The price was also driven down, and the profit margin decreased significantly, but the sheer volume made up for it!
"Of the 118 VCTP infantry fighting vehicles, we are willing to upgrade the firepower of 100 of them that are in better condition."
Alfredo finalized the figures for the deal; the remaining 18 vehicles could be salvaged for parts or kept as training vehicles for the military academy, and there was no need to upgrade them all.
As for whether to modify the RH202 autocannon discarded by VCTP into a BTR-82S, Afica, whose per capita GDP ranks second in the world, simply doesn't care about such a fragile infantry fighting vehicle.
The wheeled combat platforms they tender for must, at the very least, be equipped with 30mm cannons, just like the upgraded VCTPIIS, and ideally, the ammunition should be interchangeable.
"With part of the payment for the RH202 autocannon deducted and the power system remaining unchanged, the upgrade cost for each vehicle can be reduced to $2.2 million."
After doing some calculations in his mind, Xia Yu gave a price quote for the bicycle.
After all, he needed 100 brand-new MK302/ABM machine guns. This couldn't be solved by simply printing them out or by using the excuse of buying loose parts from the market. He had to actually purchase these 100 machine guns from Rheinmetall.
Then there's the Kornet anti-tank missile. A single-soldier version, including the missile and launch system, costs over ten thousand dollars, and the missile itself costs tens of thousands of dollars per missile.
Therefore, the price for integrating the anti-tank module is 500,000. Considering that the military budget of the three armed forces is about 4 billion yuan a year, Xia Yu estimated that it is impossible to have all the top-of-the-line firepower.
"Um, Mr. Sherlock, what is the price of a single vehicle without the anti-tank module?"
Alfredo asked, with a slight hesitation.
1.7 million
Hearing the price, he breathed a slight sigh of relief, because Xia Yu hadn't asked for something unreasonable.
If Rheinmetall were to handle this order, the starting price would be 2 million, and they could only integrate the long spikes; they would never provide the raw parts. Only a third-party company like Jihuo Defense would offer customized services.
"If we want 50 standard models and 50 anti-tank models, could the price be reduced further?"
Alfredo continued to inquire.
In other words, on top of the $195 million already calculated from 50x220 plus 50x170, we'll offer an even bigger discount.
Of course, it's possible. The cost will ultimately come from the consumer. At most, they could cut the amount of ammunition that comes with the machine gun and lower the price to 180 million.
"As for ammunition, are you buying it yourselves from Rheinmetall, or would you like a cheaper alternative?"
After Xia Yu made the "concession," he asked the other party.
From 5.56mm peanut shells to 155mm howitzer ammunition, this major power can supply almost all NATO ammunition at a price lower than the original manufacturer's.
Jihuo Defense currently supplies both types; it's up to the customer to choose.
"Can we each buy 10,000 rounds first?"
Argentinian is quite cautious; he buys both and tries them out himself to know which is better.
“Okay, 188 million, I like this number.”
Xia Yu immediately approved the firepower upgrade contract.
It won't be too late once all the vehicles have been delivered and the subsequent ammunition contracts are completed, but by then, the price of artillery shells will likely have increased.
This wasn't because he was heartless, but because Rheinmetall was adjusting its prices, which would raise the prices for the Federal Defense Forces, and Jihuo Defense would have to follow suit.
After reaching an agreement, Alfredo did not linger at the exhibition. He went straight to the airport and left Bali to return home and confirm a series of details.
Since it is an upgrade contract, the infantry fighting vehicles must be transported to Afica before construction can begin. Moreover, in order to avoid several mechanized infantry regiments being left without vehicles, the modification work must be carried out in batches.
That is, each upgrade involves 25 vehicles, and after completion and delivery, the next batch of 25 vehicles will be taken away. This cannot be done overnight; meetings and discussions are necessary.
To earn this small amount of 200 million, the entire modification and delivery cycle could be extended to several years.
Take it slow. Rheinmetall doesn't have that many machine guns in stock. They only work eight-hour shifts, so these 100 guns should be enough for them to work on for half a year.
However, by becoming an intermediate distributor instead of an end consumer, the purchase price of a single machine gun was reduced to 800,000 euros, and the difference in price became the profit of Jihuo Defense.
"Mr. Hudson, how did the first day go?"
Back at the hotel, Xia Yu grabbed some food at the buffet and sat down opposite Lao Ha, asking him about today's results.
“Many people are interested, but we still need to discuss the specifics. I think the most sincere ones are the Hungarians!”
Hudson swallowed the pasta in his mouth and replied.
“Their mechanized infantry will need to be re-equipped in two years, so they are very interested in the KF-41. But like most countries with weak military industrial capabilities, we have to support them in building assembly plants.”
