Tech Giants: Starting from Bankrupt Companies

97: Chapter 97 The Wisdom of Questions and AnswersAt 3:20 PM, the experience segment ended, and the media Q&A began.

Zhou Qingyu returned to the stage, took a bottle of mineral water from a staff member, and took a sip. He had taken off his suit jacket, his white shirt sleeves were rolled up to his forearms, and his tie was loosened.

”Next is the media Q&A. I know everyone has many questions, some of which might be quite sharp.” He smiled. ”That’s fine. Let’s have an open conversation today.”

The first reporter to raise their hand was from Auto Business Review.

”President Zhou, is the 150,000 yuan price point too low? Red Flag is, after all, the former ’National Car.’ Won’t such a low price damage the brand value? After all, moving the brand upmarket is the goal of all Chinese car companies.”

The question was direct, and the room went silent.

Zhou Qingyu thought for a few seconds and answered seriously, ”First of all, thank you for your question. But I might need to correct a concept—Red Flag’s brand value isn’t defined by its price, but by user recognition.”

He walked toward the large screen and pulled up a chart. ”This is Red Flag’s sales curve over the past decade. The peak was in 2008, with 32,000 units sold annually; the lowest point was in 2016, with 4,700 units. Why? Because Red Flag lost its way—it wanted to go upmarket, to benchmark against Audi, Mercedes-Benz, and price itself at 300,000, 400,000, or 500,000 yuan. But consumers didn’t buy it. Why? Because the product strength couldn’t support that price.”

The chart switched to user survey data.

”’How much do you think a Red Flag is worth?’ We conducted 5,000 surveys. For those over thirty, the average psychological price was 180,000 yuan; for those under thirty, it was 150,000. Is it harsh? Yes. But that’s the reality—the brand premium of Red Flag in the hearts of young people is almost zero.”

He turned to face the audience. ”So what we need to do isn’t to force a higher price, but to first get Red Flag back onto the consumer’s shopping list. How? With solid products and sincere pricing. If we price it at 250,000 yuan and no one buys it, that’s the real damage to the brand. Conversely, if we price it at 150,000 and sell 200,000 units a year, letting 200,000 families drive a Red Flag, how will the brand value change?”

He paused, his voice firm. ”A brand is a living thing; it grows. If we first get a million young people driving Red Flags, the brand will naturally become younger and more valuable. This is our strategy—scale first, then height.”

Applause. Many young reporters were nodding.

The second question came from a financial media outlet: ”Spark’s total investment in the acquisition of Red Flag exceeds 20 billion yuan. According to our calculations, the gross margin of the Red Flag H9 might be less than 20%. What monthly sales volume is needed to break even? What is Red Flag’s timeline for turning a profit?”

This question was even sharper, involving commercial secrets. But Zhou Qingyu did not dodge it.

”I can’t disclose specific financial data, but I can share a few numbers: we’ve planned the monthly break-even point for the Red Flag H9 at 8,000 units; at 15,000 units, we start seeing significant profit; our target is 20,000 units. Is it hard? Very. But looking at today’s configuration and price, I think there’s a chance.”

He pulled up sales data for competitors. ”The lavida averages 30,000 a month, the Corolla 28,000, and the Civic 22,000. If the Red Flag H9 can snatch 10% of the market from them, that’s 6,000 to 7,000 units; if it snatches 20%, that’s over 10,000 units. Our goal for the first year is to break 10,000 units in monthly sales.”

”As for the timeline for turning a profit—” He smiled. ”Chairman Su Chen’s requirement for me was three years. But the goal I set for myself is two years. Why do I dare to set this goal? Because Spark brings not just capital, but also technology, supply chain, and management experience. After four months of renovation, the Red Flag Changchun factory’s production efficiency has increased by 40%, and costs have dropped by 15%. These are the core competencies.”

The third questioner was a foreign reporter whose Chinese was fluent but accented. ”Mr. Zhou, according to the data, the core technology of the Red Flag H9—the 48V Mild Hybrid System—comes entirely from Spark Power. Does this mean Red Flag lacks independent R&D capabilities? Will Red Flag be reduced to being Spark’s ’OEM factory’?”

