The Amazing son in law Chapter 6793

Charlie Wade was taken aback; he hadn’t anticipated this development.

During his last trip from the United States, the An family had only planned to launch a new energy vehicle brand. Now, he was surprised to learn that they were actually taking over an existing company.

Curious, he quickly asked, “Second Uncle, when you say ‘take over,’ do you mean acquiring a company outright?”

“Exactly.” Homula nodded in affirmation. “There’s a new energy vehicle company facing severe capital chain issues and desperately seeking financing. I spoke with your uncle about it; the valuation is relatively low, only a few billion US dollars, and they’re currently in the midst of a debt crisis. The founding team has halted production and is scrambling to secure funds. I happened to meet their CEO in Eastcliff, and after discussing things, we decided to take over for 3 billion US dollars.”

Charlie Wade nodded, recognizing that 3 billion US dollars was a manageable amount for him, and even more so for the An family.

At that moment, Hank, who had been listening intently, interjected, “The new energy vehicle company you’re referring to must be Gao Heng, right?”

“Oh?” Homula replied, surprised. “Does Professor Hank know about this company?”

Hank affirmed, “I’ve heard a bit. A while back, I learned they were experiencing a debt crisis and struggling with poor sales. Their production lines were shut down recently, and I figured they might be looking to sell themselves to survive.”

Charlie Wade chimed in, “Uncle Hank has conducted extensive research on the domestic new energy market. We had a brief conversation before, and I truly admire his insights, especially his perspective on seizing opportunities in challenging situations. I had intended to set up a meeting after Uncle Hank’s wedding, but since you’re all back now, I’ll arrange it as soon as possible.”

Homula responded, “Since Professor Hank is knowledgeable about new energy, I’d love to hear his analysis on the current landscape and any advice he might offer.”

Homula continued, “Honestly, the An family doesn’t usually engage in manufacturing, but this time we’re investing in power batteries, vehicle manufacturing, domestic chip R&D, and commercial aerospace. Our aim is to contribute to China’s manufacturing sector. Ideally, we’d like to nurture promising companies while also achieving some economic returns.”

“However,” he added, “if we’re to operate in the manufacturing sector, especially in vehicle production, I still feel quite lost. Gao Heng is a complete acquisition for us. Once we resolve their debt and equity transfer issues, we’ll need to invest additional funds to restart production. I’m uncertain whether to keep the existing team for a while or replace them entirely. I’d like to hear Professor Hank’s thoughts on this.”

After a moment of contemplation, Hank replied, “In my view, Gao Heng’s issues stem from its product positioning. Their main products rely on escalating material costs, which inevitably raises the customer price point and reduces sales volume. In the high-end market, they also face competition from traditional luxury vehicles. If their product quality doesn’t match the market demands, breaking into the market will be challenging.”

“Moreover, their product design lacks maturity. If they become entrenched in niche aesthetics, their market viability will continue to diminish.”

“Conversely, the brand you mentioned earlier, Remi, has a well-defined positioning and exceptional product design. Their offerings align with mainstream aesthetics, which gives them a competitive edge.”

As he paused briefly, Hank continued, “If I were to make a personal recommendation, I’d suggest splitting Gao Heng’s team in two. Retain the production side to keep the production line operational, but overhaul the design, marketing, and sales teams. The brand itself should also be completely rebranded. Although the acquisition is of Gao Heng, the brand is associated with its previous bankruptcy news, which has negatively impacted its value. It would be wiser to launch a new brand altogether.”

Homula inquired further, “If we were to establish a new brand, how should we position our main product?”

Hank answered, “The focus should be on competing with the top-selling products in the market.”

He elaborated, “To alleviate pressure and increase the likelihood of success, many entrepreneurs opt to target niche markets. They may believe that e-commerce competition is too fierce, so they create smaller platforms or programs focusing on specific segments like baby products, beverages, or daily essentials. However, this approach limits their potential for growth and often forces them to operate within someone else’s ecosystem. The automotive industry is no different.”

“Many companies entering the new energy vehicle market believe that competition is most intense in the 200,000 yuan range, particularly with dominant players like Tesla selling hundreds of thousands of vehicles annually, alongside various emerging domestic competitors. Consequently, some firms are targeting the lower market segments of 20,000 to 30,000 yuan or aiming for the mid-to-high-end market of over 500,000 to 600,000 yuan. However, adopting this mindset may lead to success in niche areas but will likely prevent them from competing with giants like Tesla.”

“At its peak, Tesla’s market value soared past one trillion US dollars. Even now, despite a cooling in new energy enthusiasm, its value remains above 500 billion US dollars. The combined market value of all domestic new energy companies doesn’t even come close. I’m not saying this out of admiration for foreign companies; rather, I believe many local firms often claim superiority over Tesla at press events while instinctively avoiding direct competition with it. If someone else were to delve into the new energy sector, I might advise them to do so, but the An family is in a different category.”

Hank then stated earnestly, “The An family possesses significant capital resources, and Charlie Wade’s financial backing far exceeds that of domestic new energy vehicle companies. Moreover, Charlie Wade’s Yisu Shipping boasts one of the world’s leading fleets of ro-ro ships. With the An family already investing in power batteries and acquiring Gao Heng Automobile, why not consolidate these resources to truly elevate new energy production to a higher level?”