This is about selling the production line. Although many modules are still finished products manufactured in German factories, the assembly line for the infantry fighting vehicle is equally important.
Just like the company that owns oil, it bought so many reconnaissance and strike drones and also had to package them into a production line.
Xia Yu mainly sells used cars and provides upgrade services. For example, the wheeled platform tendered by the Agen Ting people definitely requires the construction of a factory.
Jihuo Defense's production line is built in the subspace of the boss's retina; in reality, it's just a workshop. This kind of business is destined to be isolated from him, but the second-hand market is enough for him to make a living. There are fewer than 200 countries and regions in the world, and the majority of them are third-world countries with little industrial potential.
"The same goes for the Ao Daliya people."
"They are technically stronger, but they have higher demands. They would rather pay more to use their own turrets."
Hudson couldn't help but complain.
"We could have just used the existing spear turrets. To be honest, I'm really afraid that those turrets that haven't been tested in actual combat will ruin Rheinmetall's reputation."
"Hudson, you're overthinking it. They haven't had a chance to actually fight."
Xia Yu comforted the other party.
Historically, only the Japanese have ever reached the mainland of Ao Dali. They bought so much expensive military equipment, mainly to maintain their deterrent power, but it was also out of the mindset of a mine owner.
He buys whatever equipment is expensive. You might think he's paying protection money, but he genuinely wants the good stuff!
It's not like we were forced to do this with a knife to our throats. With so much military budget, we could never spend it all if we didn't squander it like this.
"Indeed not. If they weren't too difficult to deal with, we would prefer clients like this, as they can effectively avoid negative news about battle losses."
Although it's hard to admit, Rheinmetall, along with other German companies, developed and produced military equipment that was almost entirely a luxury item.
In peacetime, displaying strength is the best option for the old money and the nouveau riche. In wartime, all equipment becomes consumable, and we are repeating the mistakes of World War II, where production capacity simply cannot be increased.
"As long as it's weaponry, losses on the battlefield are inevitable. The Tuerqi people have lost so many Leopard 2 tanks, but that hasn't affected your orders!"
Xia Yu wiped his mouth after finishing his meal and said.
His two toy leopards were also thanks to the gift from the local chicken.
“You’re right. Used Leopard 2A4s would be a good project, and that’s what Rheinmetall will be focusing on next.”
Hudson agreed with Mr. Xia's opinion.
The A7 and A8 are Klaus Maffei Wegmann's market, while Rheinmetall's business lies in refurbishing used Leopard 2s with short-tube tubes, upgrading them to a level of combat capability comparable to or even surpassing the A6, and then reselling them.
These types of products target countries with a certain level of purchasing power; a price of five or six million could buy many new main battle tanks. But if there's no real threat of war, does the newness of the vehicle matter? Does combat effectiveness matter?
The important thing is that this is the Leopard 2; you can understand this by comparing it to people who buy used luxury cars.
Brands like the Weasel armored vehicle supplied to the Leopard 1 fighter jet don't have that kind of brand value. Otherwise, there wouldn't be any need for concentrated firepower defense; they could just sell it themselves for four or five million yuan, wouldn't that be more profitable?
It costs two or three million if you don't change the main gun, but if you do change the main gun, they can still make a lot of money by manufacturing supporting equipment, so there's no need for you to go through the trouble of doing it yourself.
"Our focus is on the T-64 and T-80 series; we'll be going to Oslo to buy them next month."
Xia Yu then took the opportunity to discuss the future work direction of Jihuo Defense.
“The Su Lianhuo is indeed more suitable for Afica; they are much better than the Leopard 1.”
As the head of the vehicle division, Hudson personally disliked the old theory that armor was useless, which also made the Leopard 1 less enduring than the T-64 and T-72, and it was quickly phased out.
"However, one of these two types of vehicles has a faulty suspension, and the other has a difficult-to-maintain gas turbine engine, but you can handle both."
Hudson, who had also finished eating, stood up and spoke.
There was a reason why the T-72 sold so well globally back then; moderate performance is the best.
However, Jihuo Defense's selling point is differentiation. Xia Yu doesn't sell the T-72; he wants his customers to be able to completely outclass the T-72.
"Of course, we have improved the strength of the T-64's suspension structure, while the T-80 uses a diesel engine solution. We will also simultaneously establish a professional logistics support team so that we can provide on-site service as quickly as possible if any problems arise."
Xia Yu said confidently.
"Then I wish you all the best. The market for two or three million is quite empty. It just so happens that the Wukelan people are no longer selling military equipment to foreign countries. After they have squandered their savings, they will probably have to buy back all kinds of equipment."
After Hudson finished speaking, their elevator arrived. They said goodbye and went back to their rooms.