The question was prickly, and the atmosphere in the room tensed up.

Zhou Qingyu smiled, looking very composed.

”This friend might not fully understand the collaboration model of the modern automotive industry. Let me give you a few examples: Volkswagen’s DSG gearbox uses core technology from Bosch; Toyota’s hybrid system uses key components from Denso; Tesla’s batteries come from Panasonic. The world’s top car companies all use top-tier technology from suppliers. Is there a problem with that? No.”

He walked to the display car and patted the hood. ”What’s important? It’s the integration capability, the matching and tuning, and the final user experience. For Spark’s 48V system, our Red Flag engineers participated in eighteen months of joint development, making over two hundred calibration adjustments for the Red Flag H9’s weight, wind resistance, and driving habits. The final fuel consumption, power response, and smoothness are the result of both parties’ efforts.”

He turned to the reporter, his gaze sharp. ”More importantly—Spark is China’s Spark, and Red Flag is China’s Red Flag. This is called an ’independently controllable supply chain.’ If we used a Bosch system, that would be foreign; but we use a Spark system, which is Chinese. In today’s globalized world, being able to build cars using one’s own technology chain is a capability in itself.”

Thunderous applause, the loudest yet.

The foreign reporter nodded and took notes in his notebook.

The Q&A session lasted forty minutes. Zhou Qingyu answered seventeen questions, ranging from technology to market, strategy to sentiment, with honesty and wisdom. When the host announced the final question, it was already 4:00 PM.

”President Zhou, you haven’t announced the prices and benefits yet,” the last reporter reminded him.

Zhou Qingyu slapped his forehead. ”I almost forgot the most important part. Please look at the big screen.”

The big screen lit up:

[Red Flag H9 Joyful Drive · Youth Edition Launch Benefits]

Price:

Manual Transmission: 149,800 yuan

CVT Version: 156,800 yuan

Launch Exclusive Benefits (Limited to the first owner):

Lifetime free basic maintenance (engine oil, oil filter, labor costs)

3-year or 100,000 km vehicle warranty (core components extended to 5 years/150,000 km)

Spark-Red Flag Dual-Ecosystem Points (can be redeemed for charging, car washing, and maintenance services in the Spark Car Owner App)

First 10,000 owners: Free upgrade to the ”Intelligent Driving Assistance Package” worth 10,000 yuan (includes ACC Adaptive Cruise Control, Lane Keeping Assist, and Automatic Emergency Braking)

Pre-order Policy:

Pre-orders accepted starting today, deposit of 1,999 yuan (refundable)

Estimated first batch delivery: November 2017

Delivery order based on deposit payment time

The moment the prices were announced, a collective gasp rose from the audience.

”Lifetime free maintenance?!”

”Free intelligent driving package for the first ten thousand?!”

”This...”

The live stream comments exploded again:

”Lifetime maintenance? Red Flag has gone crazy!”

”ACC + Lane Keeping for 10,000? So honest!”

”Ordered! If you don’t buy this, you’re not Chinese!”

”The ’wait-and-see’ squad asks: Is there a catch?”

Zhou Qingyu added an explanation: ”Lifetime free basic maintenance refers to the cycles and items specified in the maintenance manual. We’ve calculated the cost—the lifetime maintenance cost per car is about 8,000 yuan. But if those 8,000 yuan can earn the trust and word-of-mouth of the owners, it’s worth it.”

”The Intelligent Driving Assistance Package was co-developed with Spark’s Intelligent Driving Department. Although it’s only Level 2, the level of completion is very high. The reason it’s limited is due to the tight supply of sensors in the early stages. But I promise that even for those not in the first ten thousand, the subsequent installation price won’t exceed 15,000 yuan.”

