[199]Step forward 1
In 2002, when the European Union began officially using the euro, my first move was to the HW Automotive Research Institute, which combined the research centers of Ajin Motors and Sunyang Motors into one.
I visited early in the morning with Chairman Song Hyeon-chang, Automobile President Cho Dae-ho, and CEO Oh Se-hyeon to see the prototype of the first car that reflected my intentions.
At the lab’s exhibition hall, the design center director, designers, and researchers waited for us with nervous expressions.
Not only people but also a small, shiny car was waiting for us.
M21-1
It even had a name tag with the project name on it, meaning it was the first mini car of the 21st century.
The moment I saw the new car, a score of 85 was assigned in my head.
As if these numbers were visible on their faces, the head of the design center and the two senior researchers sat next to the management and began to explain.
“We chose an overall round design. As it is a light car, it was chosen to provide a sense of stability. However, it is an aggressive design with the silhouette and character line rising towards the rear. It is a tense and dynamic shape.”
“By choosing a low position, we also pursued the pure pleasure of driving with the feeling of driving in close contact with the road.”
“This small, cute car runs unexpectedly and thrillingly, so I expect the joy that comes from the gap will be great.”
I stopped listening to their explanations and started looking at the car.
Displacement 796cc, 4-speed automatic, 2-seater coupe.
A design you’ll fall in love with at first sight, that’s all I asked for.
However, the car in front of me right now wasn’t enough to make me fall in love at first sight, but it was enough to make me say that it was cute and pretty.
After thoroughly checking the interior, the developers’ explanation ended and others began to look at the car.
“Why not a convertible version?”
When I asked quietly next to the head researcher, his expression turned perplexed.
“To pass the European safety standards, we could not avoid the pressure of manufacturing costs. It was unprofitable, so we excluded it from the design stage.”
Although I repeatedly urged them not to think about profitability and just make great new cars, they seem to have been unable to avoid the pressure of performance that was ingrained in their bones. I only let out a light sigh of regret.
After everyone inspected the car, the development team looked even more nervous.
Now it is the company’s managers’ turn to make an evaluation. As soon as the slightest negative word comes out of their mouths, a nightmare-like time awaits them that cannot be compared to the hardships they have endured so far.
The timeline is structured so that it can be shipped in the fall. If you are told to turn over today and come back again, you will be suffering from a truly murderous schedule.
Everyone’s eyes were focused on Chairman Song Hyeon-chang. No matter what anyone says, isn’t it living proof of the automobile that raised Ajin Motors to second place in Korea?
In addition, he is a person who has put all his effort into developing innovative automobiles. He was also the first person in Korea to go so far as to launch a two-seater convertible sports car, even at the cost of a huge amount of money. Even though assembly was all it took.
He slowly opened his mouth.
“It was a good choice. Everyone worked hard.”
Chairman Song Hyeon-chang patted the shoulders of the relaxed development team members and comforted them for their hard work.
“Thank you all for your hard work. I hope all of the development staff get off work today and at least see the faces of their families. We don’t know what hardships will await us starting tomorrow.”
Although President Cho Dae-ho was sparing in his evaluation, he also seemed to acknowledge their efforts.
“Come on, let’s have some tea and talk.”
President Cho took us, including Chairman Song, outside.
Everyone remained silent as they sat in front of the teacup in the reception room within the institute.
In particular, when Chairman Song Hyun-chang just sipped tea without saying a word, President Cho opened his mouth first, perhaps in a hurry.
“Chairman, I’d like to hear your honest opinion….”
“Huh? Are you serious about what you said earlier?”
When I casually threw this out, President Cho couldn’t erase his skeptical expression.
“Is that so?”
“How many compact cars are there in our country? Isn’t that great?”
“I think being a two-seater would be a weakness….”
“Is there a car that doesn’t have weak points? And a family of four stays away from compact cars, right? Thinking of the child’s safety first. A compact car is a subcar, but it seats two people anyway.”
Chairman Song seemed genuinely satisfied. And he surprised us all with something unexpected.
“Now don’t think about my opinion. Aren’t I already a sunset? I’m an old man who should have left long ago.”
“No. Not yet….”
Chairman Song Hyeon-chang waved his hand to stop President Cho from speaking.
“I kept my position because I had the ability to at least make face-to-face remarks at official business meetings. However, Chairman Daehyun Joo also passed away, and Chairman Jin of Sunyang also stepped down to second place. It is an undeniable fact that my role is over. .”
Chairman Song Hyeon-chang suddenly emptied his teacup and stood up.
“Ignore my opinion and mind your own thoughts. I’ll go up first.”
“Shoes, Chairman.”
We were all taken aback by Chairman Song’s unexpected behavior.
“It’s okay. Let’s sit down and talk. Old people know when to leave to be treated like adults. I want to be treated like adults by you. Hehe.”
Chairman Song Hyeon-chang left the research institute without looking back, moving in a hurry.
We were all surprised by the sudden declaration, but we couldn’t just remain idly by. Those who remain must work.
“Okay. Now, shall we share our opinions honestly?”
President Cho looked at Oh Se-hyun first. Oh Se-hyeon, who received his gaze, only shrugs his shoulders.
“What do I know? I’m an ordinary middle-aged person who thinks a good car is as long as it’s big and spacious and can fit only a golf bag in the trunk. When evaluating compact cars, the opinion of CEO Cho, who is an expert, is the most important.”
