Chapter 830: Monopoly Group

  Chapter 813 – Monopoly Group

The birth of Royal No. 1 was more than just a simple luxury item, much less one that was built heavily by the people below in order to kiss the emperor’s ass.

After all, it was his own property, and the one who ended up footing the bill was Franz himself. Without the permission of the Emperor himself, that was to be held accountable.

There was no doubt that the Austrian Automobile Group had poured all its efforts into building this ultra-luxury sedan, and it was certainly not to show off its wealth.

It was impossible for Franz to go out for a ride in this car, and even information about this car would not be disclosed to the outside world.

Making this request, in addition to promoting the development of automobile technology, is more of a test of the country’s industrial strength.

As an emperor bombarded by all kinds of information, Franz is very clear that the data, statements can be fabricated out of thin air, but only in front of the physical can not be faked.

These days the whole world, only Austria has a complete automobile industry, other countries are still following behind to eat dust.

Even if the following people want to fake, there is no space to play.

In the face of the Royal One, Franz also personally inspected the largest automobile production base of the Austrian Automobile Group – Prague Automobile Factory, which can produce 20,000 cars per year at full speed.

This number in the latter half of the world is not strange at all, any car factory can easily do.

However, this is the average daily production of less than 55 cars factory, is the world’s largest automobile factory, not one.

In fact, it’s even more exaggerated than that. This modest production capacity of 20,000 cars per year already accounts for one-third of the entire production capacity of the Austrian automotive industry.

The production capacity of this Prague automobile factory directly exceeds the combined automobile production capacity of Britain and France, and is comparable to the automobile production capacity of all countries except Austria.

Well, this is the result of Franz open. At present, the world can industrialize the production of automobiles, only the Austrian automobile group unique one.

There’s no way that getting down to business has long been an advantage. When no one was paying attention to the automobile industry, Franz started to drop money.

The Austrian Automotive Group has buried its head in the laboratory to engage in research and development from the very beginning, and has not announced any news to the public at all, and its peers have not reacted to it.

No, exactly before the product was introduced, there was no such thing as peers.

Before that, everyone was running towards steam car development. And the internal combustion engine automobile of the Austrian automobile group, it is completely two species.

The original time and space of the earliest internal combustion engine automobile on the market, or 1888 things, this open history precedent, in the latter part of the bullish Mercedes-Benz automobile founder, still do not know what to do.

The earliest American automobile company, Oldsmobile, was founded in 1897; the earliest Japanese automobile company, Cadillac, was registered in 1902.

……

When the first product of the Austrian Automobile Group – “Beetle” went on sale, everyone suddenly realized that the original car can also be built this way.

The Austrian Automobile Group, which had no competitors, naturally rode to the top and became the dominant player in the automobile field.

Undoubtedly, in the background of patent protection does not cover the whole world, the followers soon appeared.

R & D can’t come up with a moment, but take the template copy, still can’t copycat?

Then, the first products of the Austrian automobile group, mostly became parts, adding to the development of the world’s automobile industry.

Essentially, this is just a conceptual breakthrough. As long as the brain hole is opened, industrial powers are able to build cars.

Only the car is not simply assembled and that’s the end of it. Getting the production technology is not the same as being able to build a car of acceptable quality.

It also needs the cooperation of related industries, and if any one of the links has problems, the final result will be a tragedy.

The followers soon discovered this, however, let them simultaneously develop multiple areas of technology, to overcome a series of difficult hurdles, and is really too difficult for people.

The huge capital cost invested in the early stage alone is not something that ordinary enterprises and individuals can stand.

After all, the automobile market is very limited these days, the financial consortiums do not see this small profit.

Capital’s favorite thing to do is to wait for the fruit is about to ripen, directly up to pick the fruit, rather than running to plant their own fruit trees.

Entity giants, and most of them are limited by the concept of business, generally focus on their own field, even if the expansion, but also into related industries.

This is a lesson summarized in countless classic cases, rash cross-border into an unfamiliar field, the chances of failure are much higher than success.

Before the risk can not be predicted, the general public will choose to wait and see. Of course, more importantly, there is no money in the pocket.

