Chapter 234: Trick Him In First
Oda couldn't understand what the Indians were thinking. Didn't they want technology? Advanced CRT technology.
This is the bait he specially brought out, and any ambitious company will not refuse it.
"Mr. Oda, perhaps you don't know much about India," Ron said calmly in the conference room, "It's different here from Japan."
"Don't you want to build your own color TV production line? NEC can provide the most advanced technology."
"Okay, since you insist, let's talk about the conditions of NEC first." Ron knew that these guys wanted to show off their technical skills.
"Can I borrow your socket?"
"certainly."
At Oda's signal, someone in the other team brought a box from somewhere.
They unpacked it in front of Ron and brought out an unusually thin TV, about the thickness of a slice of bread.
Ron raised his brows slightly, while Ashish and the others were stunned.
It's too thin. Compared with the big-butt CRT TV, it's completely a product of two different eras.
These Japanese were very well prepared. In addition to a television, they also had a VCR for playing videotapes.
There are even voltage adapters. Japan's 110V mains electricity and India's 220V mains electricity cannot be directly used.
What happened next was just as Ron expected. The NEC people demonstrated their latest imaging technology on the spot.
"This is the industry's first true-color active-matrix liquid crystal display, using NEC's unique display technology." Oda's voice was full of confidence.
Sure enough, when the screen lit up, everyone in the conference room was drawn to it.
Ashish and other country bumpkins even trembled slightly. The ultra-clear and bright colors were too shocking for them.
"How is it?" Oda looked smug.
"That's really impressive." Ron nodded.
"LCD is the industry's cutting-edge technology. It's the future! We can help Sur Electronics become India's top-tier TV manufacturer. No one will be able to compete with you."
"What are the conditions?" Ron asked calmly.
"As the fax said, NEC will invest its technology, and you will invest 10 million US dollars to establish a joint venture." Oda said with a smile.
"Technology investment?"
"Yes, LCD technology is valuable. NEC holds at least a 75% stake in the joint venture; that's our bottom line."
This. Ashish and the others looked solemn. Is the price too high?
But it is LCD after all, it is fascinating.
Oda was full of confidence. He firmly believed that NEC's technology was like a bomb for Sur Electric.
Everyone in the conference room turned to look at the main seat, but Ron suddenly smiled.
"How about we talk about CRT TVs?"
"What?" Oda was stunned.
"I just have one question," Ron looked at him. "How much does this TV cost?"
"It's a bit pricey at around 300,000 yen, but LCD is a groundbreaking technology."
"300,000 yen, which is about $3,000," Ron turned to Ashish and asked, "What's the average salary in India?"
"1,000 rupees, 32 dollars."
"What?!" Oda couldn't hold it in anymore.
"Look," Ron spread his hands, "100 times, that's almost impossible."
Which country in the world would be willing to spend 100 times their monthly salary to buy a TV?
Pre-consumption is not that excessive.
In many cities, a monthly salary of 100 times may be enough to buy an apartment.
"But it can serve as a technological reserve. The cost of LCD TVs will inevitably decrease in the next few years, and the Indian market will have developed rapidly by then." Oda still hasn't given up.
"It's too early," Ron shook his head. "Indians don't need such advanced televisions."
"Mr. Soul, you underestimate the speed of technological iteration and update."
"No, like I said, this place is different from Japan. No one knows India better than me." Ron said shamelessly.
"That" Oda suddenly felt a little ridiculous.
In other countries, peer companies are drooling over NEC's technology.
They tried their best to please NEC in the hope of obtaining technical support from NEC.
India is so bad that it doesn’t even eat the meat that is right in front of its mouth. It’s such a waste!
"CRT TVs are the future of India. Let's talk about it." Ron said with a burning look in his eyes.
"I wonder what you think?" Oda said with little interest.
"Is NEC willing to sell its production line? Both black and white and color."
"Black and white TVs have been eliminated by NEC," Oda said disdainfully. "Only the University of Tokyo has those crappy ones."
"What about the colored production line?" Ron continued to ask.
"Color?" Oda's eyes rolled. "We can consider transferring the color CRT TV production line, but we still have to follow the proposal just now."
"Joint venture?" Ron's eyes flickered.
"It's still a technology investment. You will invest $5 million and NEC will hold a 60% stake."
"Two million dollars for a 70% stake in Sur Electric," Ron bargained.
"NEC's color TVs are on par with Sony's Trinitron. This asking price is outrageous!"
"We are also talking to Sony."
"What!" Oda raised his voice.
"Like you said, CRT color TVs aren't advanced technology. Too many manufacturers have mastered it."
"NEC will not only provide the production line, but we will also be responsible for the training of Sur Electric's workers. I think everyone should take a step back and each hold 50% of the equity. This is NEC's bottom line!"
"If NEC agrees to license technology to Sur Electric for key components like cathode ray tubes, we can reduce our shareholding to 60%."
