Tech Giants: Starting from Bankrupt Companies

99: Chapter 99 The Smoke of Battle in the Automobile MarketSeptember 11th, 10:00 AM, Volkswagen China’s official website updated.

Homepage banner ad: ”German Quality, National Price—Official Price Drop for the Entire lavida Series!”

The original starting price of 147,900 yuan was slashed directly to 129,900 yuan. A reduction of 18,000 yuan, along with promotional policies like ”three years zero interest” and ”8,000 yuan trade-in subsidy.”

The slogan was blunt to the point of being crude: ”Same money, buy a bigger brand.”

A single stone stirred up a thousand waves.

Headlines of automotive media were instantly occupied by this news. Friends’ circles, Chinese microblogging platform, and car groups—everyone was discussing: What is Volkswagen trying to do?

The answer was revealed within twenty-four hours.

September 12th, Nissan Sylphy followed suit. The original starting price of 133,900 yuan dropped to 119,800 yuan, a reduction of 14,100 yuan. Slogan: ”The King of Family Sedans, Redefining Cost-Performance.”

September 13th, BYD Qin hybrid version launched the ”Champion Edition” with a starting price of 99,800 yuan. This price shocked the entire industry—a hybrid car selling for less than a fuel car of the same class. BYD’s press conference directly called out: ”The era of hybrids should not be an era of high prices.”

September 14th, Geely Emgrand ”Champion Edition” hit the market, with an on-the-road price of 89,900 yuan for the fuel version. Geely’s sales general manager smiled at the press conference and said: ”For 90,000 yuan, drive away a champion family sedan. We want the common people to spend the least money and drive the best car.”

Great Wall Motor and Changan Automobile announced price cuts simultaneously that afternoon. The entire A-segment car market entered the ”100,000 yuan life-and-death line” overnight—if it costs more than 100,000, there must be enough reason to convince consumers.

Meanwhile, the pricing for the car model was 149,800 yuan.

Pressure like a collapsing mountain weighed down on Changchun.

September 12th, 3:00 PM, emergency meeting at Red Flag headquarters.

The meeting room was filled with smoke—despite a smoking ban, several middle managers couldn’t help but light up. Zhou Qingyu sat at the head, his face as gloomy as the sky before a storm.

Marketing Director Wang Lei pointed at the projection screen, his voice trembling: ”President Zhou, this morning, we received over three hundred cancellation calls. All for the same reason—’The Volkswagen lavida is only 130,000, why should I spend 20,000 more on a Red Flag?’”

Sales Director Li Qiang added: ”The pressure on the dealers’ side is even greater. Customers who originally paid deposits are now in a wait-and-see mode. Some directly said, ’I’ll pick up the car when you lower the price.’”

”What about our order data?” Zhou Qingyu asked, his voice relatively calm.

”Firm orders are at 48,000 units, down 2,000 from the day before yesterday.” Wang Lei pulled up a chart. ”The cancellation rate is four percent and still rising. The biggest problem is new orders—only 300 yesterday, while it’s usually at least 1,000 a day.”

A dead silence fell over the meeting room.

Outside the window, Changchun was overcast, and an autumn rain was about to fall. This old industrial city was once the cradle of Chinese automobiles, but now it had to survive in the most brutal market competition.

Zhou Qingyu stood up and walked to the window. He looked at several H9 test-drive cars parked in the lot below; their silver-gray bodies still shone in the gloomy light.

”Let them lower their prices.” He turned around, his voice not loud, but every word was clear. ”We will proceed as planned.”

”But President Zhou—” Wang Lei grew anxious, ”The price difference is 20,000 yuan! Consumers are very realistic!”

”So we need to tell them where that 20,000 difference is.” Zhou Qingyu walked back to his seat and pulled up another set of data. ”Out of the 50,000 firm orders for the H9, the CVT version accounts for 70%. User profile: 68% are aged 25 to 35, and 82% are first-time buyers. Market research shows that H9 users value three things most: Red Flag brand sentiment, lifetime free maintenance, and fuel consumption performance.”

He paused, his gaze sweeping over everyone. ”What does this show? It shows that our target customers aren’t those who only compare prices. They are willing to pay for sentiment, for service, and for technology.”

”But can sentiment put food on the table?” Production Director Old Chen said dully. ”President Zhou, I’m not trying to dampen the mood. But the factory has already started three shifts, with workers working twelve hours a day just to catch the first batch of deliveries on October 20th. If the cars are built and no one buys them, piling up in the parking lot...”

