The Dawn of a New Millennium, Part 2
Is the word “love” just a faded memory for the older generation?
“Even if it doesn’t sell in large numbers, a car with a unique identity, a car you want to own—that’s what we aim to create. Love at first sight is great, but a love that grows slowly is just as wonderful.”
“A car you want to own, huh…”
“Was it back in ‘96? Ajin Motors acquired the production line and design from Lotus in the UK to sell a two-seater convertible. It was designed for small-scale, handcrafted production, so mass production wasn’t even an option.”
As I mentioned the car, President Jo Dae-ho frowned, recalling the vehicle I was talking about.
With an annual production target of 10,000 units, the production cost alone was 30 million won.
Even selling it without profit, adding VAT and special consumption tax, the acquisition price turned it into a 40 million won car.
You could buy a fully loaded mid-sized car for 15 million won, or even a flagship sedan for just over 40 million won.
In the end, Chairman Song of Ajin Motors set the selling price in the high 20 million won range, including taxes, and embarked on a venture that lost money with every sale.
“I know. I was the one who discontinued that car.”
“Yes. From a profitability standpoint, it was an insane move.”
“So, what are you suggesting? That we produce such a sports car?”
He looked at me with an expression that seemed to understand why someone as young as me would bring this up.
A young owner of a car company wanting a sports car from his own company—President Jo seemed to interpret my intentions just like that. Isn’t this the hallmark of a young owner treating the company like a toy?
President Jo must have thought I was still quite young.
“Why would we make a car that loses money? And just so you know, I don’t even have a driver’s license yet. I’m not interested in sports cars. My favorite car is the BMW 7 Series because it saved my life.”
“Then what do you mean by a unique car?”
“A compact car that a working woman can buy on installment, a coupe that a man in his 30s can afford over three years, a pickup truck that a middle-aged man would want as a second car. That’s what I mean.”
President Jo’s frown didn’t ease.
“There are already plenty of compacts and coupes. Pickups don’t sell here.”
“They’re cars no one wants.”
“What?”
“Compact cars that look cheap, coupes that aren’t stylish, pickup trucks that look like commercial vehicles. Who would want to buy those?”
Only then did my grandfather and President Jo understand my point, though they still couldn’t hide their skepticism.
“No matter how desirable you make them, such cars won’t sell in large numbers. The cars that sell are family cars. Anything else never breaks even. You know that by now, right? The auto industry is about mass production.”
“What if we run a two-track production line to reach the break-even point? Is that impossible?”
“Family cars and beloved cars? Like that?”
“Yes.”
“You don’t plan on making money, do you?”
“I don’t mind running at a loss for the next ten years. Things will change after that.”
Even now, and in the future, we can’t surpass the sales of Toyota and Volkswagen. If those two companies had only made family sedans, they wouldn’t have reached the top.
Their commitment to developing diverse, unique, and challenging cars, and not ignoring a niche group of enthusiasts, is what put their flagship models, the Corolla and the Golf, at the top.
Daehyun Motors has declared its ambition to be in the global top five in the 21st century, and it will surely achieve that. But Daehyun still lacks any image beyond being a practical choice due to its cost-effectiveness.
Cars should inspire dreams.
The moment you imagine yourself driving that car, it becomes beloved.
“Ha ha ha.”
My grandfather, who had been listening quietly, suddenly burst into laughter.
Watching him, President Jo also started laughing, slapping his forehead.
As I looked back and forth between them, not understanding, my grandfather spoke up after calming down.
“You’re saying the same thing I did when I started Sunyang Motors. Ha ha.”
“Indeed. The chairman also said, ‘I don’t mind not making money for ten years. If necessary, I’ll sell my underwear to fund it.’”
“Really?”
“Yes. But just a year later, when the financial results came out, he told me, ‘At this rate, my neck is on the line. Get us out of the red quickly.’ Ha ha.”
Damn.
My sincerity is being twisted like this.
“Don’t worry. Do-jun, I believe you’ll be different from the chairman. Heh heh.”
“This guy! If I were serious, would I have kept you in that position?”
I couldn’t let the two elders reminisce forever, so I gently interjected.
“President, you understand my intention, right?”
“The chairman boasts about how much money you have. Can you handle it? The first condition for a beloved car is design. For a man, a car is like a woman. A beautiful face is a must.”
“I’ll recruit the best designers. Chris Bangle or Peter Schreyer, if you like. Just name the designer you want.”
Mentioning the names of designers from BMW and Audi, President Jo looked at my grandfather and smiled again.
“Chairman, he seems serious. Thanks to him, I won’t have to worry about performance for the next ten years and can just collect my salary.”
“Don’t be fooled. Whose bloodline do you think he is? Heh heh.”
My grandfather chuckled lightly, then asked seriously.
“When a car company starts losing money, it’s hard to manage. You could lose all the money you’ve made from investments.”
“I have enough to invest for about ten years, including in China.”
“What? China?”
The two were surprised again, but their reactions were slightly different.
Especially President Jo, who looked at me as if witnessing something extraordinary, asked.
“Do you have a spy in Daehyun Group?”
“Excuse me?”