Even after closing the door, Xia Yu was still thinking about what the other person had said.
Does Er Mao still have the money to buy back the equipment?
Maybe someone will help pay the bills!
Spending a few hundred billion dollars to weaken Russia is an incredibly lucrative deal, considering that the US has spent nearly 2 trillion dollars in the past decade or so in Afghanistan.
Getting involved personally is a bottomless pit; spending money to support equipment is the most effective solution, but even then, the costs will be balanced out.
It seems that the 100 million he prepared is not enough. If he doesn't buy a lot of goods while things are peaceful, he won't be able to buy them even if a war breaks out.
Xia Yu immediately called the museum's finance department and asked them to "lend" the money to Jihuo Defense.
The parent company and subsidiary companies have always kept their accounts separate. If he uses money from the museum's accounts, he will definitely have to issue an IOU.
The same applies to mining companies, because all payments are in RMB. All the goods that Jihuo Defense imports from its hometown go through its account, and the payment can only be made after the parent company uses and settles the payment.
Thus, Xia Yu should be able to raise 300 to 400 million US dollars before setting off.
The remaining money cannot be touched for the time being; it must be kept to maintain the normal operation of each company.
He hung up the phone, washed up, and fell into a deep sleep until a new day arrived.
After having breakfast, Xia Yu arrived at the exhibition center and ran into another German customer—Zhi Li.
Even though Hudson looked down on the old Leopard 1 tanks, Ren Zhili still had over 100 of them in use, and the rest were all Leopard 2A4s.
The infantry fighting vehicles used in conjunction with the tanks consist of 173 Marder A3 tanks, which makes one think they are from the Federal Army at the end of the last century!
No, judging from the style of the parade, it should resemble the Wehrmacht during World War II.
They approached Xia Yu because they were interested in the Weasel S30's firepower upgrade plan.
Zhili has a higher GDP per capita, but a lower total GDP. With a military budget similar to that of Agnes, it also needs to maintain a stronger air force (dozens of F-16s). Naturally, it has cut all other expenses that can be cut.
Just two years ago, they couldn't even afford to use the Cheetah rifles, so they abandoned all pretense of saving face and returned them all to the Germans. This shows how little budget the army could allocate.
But we still need to upgrade!
It's the 21st century, and 20mm machine guns are really not enough; we need 30mm ones.
With little money in her pocket, Zhili Army delayed the upgrade of tanks for the armored forces, prioritizing the upgrade of infantry fighting vehicles instead, because they were cheaper.
The budget to upgrade one Leopard 2 can upgrade two Marder S30s, so it's a very simple choice.
“Mr. Sherlock, we don’t need anti-tank missiles, just upgrade our MK302/ABM cannons.”
A major general in the army, whose hair was half white, spoke to Xia Yu.
People are poor and lack ambition, but they really can't get military funding anymore. Cutting the anti-tank capability, which isn't that important, is just right. After all, missiles expire eventually anyway, and you can't really rely on infantry fighting vehicles to intercept tanks.
Furthermore, with the Air Force receiving such a large budget, shouldn't they be protected in the event of war?
"What about the quantity?"
Xia Yu took out his notebook and asked.
Zhili's army has significantly more Weasel A3s than Agengting's VCTPs, but Xia Yu feels that they haven't upgraded as many as Agengting.
"80 vehicles!"
As expected, Xia Yu's intuition was correct. Proportionally, it was only half the size of Agnes, and all of them were "basic" versions without missiles.
"So, with a donation of $136 million, we'll include a base load of ammunition with every vehicle."
Xia Yu submitted a quote.
This is already an incredibly good price, and the old general, who has been in contact with Rheinmetall and inquired about their prices, knows this very well.
However, they had their own principles regarding ammunition; they refused cheap alternatives and did not want to go through the Central Fire Defense department. They negotiated directly with Rheinmetall.
Although the previous deal fell through, the goodwill remained. Compared to Jihuo Defense, which she had just met, Zhili was naturally closer to Rheinmetall.
Xia Yu wasn't jealous at all; he just thought it was bizarre, since nobody would want to mess with green paper.
"Yes, absolutely. It's just that your country is behind the Agnes Army in the order of delivery, so it may take up to 3 years."
We won't spoil it. Let's take it slow and proceed in order. If we only start delivering in the third year, it will probably be the fifth year by the time we finish. By then, we can just buy Rheinmetall ammunition for 900 euros a round; it will definitely smell of oil paper.
"We can wait patiently, but please guarantee the quality."
The major general knew that the Agnes people had gotten there first, but they weren't in a hurry. After all, their weasels were bargains they had acquired after the Cold War, and they couldn't afford them at the original price. This patience had been maintained until today.
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