Now the family car market has just begun, how the future is still unclear, who can not guarantee that today’s internal combustion engine car will not be yesterday’s steam car.

The automobile industry is in the money-burning stage, equivalent to just planting a sapling, far from blossoming.

Then, naturally, it was hand-built. The technical difficulty of large-scale industrial production is too high, and if you want a cottage, you must also have industrial support, which can not be accomplished overnight.

In contrast, handmade is much simpler. The precision of the spare parts is not enough, so let the laborers go up to polish. Engine horsepower is not enough, increase the number of cylinders.

Now the Austrian automobile group’s main competitor in the market is a bunch of handmade workshops.

Because the automobile has just been introduced soon, still belongs to the high-class luxury goods, pricing is higher, even if the production cost of handmade workshops is higher, they can also get a lot of profit.

After smoothing all this out, Franz’s brows furrowed.

Obviously, many people in the Austrian automobile group were mesmerized by the current achievements and ignored the existence of competitors.

From the time the product was launched in 1882, the Austrian Automobile Group’s market share was decreasing year by year.

A drop in market share is inevitable, unless the market is completely monopolized, or else the market share will definitely drop as competitors continue to join.

Only the Austrian Automobile Group’s market share is falling too fast, in just three years, it has fallen by nearly a quarter.

This is his own industry, if it stops, the loss is his own interests, which is intolerable to Franz.

“Oprea, aren’t you guys prepared to build a cheap model to retain market share?”

Expanding the market share, Franz no longer had the luxury.

You know, the Austrian Automotive Group is the one that occupies seventy-six point four percent of the car sales market, how else can it increase?

But as far as possible to retain market share, or reduce the rate of decline in market share, that can be efforts.

Oprea hurriedly explained: “Your Majesty, cheap cars on the market will not only reduce our corporate profits, but also damage the value of our automobile brand.

The Beetle, Walker, and Brady models that the group is currently promoting are all premium cars.

Although selling at a reduced price can gain a larger market share in a short period of time, automobiles are destined to be a luxury item from the moment they are born.

No matter how much we reduce the price, it is impossible for ordinary people to afford it. Now we are trying to make cars a status symbol, so it is very important to maintain their brand value.”

Being able to realize the “brand value”, Oprea is obviously not an idle person.

However, due to the limitations of the times, he still did not think that the car may come into thousands of households, from luxury goods down to transportation tools.

At present, the world, only a few tens of thousands of cars per year consumer market, Oprea abandoned the development of low-end models, focusing on high-end brand operation, or attached to the reality.

Franz shook his head: ”No, there is still a lot of room for the production cost of automobiles to fall. It is not impossible for prices to fall to a range acceptable to ordinary people in the future.

In the short term, with the existing technological system, we are all able to compress the cost to a range that the middle class, can accept.

If we continue to expand production capacity, the current production costs will continue to decrease.

Maybe the sales of individual cars go down, but the middle class is much larger than the rich, and the total profit we make will only be higher.

Furthermore, lowering the price of cars sold will also discourage our competitors. Unlike us, their small workshop production costs simply can’t come down.

As for the brand value issue, that’s even easier. Re-register a company and use the new company’s name for a different brand to focus on low-priced cars.”

Now the production cost of the car is generally between 400 to 700 Shendun, the sales price on the market is basically above 1000 Shendun, the price of the luxury version of the car sales is high is easily over ten thousand.

Such a high gross profit, still can’t hide the fact that Austrian automobile group loss.

Mainly R & D investment is too high, and the high cost of maintenance, which led to the enterprise in a state of loss for many years.

Oprea’s focus on corporate profits is actually a necessity. The company’s financial situation is not good, can not ask the boss for money every day, right?

If it wasn’t for Franz’s mandatory requirements, it is estimated that Oprea would have to cut its R&D expenses and fully invest in automobile sales.

After all, in the short term a sales-based business is going to make more money than an R&D-based business. Only by making the business profitable could everyone get a more lucrative return.

Now that we’re losing money, it’s good to get some bonuses. Stock options are not popular yet, but profit sharing has already appeared.