“I heard Daehyun is starting to look towards China. They aim for local production by 2005, but opinions are still divided.”
“It’s already a bit late. We need to hurry, even by a day.”
Volkswagen had already entered China in 1984. They established Shanghai Volkswagen in partnership with Shanghai Automotive and focused on the southern regions of China.
In ‘91, they partnered with China First Automobile to target the northern regions, and by ‘99, they had captured nearly 60% of the Chinese market.
“The Chinese market is about 1.5 million units. Excluding luxury cars for the wealthy Chinese…”
President Jo’s reluctance to rush was evident.
Since China only allows joint ventures, entering the market requires technology transfer, which is the most unsettling part.
“You know explosive growth is about to start, don’t you?”
“Well, well, it seems we should follow Do-jun’s lead on this.”
President Jo seemed surprised by my grandfather’s sudden suggestion.
Since the merger of Sunyang Motors and Ajin, he had never interfered in management.
“Why is that?”
President Jo’s sudden provocative question seemed to surprise my grandfather as well.
“Oh, look at this guy. Are you saying you won’t follow my words anymore?”
“In this setting, you’re an advisor, Chairman. There’s no reason I must follow your advice. Of course, if it’s excellent advice, I intend to follow it.”
“See? This guy is like that. Do-jun is demonstrating to you. Whether it’s a beloved company or entering China, if he can’t convince himself, he won’t even start.”
My grandfather was excited, like a child who had discovered something amusing.
“Watch closely. Money from all over the world is flowing into China. The world’s factory? That’s a truly terrifying phrase. Our Sunyang factory invested heavily because of cheap labor. Value creation comes from labor. The place of that labor is the factory.”
“So you’re saying that as wealth accumulates, there will be a need to spend it.”
“The speed at which chimneys rise in China is accelerating. The economy will grow rapidly as well. And the first way to flaunt accumulated wealth is through cars.”
“When a man’s bank account grows, his eyes turn to cars. That’s just how it is.”
President Jo nodded, turning his gaze to me.
“It will cost a lot. Time, quality, money. These three are always on opposite sides. To reduce time and improve quality, you need a massive initial investment. Are you okay with that?”
“Can you estimate the amount? Right now?”
“China requires a 50:50 investment system… At least 250 million dollars? That should allow for an initial production scale of about 100,000 units.”
“That’s not as large as I thought. Let’s do this. Let’s base the initial investment on 500 million dollars, including the cost of rushing.”
When I immediately doubled the figure, President Jo’s mouth fell open.
“See? I told you, this guy has a ton of money.”
My grandfather clapped his hands in delight, laughing at the astonished President Jo.
“My ex-wife… well, not yet. Anyway, it feels strange to meet a wife I’ll divorce in a few years.”
“You seem happy.”
“You still take good care of yourself. Who would think you’re over fifty?”
“You should compliment me like that more often. Why? Do I look different because I’m not your woman anymore?”
“Still sharp. Let’s cut to the chase. What’s the matter?”
Mayor Choi Chang-jae was secretly pleased when Jin Seo-yun suggested meeting for tea, harboring a faint hope. That hope was to cancel their impending divorce.
“Let’s join forces again.”
“Are you serious?”
“Don’t get me wrong. I have no intention of sharing a bed with you again. As real partners, not as a couple. What do you think?”
“What’s this about? Haven’t you already gotten enough from leaving me? If your father finds out you’re teaming up with me, he’ll take everything back.”
“He can’t take it back. Or rather, he won’t be able to.”
“Safety measures or whatever, they’re useless. How can anyone take something from me that I don’t even have?”
“What? What do you mean?”
“Exactly what I said. I have nothing left. Just keep that in mind.”
Mayor Choi Chang-jae watched Jin Seo-yoon, who wasn’t elaborating further, and made a guess. She’s a woman with a lot of pride. Everything she received from Chairman Jin was gone, leaving her with nothing but the title of being a daughter of the Sunyang Group. He didn’t know what she’d been through, but it must have been significant.
“If you don’t want to talk about it, that’s fine. But what is it you want to do with me again? Still the same plan?”
“Of course. I need to sit in that study in Pyeongchang-dong before I get too old and become a grandmother.”
“You said you have nothing in your hands. How do you plan to get to Pyeongchang-dong?”
“To get to the front door, I just need to follow someone. But the path from the gate to the study is tricky. If you could clear the way for me, it would be much easier.”
“Who’s the one clearing the path for you?”
“Someone you know well. The one who arranged your campaign funds.”
“Do-jun? Really, Do-jun?”
Jin Seo-yoon raised a finger to her lips, calming the surprised Mayor Choi.
“Whether it’s Do-jun or anyone else, you’ll need power to handle things in the end. Being the mayor of Seoul won’t cut it, so you better prepare well. I still have some personal assets, so even if I end up broke, I’ll back you.”
“I’d hate to dip into my ex-wife’s savings…”
She gave a slight smile at Mayor Choi’s feigned reluctance.
“Enough with the pretense. No one knows you better than I do.”
Choi Chang-jae poured water into the empty glass in front of Jin Seo-yoon.