klisemfg Chapter 138 American Women's Friend
Chapter 138 American Women's Friend
Dinner was sumptuous; a chef from Chinatown prepared a fusion meal of Chinese and Western dishes.
In short, Lin Yi couldn't get used to the food.
However, Dodge was very accommodating, praising him extensively.
Whether it came from the heart is unknown, but it's enough to express an attitude.
After the meal, Lin Yi showed off his tea ceremony skills.
As the three men drank tea, Lin Yi explained his betting agreement.
$40 million, based on the Dodge Brothers' current stock price, to acquire 13% of the shares.
He also became co-president of Dodge Brothers.
This year alone, Dodge Brothers sold 300,000 vehicles of various models, causing the company's stock price to double.
If the goal is achieved, he demands a 13% equity award.
If we can achieve sales of 800,000 cars next year, we will receive a 10% equity award.
However, if the number of vehicles exceeds one million, the company will still receive thirteen percent.
"Lin, one million vehicles sold in a year?!"
Tony was surprised.
Dison stared wide-eyed in astonishment.
None of them calculated that if Lin Yi acquired 39% of the shares, he would become the largest shareholder of Dodge Brothers.
"Can't do it?"
Lin Yi looked at the two of them and asked with a smile.
"Lin, do you know that only Ford has ever achieved one million vehicles a year?"
Listening to Tony's words, Dison nodded repeatedly.
He never even dreamed of annual sales of one million vehicles.
He felt like he could laugh in his sleep if the Dodge brothers could even sell 200,000 vehicles a year.
"If Ford can do it, why can't we?"
Lin Yi asked another question.
Before Tony and Dison could speak again, he said, "It's simply a matter of market positioning."
"The reason why Ford's Model T was able to sell 15 million units is that they found the right market positioning."
"Everyone should know about the Model T before that."
"Cars are not something that working-class people can afford."
“And the working class is precisely the largest market.”
"The Ford Model T achieved such sales figures precisely because it captured this largest market."
Listening to Lin Yi's analysis, Tony couldn't help but nod.
Dison agrees with this point.
He understood the meaning behind Lin Yi's words.
To achieve sales of one million units, the only option is to follow the low-price strategy, like the Model T, and rely on the large market support of the working class.
It was a very clear line of thinking, but he didn't agree with it.
"Mr. Lin, I admit your analysis is correct."
"But we Dodge brothers can't break the Model T's monopoly at this price point."
"You know, cost and scale are closely related."
"Through so many years of accumulation, Ford has brought the cost of the Model T to its limit."
"If we try to seize their market share, we're destined to lose money."
"A loss of one million vehicles... I'm sorry, such sales figures are meaningless."
As he said these words, Dison was somewhat disappointed.
He had learned about Lin Yi indirectly.
To be able to make such a huge fortune in the stock market shows that one has a keen eye for opportunity.
So he rushed to Yorktown with great hope.
But if that's all the answer he gets, he'll only be disappointed.
This approach was not only tried by the Dodge brothers after the Model T became a hit, but almost all car manufacturers tried it as well.
Without exception, they all ultimately lost out on the issue of cost.
Both models imitated Ford's assembly line and featured rudimentary car models.
However, in terms of cost, falling behind at one step leads to falling behind at every step, and it can never catch up with Ford's Model T.
This is due to both the scale of the business and the suppliers.
Different purchase quantities result in different purchase prices.
In short, when all the costs are calculated, the cost price for all car manufacturers is close to the selling price of the Model T.
There's simply no way to compete.
Back then, the sales volume of the Model T was far from what it is today.
Therefore, choosing this route again at this point would only lead to a dead end.
“Mr. Dodge, I remember you saying that Model T sales are declining.”
"That's right, but it's still the best-selling model."
"No other model can challenge its position, including other models produced by Ford."
Dison said, his face also showing helplessness.
Even Ford itself couldn't break this miracle, let alone other automakers.
"But its annual sales are indeed declining."
"Dison, you should know why."
"Of course, it is indeed too rudimentary, so rudimentary that everyone except wallets would love it."
"So Lin, the market doesn't accept this sales approach."
"Everyone will hate it."
"Therefore, we not only need to have an advantage in price, but also need to say goodbye to rudimentary methods."
"Of course, every car should be profitable."
Dison: "???"
Is it even possible to do that?
It's simply impossible!
Seeing that he still didn't believe him, Lin Yi stopped explaining.
The topic of equity came back: "Disen, I was just talking about the rewards I need to receive for achieving these sales figures."
"And when I failed to meet the sales target in the first year, it meant that I lost our bet."
"Then congratulations, you can buy all the shares I own for ten million dollars."
"Of course, if at that time, the value of 13 percent of Dodge's shares is less than ten million, then I will transfer my shares to you free of charge."
"Think about it, this is definitely a good deal for you."
After saying all this, Lin Yi calmly picked up the teacup in front of him.
He didn't believe that Dison could resist the temptation of such a sure-fire way to make money.
Thirty million is enough for him to lose money for a year.
Seeing this, Tony's eyes darted around, and he also picked up his teacup.
He believed in Lin Yi.
This guy, in particular, has always had good luck with bets.
He dared to bet 30 million, so he must have been absolutely certain of success.
Time passed by minute by minute.
To calculate, to consider.
After a long pause, Dison Dodge finally spoke: "Lin, I would be very happy to see the Dodge brothers achieve the sales target you mentioned."
"But isn't a 13% equity award a bit too high?"
“Dison, that’s certainly very high.”
"But you should think about what Dodge Brothers' stock price will be at that time?"
"The Dodge family's wealth must have more than doubled, right?"
Lin Yi patiently guided him, then smiled and said, "And that thirteen percent equity incentive is something that all shareholders have to bear."
"This is definitely a worthwhile deal for the Dodge family."
After listening to Lin Yi's words, Dison remained silent for a moment before asking, "Lin, could you elaborate on your specific market strategy?"
Lin Yi chuckled: "Should I tell you that the Emperor Emeritus is planning to become a friend of American women first?"