Chapter 1170: Improving the Automotive Industry System

"Ah Yu, you're here, come on in.'

In front of the Bao family mansion, after Xia Yu's car entered, Bao Yugang and Huo Yingdong came out together after being notified to welcome Xia Yu.

'Looks like I'm the last one here again, I kept you waiting,'

Xia Yu said with a smile.

'It's no big deal, it's already the end of the year, there are all kinds of financial reports to look at, and all kinds of meetings to hold, I'm all dizzy every day.'

'Your company is much bigger than both of ours, I understand.'

Bao Yugang laughed loudly, taking the initiative to explain for Xia Yu.

Huo Yingdong on the side nodded with a smile and added, 'Bao is right.'

'Let's go in and talk.'

...

With laughter and conversation, the three of them entered the living room and sat down, chatting over tea before dinner.

Of course, when they say chatting, the conversation really mainly revolved around Xia Yu.

'Ah Yu, your Tiangong Motors has really boosted the morale of the Chinese people. We are finally going to have a world-class car company in Hong Kong!'

'Yes, at the Geneva International Motor Show, it received orders worth two billion US dollars. This year is just the beginning, so how about this year's sales? Tiangong Motors' sales will exceed ten billion US dollars!'

'According to this development trend, next year Tiangong Motors Group will become the largest company in Hong Kong.'

'...'

The two men spoke one after the other, sincerely congratulating Xia Yu on the achievements of the Tiangong Motors Group and feeling happy for Xia Yu.

Xia Yu laughed helplessly, 'Lao Bao, Lao Huo, you are flattering me so much that I feel like I'm going to float away.'

'Tiangong Automobile Group still has a long way to go. The foundation of the automobile industry in Xiangjiang is too weak. It is difficult for Tiangong Automobile Group to thrive in Xiangjiang!'

'You may not have noticed, but the island country's annual car production last year was more than 11.5 million vehicles, accounting for more than 30% of the world's total car production and ranking first in the world.'

'My Tiangong Automobile Group, if placed in the island country, would not even be able to enter the top ten, let alone the automobile industry chain in Xiangjiang.'

Speaking of this, Xia Yu was very helpless, because this was the current situation in Xiangjiang.

It can be said that the existing automobile industry system in Hong Kong was basically built by him.

Since the establishment of the Yuen Long Science and Technology Industrial Park in May of the year before last, in addition to directly establishing the Tiangong Automobile Group, he has also invested in and set up factories here for the Rolls-Royce Motor Group.

In addition, many automobile parts companies under the Rolls-Royce Motor Group, such as Magna International Inc. of Canada and TI Automotive Systems Inc., have also come to Hong Kong to set up factories to support the production of the two automobile companies.

However, the Rolls-Royce Motor Cars Group cannot be at the forefront of every field of auto parts in the world, so it needs to purchase parts from other companies and ship them to Hong Kong for auto assembly and production.

This has inevitably increased transportation costs.

Of course, the good news is that there are no tariffs in Hong Kong, so the lack of import tax on auto parts and the tariff cost of exporting finished vehicles has allowed Tiangong Motors Group to maintain a high enough profit margin.

But in any case, importing parts from other countries and transporting them here is ultimately too much trouble.

However, now that Tiangong Automobile Group is famous, other auto parts manufacturers from other countries will definitely come to set up branches in the Yuen Long Science and Technology Industrial Park. But in order to achieve a strong enough cluster effect, it will require a lot of manpower and resources. After all, Xia Yu doesn't want to waste time waiting.

Seeing Xia Yu's helpless expression, Bao Yugang and Huo Yingdong exchanged glances. Bao Yugang looked solemn and said solemnly, 'Yu, I asked you to come over tonight because I want to talk to you about this.'

Xia Yu froze for a moment, looked at Bao Yugang and Huo Yingdong, sat up straight, and said seriously, 'Bao, Huo, you might as well just say it.'

Because the other day Bao Yugang and Huo Yingdong had genuinely only congratulated him and not asked anything else, he really had no idea what the purpose of tonight's gathering was.

Now that he suddenly heard it, Xia Yu was instantly interested.

Bao Yugang also did not hide it, saying, 'A Yu, in fact, ever since we worked together to suppress the real estate market, I have been pondering the future direction of development.'

'Then the year before last, you proposed the strategic development direction of 'one core, six pillars', and at that time I had a clearer idea.'

'Especially last year, I also got involved in the financial industry, machinery manufacturing industry, trade industry and biopharmaceutical industry, and invested a lot of money.'

'It's just that the machinery manufacturing industry has not set foot in the automotive field.'

'The automotive industry has a huge system. As far as vehicle manufacturing is concerned, I can't handle it, and I don't have the ability. Xiangjiang has Tiangong Automobile Group, which is enough.'

'But I have specifically looked into it, and there are thousands of different parts in an automobile, from the chassis to the smallest screw. The entire automobile manufacturing industry chain is very long.'

'The main assemblies such as the engine, transmission, axles, and body are manufactured by the automobile manufacturing company itself, but there are also specialised companies that produce tyres, glass, electrical appliances, body interior parts, and other small parts.'

'I just want to ask, is it suitable for Lao Huo and me to enter the field of automobile parts production? Do you have any plans in this regard?'

As soon as Bao Yugang finished speaking, Xia Yu said without hesitation, 'Of course it's suitable.'

'Bao, Huo, you don't need to worry about anything, even if you want to enter the field of vehicle production, it's fine. The Xiangjiang automobile market can't be that big, and the main competition is with outsiders. I'm not that petty.'

Huo Yingdong then smiled and said, 'Yu, we know our limitations. The automobile manufacturing industry is not something that can be done with just money. We don't have your abilities, nor your connections.'

