Becoming Rich with Daily Scavenging APP-Chapter 442: Car Manufacturers’ Unified Action

Chapter 442: Chapter 442: Car Manufacturers’ Unified Action

"If the payment terms can’t be shortened to less than two months, then we may have to terminate our cooperation with Yiyang Automobile."

The suppliers show no sign of softening their stance.

The negotiations for the day ended without results.

The next day’s talks hadn’t started yet when several even worse pieces of news came out.

"Biya Mansion’s official account released a message stating they will fulfill their social responsibility and promote high-quality industry development, unifying supplier payment terms to within sixty days."

"Ji Li also sent out a message, announcing payment terms unified to within sixty days."

"Chang Cheng also announced it."

These car companies seemed to unify their thoughts on this day, suddenly announcing they would unify payment terms to sixty days at nearly the same time.

"They’re playing word games." Liu Xiaoyue, who rushed over from Yiyang Automobile headquarters, said,

"They only mentioned paying bills within sixty days but didn’t say whether it’s cash payment or commercial paper payment. If, like before, they wait until the payment is due and then issue a commercial paper with a sixty or ninety-day redemption, then it makes no difference."

"It’s not entirely without difference, at least nominally there’s a change," Chen Yiyang said. "Moreover, what if they really pay cash instead of issuing commercial paper?"

"Even if they do pay cash, there are still many ways to handle it," Liu Xiaoyue said. "To my knowledge, Ji Li even waits until the parts supplied by the suppliers are mounted on the chassis to count as the receipt time, in which case their payment terms are at least about ninety days."

"Now is not the time to discuss this," Chen Yiyang interrupted Liu Xiaoyue.

"Do you know how ofo quickly met its demise?" Chen Yiyang said. "Because, during the shared-bike competition back then, ofo never found a significant financial backer, so they just barely sustained their cash flow by advertising.

As a result, ofo’s competitor, Mobike, sold-out to Ugly Group.

With financial backing, Mobike immediately announced nationwide no-deposit bike rentals.

Once this policy appeared, ofo couldn’t keep up and directly started the countdown to bankruptcy.

Of course, ofo wasn’t exactly moral either. After Mobike’s no-deposit strategy appeared, ofo immediately realized they were facing bankruptcy, and not only didn’t fight against Mobike, but even canceled their previous credit-score no-deposit policies, ultimately ruthlessly harvesting a wave of old users’ deposits before fleeing.

You could say greed was brought into full play.

But now Chen Yiyang is facing the same pressure.

Large car companies are announcing shortening payment terms to within sixty days, so if car companies without enough funds don’t follow this strategy, they will face collective abandonment by suppliers.

In the future, even if suppliers are willing to supply, they will choose to increase supply prices to hedge risks.

"So what should we do now? Should we also shorten the promised payment time on the bills to sixty days?" Liu Xiaoyue asked.

"If Yiyang Automobile were only selling cars domestically, it would be fine; we could gather some money to pay the bill for the first batch of vehicles.

But the problem is that we’ve already started production and sales in Brazil, Thailand, and Russia with the Baize Lingguang model.

It takes time to transfer funds from these countries back to the domestic market, and sixty days is definitely not enough."

Chen Yiyang stated the current biggest difficulty.

The cash shortage is indeed a problem.

However, the shortened payment terms have infinitely expanded this issue.

Chen Yiyang has manufacturing plants in Thailand, Brazil, and Russia where he can directly produce and sell cars in these countries.

This saves a lot of tariffs.

However, because of the lag in local industrial levels in these countries, many key automotive components still need to be imported from domestic sources to complete local assembly.

Doing so presents a problem.

These countries have rather moderate foreign exchange reserves, making it challenging to repatriate sales earnings swiftly.

Chen Yiyang originally planned to trade the money earned in Brazil and Thailand into various agricultural products and then directly ship them back to sell domestically.

His business involvement is broad, so this method could maximize interests.

But the drawback is that repatriating these earnings domestically could take a long time, up to a maximum of six months.

If Chen Yiyang’s business model starts running smoothly, profits could outweigh the risks associated with extended repayment times.

Even if Baize Lingguang sells well, they could shorten payment terms for suppliers to sixty days.

However, this would clearly require at least a year or two to build such financial reserves.

"Let’s do it like this: I’ll talk to these suppliers one by one, see what they’re really thinking."

At this moment, Liu Xiaoyue stood up.

"Then you start discussions with them; even if the talks don’t succeed, we’ll have room to maneuver."

Liu Xiaoyue, as a seasoned industrial talent, undoubtedly excels in negotiation skills.

Within a few days, she quickly discerned the bottom line of these suppliers.

Then she returned to report back to Chen Yiyang.

"Besides a few particular suppliers, the other suppliers actually hope for us to grow Yiyang Automobile."

Because we have many overseas markets, we can help them increase sales.

The intense competition among the domestic big car manufacturers is just battling over the same pie. Suppliers can’t earn more money.

If Yiyang Automobile can stand firm overseas, they can follow our steps to export parts overseas.

Essentially, we’re helping them open up the overseas market."

"So, are they willing to delay the payment terms to six months?" Chen Yiyang asked.

"Not willing." Liu Xiaoyue quickly continued, "But the reason they’re not willing is mainly due to not trusting Yiyang Automobile’s strength."

"We are selling pretty well in Thailand and Brazil. Isn’t that enough to convince them of our strength?" Chen Yiyang frowned.

"Although Thailand and Brazil are developing well now, these markets are traditionally viewed as mediocre, lacking appeal."

"What nonsense, how does that even relate to appeal?" Chen Yiyang didn’t understand Liu Xiaoyue’s meaning.

"It’s somewhat similar to storytelling in the stock market."

Liu Xiaoyue patiently explained, "These suppliers provide us with parts, but behind them are also a group of suppliers providing them with raw materials.

When we ask the other party to delay payment terms, they also have to ask their downstream companies to defer payment terms.

If this were the old days, everyone’s payment terms were long. That wouldn’t be a problem.

But now that everyone’s payment terms have shortened, they require some sort of appeal or reason to defer payment terms for us.

For instance, valuing our future development potential or believing in our strong repayment capability.

Our performance in Thailand and Brazil isn’t enough to show sufficient appeal or reason for delaying payment terms."