The Amazing son in law Chapter 7637

charlie wade asked him, “Professor hank said the price/performance ratio is excellent. I see that many cars on the market claim to have extremely high price/performance ratio, and some are even selling at a loss. If we want to have high price/performance ratio, do we have to lose money to gain publicity?”

charlie wade doesn’t care about money, but he cares about reputation. He thinks that the best development direction for Bruce Automobile is market recognition, while at the same time he can also make a certain profit.

Profit is not for making money for oneself, but to prove that Bruce Automobile has high product strength and can make money. If it loses money to gain publicity, it is essentially a failed brand and a failed attempt, which will bring shame to its father.

hank said to him, “Young Master wade, many car companies on the market are actually misleading. They say they’re losing money, but that’s just a financial misleading. Many car companies convert the initial hardware investment and development costs into the cost of manufacturing the car. It’s like they invested 100 million to open a high-end hotel, making 50 million a year and paying it back in two years. That’s obviously huge profits, but as long as the 100 million investment hasn’t been fully recovered, they can shamelessly claim to be losing money. They tell consumers that they lose money every time a room is sold, and that they’re completely subsidizing consumers, making consumers think their rooms are very cost-effective, when in fact their rooms are extremely profitable.”

At this point, hank continued, “Sometimes, in order to dilute profits or even cause the company to report losses, they will split off some of the company’s profitable businesses and increase investment in other areas. For example, as I just mentioned, a hotel with a total investment of 100 million yuan and a profit of 50 million yuan a year will recoup its investment in two years. However, after one year and ten months, it will invest in a second store and also take out the catering and other profitable services of the first store and set up another company to handle them. As a result, they will still report losses in the third year.”

charlie wade smiled and said, “I understand. These companies are actually transferring the tens of billions of startup investments to the first batch of consumers. The actual manufacturing cost of a car is only 100,000, and then it is sold for 300,000, with a gross profit of 200,000. However, due to the tens of billions of initial investments, each car has to bear the cost of tens of millions. In this way, it seems that they are selling cars at a loss.”

“That’s right.” hank nodded and said, “So I suggest that we don’t play this kind of trick on consumers in the early stages and don’t collude with them. If we want to become bigger and stronger, we must subvert their unspoken rules and directly cut off their financial support.”

charlie wade asked curiously: “Professor hank, do you have a plan?”

hank said: “Master wade, my plan is that Bruce Automobile might as well be like Pang Donglai. We can directly list all the costs of a car. First of all, the intuitive costs, such as the raw material costs, production costs, taxes, logistics, warehousing, and management and sales costs of each car. All of them should be listed clearly. Then there are the hidden costs, such as the design cost, mold cost, and production line cost of this car. For this part of the cost, we will share it based on the sales volume of 500,000 units for each car. If we have invested a total of 5 billion in the research and development and production line of this model, then the hidden cost of each car is 10,000 yuan. Once the cumulative sales of this car exceed 500,000 units, it means that we have recovered the initial investment costs. Therefore, starting from the 500,000th and 1st unit, our car price will be deducted from this part of the shared cost. After listing all these costs, we will announce to consumers how much our pre-tax profit is to ensure that our profit margin is within a reasonable range.”

charlie wade’s eyes lit up and he said, “I’ve never heard of cars being sold this way. Even the popular Remi car hasn’t disclosed its R&D costs and hardware investment costs.”

“Right!” hank said, “The auto industry is already in overdrive. Everyone is constantly introducing new products and offering discounts and price cuts, but in reality, many cars are priced too high!”

“It’s like those imported brands that cost 300,000 yuan and sell it to consumers for 1 million yuan. If the 1 million yuan sells well, they start the terminal price increase mechanism. Although the list price is 1 million yuan, you will never be able to get the car unless you add 100,000 or 200,000 yuan.”

“If we find that no one is willing to pay more, we will sell it at the guide price of one million.”

“When even one million doesn’t sell, I’ll sell it for 800,000, 700,000, 600,000, or even 500,000…”

“I think this practice is like writing the word ‘unscrupulous businessman’ directly on your face. Consumers will definitely have a very bad impression and it will have a huge impact on the brand image.”

“Since we are latecomers and want to catch up, we must do what our predecessors dared not do, or were unwilling to do. We should simply remove the fig leaf and face consumers honestly. If they can’t keep up, they deserve to be eliminated!”