Zhou Shaoning's president's office is also taking action. It is expected to move there before the end of the year and to work in a new home after the new year. The temporary headquarters here is a rented office building, and it will be time to cancel the lease by then.

Zhou Buqi looked around and continued the topic just now, saying: "Doesn't India have local protection? No tariff restrictions?"

Zhou Shaoning said: "India is also a WTO country, so it is relatively restrictive in this regard. However, last year it passed the 'Made in India' plan and it has been implemented this year. It will implement high tariffs and subsidy policies for mobile phones."

Zhou Buqi frowned slightly, "What's the dilemma?"

Zhou Shaoning said: "This is nothing. The tariff on mobile phones is only 20%."

"Isn't 20% high?" Zhou Buqi thought he was a bit too optimistic. "The profit of mobile phones is not even 20%!"

Zhou Shaoning said with a smile: "The 20% tariff treats everyone equally. The situation in India is different from that in China. According to Indian statistics, the self-sufficiency rate of mobile phone manufacturing is 96%. That may be true, but it is mainly for feature phones. . Local manufacturing of feature phones in India should be okay now, especially with the 20% tariff protection, which is definitely cheaper than purchasing them domestically, but smartphones are definitely not.”

Zhou Buqi nodded, "The quality is different."

Zhou Shaoning said: "Yes, just like mobile phone batteries, India can also make mobile phone batteries, but this kind of battery can be used on very cheap feature phones. It may not work on smart phones, so the batteries must be imported. And The 20% tariff targets not only mobile phones, but also mobile phone spare parts.”

"That's it!"

Zhou Buqi suddenly realized.    There's nothing to worry about.

As Zhou Shaoning said, the situation in India is completely different from that in China.

The domestic manufacturing industry is strong enough, and it is more flexible in dealing with many things. Heroes are judged by their results. With tariff protection and certain industrial support, many local companies will emerge, and local products will be very competitive.

Just like a smartphone battery.

At the beginning, you also need to go to Korea, Japan, Europe and the United States to purchase.

But with tariff adjustments, the cost of procurement is too high. In order to reduce costs, domestic batteries will develop under the stimulation of the market. With sufficient strength and good technology, domestic battery manufacturers have basically wiped out European and American battery manufacturers. Not only domestic mobile phones are using domestic batteries, but also foreign brands such as Apple, Samsung, LG, and Blackberry are purchasing high-quality and low-price domestic batteries.

It can be said that in the smartphone industry, except for a few key spare parts such as processor chips and sensor chips, which still need to be purchased from abroad, most of the industrial chain can be self-sufficient domestically.

Not so in India.

It is said that the self-sufficiency rate is 96%, but it is easy to be deceived by the data.

India can also produce local batteries, screens, memories, speakers, microphones... However, it is okay to put these junk gadgets on feature phones and sell them to some people at the lowest level, but if they are put on smartphones... Who will buy such a mobile phone? purchase?

This means that even mobile phones made in India must purchase a large number of spare parts from abroad, and the cost of these core spare parts will account for about 95% of the material cost of a mobile phone.

The tariffs on imported spare parts and imported mobile phones are the same, 20%.

This means that the tariff for mobile phones imported from abroad is 20%; the tariff for locally manufactured mobile phones is 95% x 20% = 19%.

There is basically no difference!

Even if India also launches an industrial subsidy policy, each mobile phone will subsidize 5% of the cost... which is not much different.

It is not enough to make up for the huge backwardness of India's industrial chain and manufacturing capabilities.

In this case, why not assemble and manufacture abroad instead of in India? The local facilities are backward, the workers' skills are backward, the transportation is inconvenient, the productivity is low, and there are a lot of problems. If it is assembled and manufactured abroad... it is better to go directly to China to purchase the whole machine, and import it to the local market after the OEM, which will be more cost-effective, simpler, and have lower management costs.

Zhou Buqi said with a smile: "This is bureaucracy, a ridiculous policy formulated by a group of people who don't understand the industry. No wonder India joined the WTO earlier than China, but did not enjoy the dividends of the WTO like China and become the center of the global manufacturing industry."

Zhou Shaoning nodded, "It's mainly people. China has encountered some technical bottlenecks. No matter how to exploit employees and force the team, whether it is plagiarism or theft, or even directly rob, it is necessary to break through the bottleneck and make the product. India is not so good, lacking such ruthlessness and flexibility."

Zhou Buqi said: "Yes, many European and American countries have criticized my country's manufacturing industry, exploiting employees, not protecting labor rights enough, not respecting intellectual property rights, and always stealing technology and machines. Secret. If you think about it the other way around, you will understand that this is actually a kind of praise, and it is the nuclear weapon that the domestic manufacturing industry has rapidly risen and swept the world. If you don't criticize India, it's because India is too bad, it doesn't pose a hidden danger, and it's not worth criticizing. "

Zhou Shaoning nodded and said, "So India's tariff protection will not pose a threat, it will only further destroy India's local mobile phone manufacturing industry. I estimate that in 3-5 years, the Indian market will completely become the world of domestic mobile phones. Xiaomi, BBK, Lenovo, Huawei Honor, and TCL are also entering the Indian market to dump those ultra-low-priced low-end phones. "

Zhou Buqi squinted and said, "So the difficulties that Estar is facing now are not from the Indian government. "

Zhou Shaoning said in a deep voice, "I think it has something to do with Qualcomm! "