“We cannot accept such an offer.”
"Mr. Oda," Ron reminded him, "this is the biggest concession we can make, because Indian law restricts this."
"What?" Oda was puzzled.
"According to the Foreign Exchange Management Act, foreign investment in a joint venture cannot exceed 40%." Ron spread his hands.
Xiao Rizi and his friends looked at each other in bewilderment. They thought that India had liberalized its policies and that this was a free economic market.
"Of course, as compensation, Soul Electric will bear all training costs, including the expenses of Japanese personnel."
"We need to discuss this." Oda turned around and muttered to the people around him.
NEC has never simply wanted to sell production lines; they are eyeing the vast market of nearly 1 billion people in India.
They know that India is poor, but if only one-tenth of the population has demand, it will represent an extremely large market.
Therefore, establishing a joint venture is an inevitable choice, and NEC will not be so short-sighted as to only make a one-time transaction.
Besides, it was just a CRT TV production line, not really cutting-edge technology. NEC already had five or six competitors in Japan.
Sur Electric is definitely not just contacting them. If South Korea is included, NEC has even more competitors.
Liquid crystal is the future, and Oda predicts that this technology will be officially available in two years.
CRT, another technology that is about to be eliminated.
“We agree to this share allocation, but before technology transfer, the joint venture company needs to conduct a two-year procurement of core components.
After the expiration of the contract, we will authorize key technologies such as cathode ray tubes. In addition, in the newly established joint venture, a Japanese person must serve as the chief technical officer.
The calculations for daily life were clattering. The technology licensing was possible, but it would have to wait two years.
The core components used in the early production lines could only be imported from NEC in Japan.
Well, this is to take away the bulk of the profits from color TVs and let the joint venture work for it for two years for nothing.
Ron knew what was going on, but he still agreed.
"no problem."
"Well, Mr. Soul," Oda stood up and extended his hand with a smile on his face, "Happy cooperation!"
"Welcome to India!" Ron shook his head.
The two parties reached a preliminary cooperation intention, one provided money and the other provided technology, and everyone was happy.
The people at NEC were very happy because they took over the Indian market without spending a penny.
Ron was also very happy, as he had finally tricked someone in.
As long as the conditions weren't excessive, he agreed. He would let the people in first, and then deal with the whole job.
The initial negotiations were completed in just one day, and the NEC staff were beaming with joy. They had completely changed their serious demeanor during the initial meeting and were now eager to experience the charm of India.
That's easy. Ron just asked someone to take them to a high-end bar where there were plenty of call girls.
Alas, it’s a pity that he set the palace on fire, otherwise these little guys would have been able to open their eyes.
Oda had a lot of fun and even laughed at the stupidity of Soul Electric in Japanese in the bar.
Most of the $2 million investment will be used to purchase NEC's color TV production line.
The deal itself wasn't a loss-making one, and as a result, they still owned 40% of the shares in the newly established company.
This is a complete gift, a market of nearly one billion people is waiting for them.
As for the promised cathode ray tube technology, it’s not that Oda looks down on Sur Electric, but no one in India can make this thing.
What good would it do to give it to them? It would be impossible for this country to achieve self-production within five years.
Besides, it’s not free, there are a lot of hidden licensing fees waiting for them.
The chief technical director is also from Japan. NEC has countless ways to delay Sur Electric's independent research and development.
In the end, the company could only rely on NEC and let them control it.
A great victory! The little ones are very proud.
"Boss, aren't today's negotiations too fast? We can still strive for more favorable conditions." Ashish always felt that Sur Electric would suffer if it agreed to the Japanese so easily.
"They have the same idea as us, to get something for nothing." Ron laughed.
"You know?"
"Any fool can see it. Maybe they are laughing at us right now."
"Boss, how are you going to deal with them?" Ashish's eyes sparkled.
"No rush, what we want is the TV production line. We'll talk about it after we get it."
Did he really think he didn't know the Japanese were up to no good? He knew there were countless tricks waiting for him.
The procurement of core components and technology licensing alone present numerous pitfalls. Who would honestly hand over technology to someone else, not even a partner?
If Sur Electric grows stronger, what will NEC do? In all likelihood, they will use this as a handle to make things difficult for him.
Exchanging technology for market, this tactic has already been used to great effect by the Japanese in a certain big country in the East.
Xiaozi was sure that the other party was determined to get the technology, so not only did he impose all kinds of unfair terms, he also never treated them well in his daily work.
The Japanese are addicted to being the boss and are planning to do the same in India.
Haha, does Ron care whether India’s technology is backward or not?
Innocent!
When NEC comes in, we will give them the Indian package no matter what.
“Ashish, we should send someone to Dongda.”
"where?"
"East," Ron tilted his head. "You don't really think Soul Electric is going to focus on color TVs next, do you?"
(End of this chapter)
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