Chapter 100: If you want to do it, do it big
Sports cars are actually a thankless field, especially the top super sports cars.
It's like when Aston Martin launched the One-77, which was limited to only 77 units worldwide. Even though these 77 units have been sold out, this car actually doesn't make money, and even breaking even is a problem.
As the saying goes, there are people who do business that will cost them their lives, but no one will do business that will lose them money.
Why did Aston Martin continue to develop the One-77 even though it knew it would lose money?
The reason is simple: this is a super sports car business model.
The launch of this industry-leading super sports car can establish and maintain Aston Martin's brand image and industry status.
But how can we get back so much money invested in the early stages of research and development?
This requires making up for the loss from other models besides the one-77.
So the problem is, when your other models don’t sell well, you will incur losses.
Over the years, with the emergence of the subprime mortgage crisis and the European debt crisis, almost all super luxury car brands have suffered losses to varying degrees. Except for Ferrari which can barely maintain itself, Porsche has entered the luxury field from the super luxury field early on. Among them, including Lamborghini, Maserati, etc., which one is not suffering from serious losses?
Porsche emerged from the crisis by launching the low-end luxury car Cayenne, which immediately boosted sales.
Yang Huan, Ulrich Bates, Zhao Yuanfang and others have all talked about this. If Aston Martin wants to improve its current predicament, it must move beyond the sports car field and launch four-door luxury sedans, SUVs or crossovers.
Because this type of car can only sell well and make money in emerging markets such as China.
The money earned from this type of car can be used to feed back into the research and development and technological innovation of super sports cars, and the brand image and industry status established by super sports cars can be used to further boost the sales and influence of low-priced models.
What Aston Martin is thinking and doing now is also being done by super luxury brands including Lamborghini and Maserati.
In some ways, Aston Martin is a latecomer.
Another very important point is that Aston Martin only had experience in developing sports cars before.
So, when Yang Huan proposed to develop luxury cars, SUVs and crossovers, the entire management had no problem with it. As long as there was financial support, they could do it because this was the trend.
How to solve Keren’s problem?
How to deal with the weakness of lack of experience?
These are a big hassle.
Yang Huan sat in the center of the oval desk. He turned his chair and faced the crowd. He placed his left hand flat on the desk and listened to the heated discussion among the management of Aston Martin.
It included many very professional terms, which Yang Huan had never even heard of, so he had no way to participate in it.
However, seeing that the quarrel was getting more and more intense, Yang Huan could not help it.
He slammed the desk hard, and the sound of "bang" echoed throughout the conference room.
Everyone in the conference room was startled by Yang Huan's sudden action, and they all fell silent.
"What are you arguing about?" He glared at the six or seven people in the two rows below.
You're already sitting in this position, yet you're still making such a noise?
Is that reasonable?
"Malik, you speak." Yang Huan pointed to the design director Malik Rickman.
The young Aston Martin design director immediately stood up and said, "Master Huan, designing a car is actually a very complex system engineering, and it is the result of the operation of an entire team. If it is just a sketch, we can do it, but it involves a lot of engineering technology analysis, which requires the accumulation of a large amount of data."
“Many brands that have moved beyond ultra-luxury have not been successful because of problems in this area.”
Malik Rickman thought Yang Huan might not understand, so he took the initiative to explain the car design process to Yang Huan.
Automotive industrial design is the most important and critical link of a car. The overall design and development level, project management capabilities, accumulation of automotive data, assurance of vehicle performance and quality, etc., are largely determined by the strength of automotive industrial design.
Aston Martin's industrial design in the field of sports cars is second to none. They have accumulated a lot of data and experience in this field. They have no problems with sports cars, but in areas other than sports cars, it is unknown.
Through Malik Rickman's explanation, although Yang Huan didn't understand the twists and turns, he understood a little bit.
Just like many people talk about Apple, almost no one will deny that a very important point for the success of all Apple products is their industrial design. From computers, MP3s to mobile phones to tablets, Apple's industrial design has brought them countless loyal fans.
As Android phones, doesn't Samsung differentiate itself from other manufacturers by relying on its outstanding industrial design?
Take cars for example. Many people say that Korean cars look good but are not durable. However, this cannot stop the sales of Korean cars from climbing steadily around the world, and they have gradually become a strong new force in the global automotive industry.
Kia, in particular, has seen its sales soar year after year after hiring a European design director.
From these and even more fields, we can see the importance of industrial design, and it is becoming more and more important.
"Is there any way to expand our industrial design team in the shortest possible time?" Yang Huan looked at Malik Rickman.
The latter nodded and said, "Of course, we will bring in more talents in this field, but our weaknesses in database accumulation and engineering analysis are still very obvious."
"Actually, there is another way." Ulrich Bates offered.
"What is the solution?"
"Outsourcing!" said Ulrich Bates.
This is also the first consideration for most crossover car companies.
It is outsourced to independent car design companies.
Yang Huan shook his head. "I don't like outsourcing. It sounds very low-end and fake."
"Master Huan, actually outsourcing is very common in the European automobile market." Ulrich Bates smiled bitterly. The outsourcing strategy he had insisted on for many years was criticized as low-end, but he couldn't get angry and could only smile bitterly.
"Or, we can acquire it directly," German Mediterranean added.
"Acquisition?" Yang Huan was a little surprised.
Ulrich Bates nodded and said, "The entire automotive industry is currently in a slump, especially some independent car design companies. The three most outstanding Italian independent car design companies in the world have encountered problems in recent years and have all fallen into debt crises. Even leaders like Giorgetto Giugiaro are unable to make ends meet."