Bao Yugang nodded and said, 'That's right, not to mention that we don't have the ability, but also, I was thinking that instead of wasting money on internal competition, it would be better to maximise the benefits of limited funds, so I was thinking of setting up a parts production company.'

Seeing that Bao Yugang and Huo Yingdong didn't seem to be joking, Xia Yu didn't mention it in that direction again.

However, Xia Yu fully supported Bao Yugang and Huo Yingdong's desire to enter the field of auto parts production.

He was not naive enough to think that he could single-handedly take over the entire future automobile industry system of Xiangjiang.

It was not something that one person could handle!

He said with a smile, 'Lao Bao, Lao Huo, your desire to enter the field of automobile parts production is absolutely a great help to me. Who's products would I buy? I would feel more at ease buying yours!'

'It is very difficult for Xiangjiang to build a complete automobile industry system, but as long as we can produce most of it ourselves, that would be enough.'

'If you want to enter the market, I think the best way is to directly acquire some small and medium-sized auto parts manufacturers abroad, or purchase certain technologies and production lines, and then invest in building a factory in the Yuen Long Science and Technology Industrial Park. This will be much faster.'

'As long as they can produce, they can directly meet our procurement standards, without wasting time on research and development from scratch.'

'Let me tell you, I have received a lot of calls in the past few days, all wanting to enter the auto parts manufacturing sector.'

'But with your strength and our relationship, you can definitely come in and eat most of the meat, and keep the profits for yourselves!'

Xia Yu's words were sincere, and his welcome to Bao Yugang and Huo Yingdong was obvious, and he even gave them some guiding hints.

Bao Yugang and Huo Yingdong were overjoyed.

The two of them successively promised.

'Yu, then we'll just work under you for a living, but I can also assure you that I will never deliver substandard products to your factory. Even if the company goes bankrupt, I won't be a drag on you!'

'That's right, that's what I mean, I definitely won't be a drag on Tiangong Automobile Group!'

'I can't doubt your character. With a stable supply of products from you, I couldn't be happier, so why would I say something like that?'

Xia Yu said with a faint smile.

'Hahaha...'

Bao Yugang and Huo Yingdong couldn't help but laugh.

Before long, dinner was ready, and everyone sat down together. During the meal, they toasted each other and appeared to be having a good time.

After dinner, Xia Yu and the others once again had tea and took a break, returning to the topic they had been discussing before dinner.

However, they discussed it in greater detail, and Xia Yu gave Bao Yugang and Huo Yingdong a lot of advice.

Bao Yugang and Huo Yingdong discussed the idea of initially operating in separate fields, and then considering a merger when their respective companies grew and reached the boundaries.

Bao Yugang and Huo Yingdong also strongly invited Xia Yu to invest together, and Xia Yu refused repeatedly. In the end, unable to resist their strong invitation, he agreed to each invest 30% as a tie for cooperation, without interfering with their absolute control and management of the company.

Now that the real estate market in Xiangjiang has been depressed, Bao Yugang and Huo Yingdong have paid a lot. As the two diehards of Xia Yu, Xia Yu also has to leave them enough room in the market to develop.

Furthermore, the global automotive market is too big, a trillion-dollar market, and the future goal of Tiangong Automobile Group is to become the world's number one vehicle manufacturer.

If Bao Yugang and Huo Yingdong's auto parts company is tied up with Tiangong Automobile Group, it will indeed rise faster in the early stages, but it will also lead to a significant drop in the ceiling of development due to its relationship with Tiangong Automobile Group.

He already has very strong auto parts manufacturers such as the Canadian Magna International, and there is no need to forcefully tie Bao Yugang and Huo Yingdong together and limit the two men's future.

Therefore, Xia Yu also did not intend to let Tiangong Automobile Group intervene in the two men's company, and was prepared to invest in the name of other companies, leaving the overt relationship aside.

Of course, workers can be trained up relatively quickly, but research and development talent in the automotive field is very rare, and the strength in this area determines the future of the Xiangjiang automotive industry.

Therefore, Bao Yugang proposed that the scale of talent cultivation be expanded as soon as possible.

Although the Hong Kong government has already introduced policies to vigorously support the education industry in Hong Kong, it is preparing to build a new Hong Kong University of Science and Technology and Hong Kong City University of Science and Technology, and reform the old Hong Kong Polytechnic University, renaming it Hong Kong University of Science and Technology.

The Hong Kong government has made great moves, but due to financial issues, it will take a relatively long time to see results.

Therefore, Bao Yugang suggested that Xia Yu's Jiuding University continue to expand, focusing on cultivating talent in heavy industries such as automobiles and machinery manufacturing.

Xia Yu happened to have the same intention, and immediately decided to let Jiuding University open a branch in the New Territories, near the Yuen Long Science and Technology Industrial Park, to create an integrated model of industry-university-research.

After Xia Yu had stated his intentions, Bao Yugang and Huo Yingdong immediately said that they would each support the construction of the school with 100 million Hong Kong dollars, which Xia Yu did not refuse.

When powerful tycoons like them do things, they are always incredibly efficient.

After the deal was done that night, Bao Yugang and Huo Yingdong got to work the next morning. They planned to come up with a complete plan before the Chinese New Year and get started right after the holiday to help Tiangong Automotive Group as soon as possible.

Xia Yu immediately went to find the president of Jiuding University, Wang Gengwu, and told him about the plan to build a branch campus of Jiuding University in the New Territories. Wang Gengwu gladly accepted the task and hurried back to the university to discuss the matter, planning to come up with a practical plan for building the campus as soon as possible and strive to have the New Territories branch campus completed and ready to enrol students this year.

Three days later...

As the asset sorting work drew to a close, Xia Yu finally had a clear idea of his current strength.