”There will be buyers.” Zhou Qingyu interrupted him. ”But the premise is that we cannot panic ourselves.”

He announced the decision: ”First, the price remains unchanged. Maintain 149,800 and 156,800 yuan. Second, increase the benefits—the first 50,000 owners will receive a ’Smart Connectivity Service Package’ worth 3,000 yuan, with free data for five years. Third, continue to accelerate production capacity to ensure the first batch is delivered on October 20th, not a day late.”

”Fourth—” He looked at the marketing department, ”Produce a ’Cost Transparency’ video. Break down the H9’s mild hybrid system, list the suppliers of the body steel, and lay out the cost composition of every single component. Let consumers know why this car is worth 150,000.”

Wang Lei’s eyes lit up. ”This works! We can do the math—the gross profit margin for the entire H9 is about 20%. Whereas joint-venture cars are usually between 25% and 30%. Although our pricing is higher, our profit margin is actually lower.”

”Do it.” Zhou Qingyu made the final call. ”The video must be online by tomorrow morning. Post it on Douyin, Bilibili, and Autohome. Find a hundred automotive KOLs to repost it simultaneously.”

The meeting ended in a heavy atmosphere. People left one after another, until only Zhou Qingyu remained.

He sat back in his chair, covering his face with his hands. The rain outside finally fell, tapping against the glass with a rhythm as dense as drumbeats.

His phone rang. It was Su Chen.

”Qingyu, I know the pressure is high.” Su Chen’s voice came from Shenzhen, thousands of miles away, calm yet powerful. ”But remember—Red Flag’s first battle isn’t about price; it’s about value.”

Zhou Qingyu smiled bitterly. ”President Su, value is sometimes very pale in the face of cold, hard cash.”

”So we have to make that value visible.” Su Chen said. ”If you drop to 130,000 today, your competitors can drop to 120,000 tomorrow. The Red Flag brand would never be able to rise again. Once the ’cheap’ label is attached, it’s hard to tear off.”

He paused. ”I’ll give you two forms of support. First, the Xinghuo Chip team will send ten people to assist in optimizing the H9’s in-car system. The automotive-grade chips for the Flint architecture are already in Tape-out and can be equipped on the updated H9 next year. Second, if monthly sales fall below 8,000 units, the group will cover half of the losses.”

Zhou Qingyu was stunned.

Spark Group spent 12 billion acquiring Red Flag, and the subsequent renovation and upgrade investment was another 8 billion. Now that the car market war had begun, Su Chen not only didn’t apply pressure but instead took the initiative to offer a safety net.

”President Su...” Zhou Qingyu’s voice choked up slightly. ”I don’t want a safety net. Red Flag must stand on its own. You’ll see, after the October delivery, the reputation will speak for itself.”

There was silence on the other end for a few seconds.

”Good.” Su Chen said only one word. ”I believe you.”

After hanging up, Zhou Qingyu sat in the meeting room for ten minutes. Then he got up, went downstairs, and drove straight to the factory.

The Changchun Red Flag Factory was once the largest automobile manufacturing base in Asia. At its peak, there were 50,000 workers, with five hundred cars rolling off the line every day. Later it declined, most production lines stopped, the factory grounds grew grass, and equipment rusted.

Until Spark Group took over.

Four months of renovation and an 8 billion yuan investment made the old factory look brand new. Automated production lines were running again, robotic arms waved with precision, a large amount of high-end equipment entered the field, and workers wore brand-new uniforms with long-lost smiles on their faces.

A giant slogan at the factory entrance: ”Fight for 100 days for 50,000 owners!”

Zhou Qingyu walked into the final assembly workshop. It was brightly lit, with all three production lines open. The H9 body frames moved slowly on the conveyor belts, and workers were busy at their respective stations.

He spotted Master Ma at a glance.

The sixty-five-year-old Old Master Craftsman wore a specially made red uniform—the mark of a rehired expert—and paced along the production line with his hands behind his back. He walked slowly, each step as if measuring the ground, his eyes scanning every car like searchlights.

Zhou Qingyu walked over. ”Master Ma, how are things today?”

Master Ma saw him, nodded, then shook his head. ”President Zhou, there’s a problem.”

”Tell me.”