"I mean, buy one of those car design companies."
Yang Huan was excited. This was indeed the fastest way to improve Aston Martin's industrial design capabilities.
At this moment, Zhao Yuanfang, who had been silent all this time, suddenly interrupted.
"Dr. Bates, as far as I know, 60 to 70 percent of foreign car design tasks are completed by independent car design companies, and the most outstanding of them are undoubtedly Italian design companies. Why did they have debt crises one after another?"
Ulrich Bates looked at Zhao Yuanfang. "It's actually very simple. More and more car companies are beginning to pay attention to independent research and development and design. For example, after Chris Bangle became BMW's chief design director, he insisted on acquiring a design company. Now this design company not only designs models for BMW, but also Boeing aircraft, Nokia mobile phones, etc. are all their customers."
"Moreover, many car design companies have their own car manufacturing plants and other businesses. Once they are not well managed, the company will naturally fall into the quagmire of debt and find it difficult to extricate itself."
"Oh." Zhao Yuanfang understood a little bit. Since large companies have established or acquired design departments, the market for these independent design companies has gradually shrunk. Especially in recent years, the entire European and American automotive industry has been in a slump.
Emerging markets, represented by China, are rising strongly.
"Master Huan, I agree with Dr. Bates!" Zhao Yuanfang looked at Yang Huan with a smile, "But I think Dr. Bates hasn't thought enough. We should go one step further."
"Oh?" Yang Huan was interested in Zhao Yuanfang's idea.
The most important thing for Zhao Yuanfang now is to establish himself as an investment consultant in Yang Huan's mind. Since he has seized this rare opportunity, he naturally works very hard.
"As far as I know, the entire automotive design field is just starting in emerging markets such as China, but it is already very mature in Europe and the United States. My idea is, either don't do it or do it bigger. I will directly acquire these three companies and integrate them into a large industrial design company, abandon other businesses including production, and focus on industrial design."
When Zhao Yuanfang said this, Ulrich Bates and others were shocked.
This is a big deal!
You know, Giorgetto Giugiaro, Broadcom and Pininfannia are all valuable assets. It is not easy to acquire one, and it is even more difficult to acquire three. Among them, Giorgetto Giugiaro will face competition from the Volkswagen Group.
You are smart, and I am not stupid.
Volkswagen gives a lot of business to these independent car design companies every year, and now it also wants to acquire a design company of its own.
Do you have the deep pockets of the masses?
Unexpectedly, Yang Huan nodded happily after hearing this, "Interesting."
He has always been interested in challenging difficult things.
Ulrich Bates shook his head. "Let's not talk about whether we can acquire these three independent design companies. Even if we do, integration will be a big problem. My opinion is to acquire one of them and make it part of Aston Martin. I also suggest poaching Jaguar's Chief Design Director Ian Callum to be in charge of car design other than sports cars."
Ian Callum once designed a sports car for Aston Martin, helping Aston Martin usher in a revival. Now he is the design director of Jaguar, winning numerous awards and is known as the James Cameron in the field of car design.
This Scotsman is best known for the strong British aristocratic style of the cars he designed, which is very much to Yang Huan's taste.
"Since Jaguar Land Rover was acquired by Indians, it has suffered heavy losses in recent years. Ian Callum has also been under tremendous pressure. I believe he is happy to switch from Jaguar to Aston Martin, and he also understands the culture of Aston Martin. I believe he is the most suitable candidate."
Seeing that Yang Huan was interested, Ulrich Bates further persuaded him.
In the past few years, Aston Martin's sales have increased a lot, but its product quality and brand image have been declining.
As CEO, Ulrich Bates was under tremendous pressure.
After finally welcoming the change of dynasty and welcoming the new boss, he naturally wants to keep his position at all costs.
This requires him to prove his worth in front of his new boss.
Moreover, as a veteran doctor in the automotive industry, Ulrich Bates truly believed that if anyone could build a luxury car with Aston Martin bloodline and win recognition from the outside world, the most suitable candidate must be Ian Callum!
Even surpassing Aston Martin's current design director Malik Rickman.
The latter is still too naive after all.
When Yang Huan heard that Ulrich Bates was confident of poaching Ian Callum from next door, he immediately became interested. Since he was known as the James Cameron in the field of car design, he must be a talent.
At the very least, Yang Huan likes the Jaguar he designed and is looking forward to the luxury car he designed for Aston Martin.
Zhao Yuanfang looked at Yang Huan's expression and thought to himself that something was wrong. He didn't want to miss the chance to show off that he had fought so hard for, so he quickly spoke.
"I think the acquisition and integration of these three design companies has great market prospects. Apart from other things, the orders from Chinese automobile companies alone are enough to support this design company. As for integration, I don't think it is a problem. In addition, I think there is a person who is very suitable and must be very interested in helping us complete the acquisition and serve as the head of this design company."
"Who?" Yang Huan was also interested in this plan.
Industrial design is indeed very important and has great prospects.
If we can acquire and integrate these three design companies, it will indeed be a very competitive thing.
To use a Chinese saying, go your own way and leave no way for others to go.
In the future, if car companies want to design car models, they will have to come to me.
What a cool and exciting thing this is!
Moreover, he could see that Zhao Yuanfang and Ulrich Bates seemed to be competing for credit.
He likes this because reasonable and healthy competition is a good thing for any team.