He walked to the stage edge and looked at the audience. ”I know many people are still waiting and watching. That’s fine; a car is a major purchase and should be considered carefully. But I just want to say one thing—give Red Flag a chance, and you’re also giving China’s auto industry a chance. This car might not be perfect, but it is sincere enough.”

The big screen switched to a real-time order map. It was a map of China, and for every order, a star would light up in the corresponding province.

”The order system is now open,” Zhou Qingyu said. ”Let’s see how many people are willing to join us in restarting Red Flag’s journey.”

In the first minute, a dozen or so stars lit up sporadically on the map.

In the second minute, dozens.

In the fifth minute, hundreds.

In the tenth minute—

”Orders have exceeded 5,000 units!” a staff member reported excitedly.

On the big screen, the numbers jumped: 5001, 5002... the speed getting faster and faster.

The eastern coastal provinces were already lit up in a sheet, stars were scattered across the central region, and the west began to flicker as well.

Zhou Qingyu looked at the screen and let out a long breath. His palms were covered in sweat, but a genuine smile appeared on his face.

”Thank you.” He bowed deeply to the audience. ”Thank you to everyone who chose to trust us. Red Flag will never betray this trust.”

The launch event ended at 4:30 PM, but the impact was only just beginning.

At 7:00 PM that night, the trending topics list was dominated by Red Flag:

#Red Flag H9 150k# (Explosive)

#Zhou Qingyu’s Honest Talk#

#Red Flag Lifetime Free Maintenance#

#From National Car to People’s Car#

On WeChat Moments, that side-profile photo of the Red Flag H9 was being shared frantically, mostly with captions like: ”Is this really a Red Flag?”, ”The design is god-tier,” ”Price butcher.”

The shock within the industry was even greater.

In the Geely Auto executive Feixin group, messages were flying until dawn:

”President Li, with Red Flag’s pricing, we need to reconsider the pricing strategy for our Emgrand GL.”

”The configuration is indeed brutal; making ESP standard across all models is too painful.”

”How are they controlling costs? Lifetime maintenance!”

Volkswagen China held an emergency meeting overnight. The first sentence of the meeting minutes was: ”The Red Flag H9 may become the first real threat to the lavida in the Chinese market.”

Toyota China’s Marketing Director wrote in an email: ”Please pay attention to Red Flag’s hybrid technology path. Although it’s only a 48V mild hybrid, the fuel consumption data is very impressive. If the reliability holds up, it will divert customers from the Corolla Dual Engine.”

In Shenzhen, Su Chen sent a text message after the launch: ”Well said. But for the next three months, delivery and quality will be the real test. I’ll be waiting for your first report card in Shenzhen.”

Zhou Qingyu replied: ”Understood. I will personally oversee the first batch of cars.”

At 11:00 PM, the exhibition hall had been cleared.

Staff were doing the final tidying up, preparing to close. While patrolling, a security guard found that one person hadn’t left yet.

It was the old craftsman, Master Ma.

He sat alone in the driver’s seat of the display car. Without turning on the lights, he gently stroked the steering wheel by the light of the streetlamps outside. His fingers traced the Red Flag hood ornament, the curve of the dashboard, and every button on the center console.

The security guard walked over. ”Old Master Craftsman, we’re closing up.”

Master Ma looked up, his eyes shining in the dimness. ”Let me sit for a bit longer... just a bit.”

The guard recognized the old master, nodded, and stepped back.

Master Ma leaned back into the seat. He closed his eyes, and it was as if he could hear the sounds from the workshop half a century ago—the clanging of hammers, the hiss of electric wrenches, the shouts of the old masters, and the song ”We Workers Have Strength” playing over the radio.

Then he opened his eyes and looked at the modern car before him.

It was different; everything had changed.

But some things hadn’t.

He pushed open the car door and slowly walked out. Before leaving, he took one last look back at the silver-gray Red Flag H9. The car body shimmered faintly in the moonlight, like a ship about to set sail.

”This car,” he said softly, as if to himself, or perhaps to someone else, ”has the right feel.”

The feel of Red Flag, the feel of China, the feel of building cars with sincerity.

It’s back.