”This batch of door seals has an assembly gap that’s out of tolerance.” Master Ma pointed to a car in the middle of the production line. ”The standard is 2.0 mm plus or minus 0.3 mm, but I measured three cars, and they were all 2.8 mm. That’s 0.5 mm out of tolerance.”

Zhou Qingyu frowned. ”Does it affect the seal?”

”Not for now,” Master Ma said. ”But when it rains hard, there might be wind noise. More importantly—a Red Flag car’s stitching should be aligned, and the door-closing sound should be solid. With this 0.5 mm difference, the feel just isn’t right.”

He looked at Zhou Qingyu, his eyes like an eagle’s. ”This batch of cars cannot roll off the line.”

Production Director Old Chen hurried over. Hearing this, his face turned pale. ”Master Ma, there are three hundred cars in this batch! If the production line stops, the daily loss is millions! And the delivery date...”

”Is the delivery date more important, or is the car more important?” Master Ma asked back, his voice not loud but powerful. ”I entered the factory at sixteen. The first thing my master taught me was: Red Flag cars bring honor to the country. Every one that drives out represents the level of Chinese car manufacturing. A 0.5 mm difference might be fine in others’ eyes, but here with me, it’s not okay.”

Old Chen was about to argue further, but Zhou Qingyu raised his hand to stop him.

He walked to that car, crouched down, and carefully looked at the door gap. Indeed, the unevenness was visible to the naked eye. He tried opening and closing the door—the sound wasn’t muffled enough, it felt a bit ”thin.”

”Rework this batch.” Zhou Qingyu stood up, his voice decisive.

”President Zhou!” Old Chen was frantic. ”The schedule...”

”I’ll find a way for the schedule.” Zhou Qingyu looked at Master Ma. ”Master Ma, you’re right. Red Flag cars cannot be compromised. How long will it take to rework this batch?”

Master Ma thought for a moment. ”Remove all the seals and reinstall them. Two hours per car. Three hundred cars, three days.”

”Good, three days it is.” Zhou Qingyu turned and instructed, ”Adjust the production plan; let the subsequent vehicles go first. Set up a separate rework line for these three hundred units. Master Ma, you’ll be in charge.”

Master Ma nodded vigorously, his eyes shining.

Zhou Qingyu then said to Old Chen: ”I’ll bear the losses. But you must remember—if you let 0.5 mm slide today, you’ll let 1 mm slide tomorrow. That’s how the Red Flag brand is ruined bit by bit.”

Old Chen fell silent and finally nodded. ”I understand, President Zhou.”

Rework began that very night. Master Ma personally led the team, and twenty of the most experienced old workers set up temporary stations in a corner of the workshop. They removed the door interior panels, took out the deformed seals, replaced them with new ones, reinstalled them, adjusted the gaps, and tested the door-closing sound.

Zhou Qingyu didn’t leave. He pulled up a chair and sat nearby to watch.

At 11:00 PM, the first car was successfully reworked. Master Ma pulled the door open and shut it with a ”thud”—the sound was low and solid, like the sound of a hardcover book closing.

”That sound is right.” Master Ma smiled, wrinkles blooming on his face.

Zhou Qingyu smiled too.

That night, the Changchun factory was brightly lit. The production line was running, and the rework line was also running. Young workers watched those white-haired Old Master Craftsmen, each crouching in front of a car door, adjusting every millimeter of the gap as if they were handling a work of art.

Someone whispered, ”Is it really necessary? It’s just 0.5 mm.”

An old worker nearby heard him and glared. ”Kid, do you know why Red Flag is called Red Flag? Not because it’s red, but because it never settles.”

At 3:00 AM, Zhou Qingyu was still in his office. He opened his computer and watched the ”Cost Transparency” video the marketing department had just uploaded.

The video was made with great care. It started with the disassembly of the 48V Mild Hybrid System, went through tensile tests of the body steel, wear resistance tests of interior materials, and a point-by-point display of the supplier list. Finally, it did the math: the material cost per H9 unit was 102,000 yuan, R&D allocation 15,000, manufacturing cost 8,000, marketing and management cost 5,000, for a total cost of 129,000. Selling price 149,800, gross profit 20,800, and a profit margin of 13.88%.

In contrast, joint-venture cars usually had profit margins of over 20%.

The video’s closing words were: ”We believe that sincerity can be seen.”

Zhou Qingyu clicked publish.

Then he turned off the computer and lay on the office sofa, sleeping in his clothes. Outside, the autumn rain in Changchun was still falling, but the lights in the factory remained on all night.