Instead of Oh Se-hyun taking a step back, he asked for my opinion.
“Dojun, what do you think?”
“This is exactly the car I wanted. Even though I’m not 100% satisfied, I think that’s enough, right?”
“A cheap car with a good design and reasonable reliability?”
“Yes. A car that middle-class parents can buy for their children graduating from college. A car that a beginner in the workforce can easily maintain with a 3-year installment plan. A car that just looks a bit sophisticated when driving, but doesn’t look like it’s missing. This is my opinion. And that new car. To some extent, it matches my thoughts.”
I expressed my opinion at the level that an ordinary person thinks.
“How many people buy cars based on performance? Output, power, 0-100 mph, balance… Aren’t most of them just commuting to work and weekend outings rather than enthusiasts who are picky when choosing a car?”
“Just look at the car. I’m not different from you either.”
“But you’re thinking of something else.”
“Yes. According to information, a 600cc light car is being produced by Daihatsu of Japan. It is a two-seater convertible.”
Daihatsu Copen? Is that coming out this year?
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“Even domestically, we have to compete with such cars overseas. It’s a shame, but Korean cars are still cheap cars. But that new car I just saw is significantly less competitive in price. We can’t start mass production only thinking about the domestic light car market. “There isn’t one, right?”
“What if we set HW Automotive’s overall net profit margin to zero? Would that still make it less competitive?”
“what?”
“M21-1, right? Project name?”
“okay.”
“So, it is okay to sell the M21-1 at a loss because other models make a profit. In other words, if we give up on making money and focus only on increasing production numbers, will our price competitiveness decline?”
President Cho Dae-ho paused to think for a moment.
“Let’s only think about the benefits of expanding production scale?”
“Yes. Uncle, would you accept it as the majority shareholder? Running the company without profit?”
I secretly sent a signal to Oh Se-hyeon. He quickly began to agree.
“It doesn’t matter. But keep in mind that if there is no profit, the stock price will continue to fall.”
“It’s a mid- to long-term strategy. Don’t we have to support automobile stock prices anyway?”
Even though Oh Se-hyun and I agreed, President Cho Dae-ho still didn’t look good.
The indicator of corporate management is the stock price. If the stock price falls, it cannot be considered good management, and of course the CEO must take primary responsibility.
Even if the majority shareholder, the owner of the company, says there is no problem, aren’t the shareholders the ones who quickly change their minds when they see the stock price falling?
“Boss Joe.”
“Huh? Huh….”
I need to clearly convey my goal to someone who is lost in his own thoughts. How about taking ten or twenty years to slowly build a proper automobile company?
“How big is the gap between us and Daehyun Motors?”
“Based on the number of units shipped, it is 65%, but in terms of sales, it is less than half of Daehyun’s. 49%….”
This clearly shows the absence of luxury cars with high profit margins. If we are going in the right direction, we should move towards luxurious mid-sized sedans rather than producing pretty compact cars.
However, as we have already confessed, our position in the global market is cheap cars. It is unclear whether it will be able to beat Daehyun, let alone Global, if it focuses on mid-sized sedans.
“If we give up profits and focus only on narrowing the gap, won’t that new car be price competitive?”
“Are you serious?”
“yes.”
Oh Se-hyeon spoke to President Cho Dae-ho, who confirmed my intention once again with an anxious expression.
“President Cho, let’s give it a try. What if we can’t make money with cars? This guy will make money at Sunyang Financial Group and give it to us. Let’s get it to a level where we can invest in research and development and expand the production line without losing the salaries of executives and employees. Then, wouldn’t it be possible to press Daehyeon?”
As expected, he is a quick-witted uncle. If he sets his goals accurately, he won’t worry about nothing.
Major shareholders declared that they would aim for size rather than surplus. This is no different from saying that no matter how much the stock price falls, if you take one step at a time toward your goal, there will be no change in management.
“It’s okay if it doesn’t get better reviews than the Daihatsu compact car that is coming out this year, but can it at least be an alternative to that car?”
“no.”
President Cho immediately shook his head without even thinking for a moment.
“The technology gap with Daehyun is far too great. How much less Japan? It’s hard to believe. They’ll probably choose it as the last option. I’m sorry, but that’s our position.”
A harsh self-evaluation pierced my entire body. She asked, bringing herself back to reality.
“Then what about our country’s compact car market?”
“More than 50% of the compact car market share. This is something I have to accomplish. Leave it to me. I will achieve it by next year. If I can’t achieve this level while selling at cost, I feel like the CEO will be fired. I promise to risk my position.”
This time he shows great confidence. Looking at it this way, it seems trustworthy.
“Then please hurry up and aim to launch in October and announce the new car in June.”
“June? Why is it June? The Frankfurt Motor Show is in May, and Paris is in October. I was thinking about the Paris Motor Show?”
“As you said, isn’t targeting the domestic market more important than the global market? The World Cup will be held in June. It’s a golden opportunity.”
At the mention of the World Cup, not only President Cho but even Oh Se-hyun frowned.
“Hey! Even if it’s held in our country, it’s still someone else’s party. The qualifying tournament is over, so why is it the World Cup?”
Oh Se-hyeon frowned.
“It seems like it will be different this time, right? Isn’t there something called the home ground advantage? If you get good grades, there will be a festive atmosphere, and if you take advantage of that atmosphere, the effect goes without saying.”
This is so… .
There is no way to explain it because no one will believe it.
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