It’s just that the Austrian Automotive Group is a research and development-oriented company that has been losing money for more than ten years, so it doesn’t see any dividends at all.

However, Oprea still has a sense of propriety, there is no way to learn from some unscrupulous executives of listed companies, who only care about their own money, without any consideration for the long-term development of the enterprise.

Otherwise, to steal a concept, Austrian Automotive Group wants to turn losses into profits or very simple. Whether it is to compress the investment in research and development, or to slow down the construction of repair points, are able to realize profits.

If not for the drag of these two gold-digging beasts, the Austrian Automotive Group is definitely the most profitable company in this era, or the kind that can rival the country.

Even if it was every car, only earning 100 God’s Guilders, the Austrian Automobile Group would still have five to six million God’s Guilders of net income every year.

In reality it would only be more, the cars that were sold, could not all be the lowest profit ordinary models. The kind of luxury cars that cost tens of thousands of dollars, selling out a single one would easily earn a few thousand in revenue.

Of course, the core competitiveness of the Austrian automobile group is actually technology and after-sales service.

Short-term loss of money, but in the future these are the most profitable. Once the channel laying is completed, it is impossible to find competitors for a long time.

This point look at the Austrian domestic know, where the group service network coverage of the region, the market can only sell the only “Austrian automobile” car.

Other manufacturers, limited by their own strength, simply can not afford to lay so many service outlets.

Once the car breaks down, you can only find a way to repair it yourself, or wait for the manufacturer’s skilled workers to come over.

“Yes, Your Majesty!” Oprea replied.

After a pause, Oprea added, “Your Majesty, in order to increase corporate earnings, reverse the current loss-making state, and increase corporate competitiveness.

The management plans to cover the gas stations as well when laying down the logistic channels to make it easier for our users to refuel on their way to travel.”

If this was done in the latter days, the antitrust law would have come to the door long before it had a chance to start.

The meaning of “convenient for our users” is already very obvious, it is full of exclusivity. Other cars can only look on from the sidelines even when they arrive at the gas station.

But in the 19th century, in this era of monopoly, this is completely commonplace. As it is now, the Austrian automobile group’s service points do not service other brands of cars.

After a few moments of contemplation, Franz shook his head: ”Gas stations can be done, but they can’t be so extreme. It’s not the same as a repair point, and it’s very easy to cause public resentment.

The anti-monopoly clamor in society is getting higher and higher, and it’s only a matter of time before each country introduces an anti-monopoly law. Leaving such an obvious breach now will make it easy to be targeted in the future.

In this regard, you must pay attention. Even if you want to increase your competitiveness, you can adopt more covert means.

For example: membership card services.

Anyone who buys one of the group’s vehicles can enjoy membership services and be able to get certain discounts at gas stations.

Other customers, who want to enjoy discounts on gasoline, can be made to pay for a membership card out of their own pocket.

It is possible to have more membership cards, preferably different ones for each city, and one membership card can only entitle you to discounts in one area.

Feel free to find any excuses, as long as they’re clear-cut and people can reluctantly accept them.”

Austrian Automotive Group’s repair points that don’t service other cars, that’s a good enough reason to shrug it off.

For example: there are no matching spare parts to carry out repairs; or that the repairer has not touched the car and does not know how to get it.

Not so with gas stations, everyone uses those oils anyway, there is no such thing as being unable to use them.

If they refused to provide the service, the owners would certainly make a scene. This kind of hate-pulling thing, Franz naturally wouldn’t do.

In contrast, member services were much easier for everyone to accept. As long as there was no fanfare, ordinary people simply could not understand the complex relationship between the companies.

Changing a vest, so that the gas station and the automobile group from the direct contact. The auto group can also pay an annual membership fee to the gas station, leaving everyone speechless.

Anyway, these days, we have not yet reached the technology of information networking, the membership card can not be passed throughout the country, and it can be excused as unrecognizable, or the gas stations around the country are independently operated.

Cards can’t be recognized, but cars can. If he could get all the car manufacturers, to cough up the dues, Franz wouldn’t mind a discount for everyone.

……

(End of chapter)