Chapter 206: A Problem That Requires No Thought
by xennovel“It’s not a problem we need to deliberate over, so there’s no need to think about it.”
“Giving up Soonyang Capital’s financial programs to sell cars? Isn’t giving up your own company’s profits to help others something we should think about and deliberate over?”
Chairman Joo Kwang-shik questioned, as if he couldn’t understand.
“As I mentioned, they’re not just anyone. Representative Oh Se-hyun is like a mentor to me, teaching me everything about finance, and Soonyang Automobile… it’s Grandfather’s legacy.”
I even feigned a bit of helplessness, carefully watching his reaction.
“Making money off money isn’t easy… Sigh, selling things is truly something I’m not cut out for.”
“This is a big problem.”
“Yes?”
Not understanding what he meant, I widened my eyes. Chairman Joo Kwang-shik chuckled and said,
“Thinking that a nephew who sees the financial business so simply is my competitor makes my future look bleak.”
“Competitor? We’re actively cooperating like this.”
“Alright. Cooperation, you say? I’ll trust you for now. And I don’t forget debts I owe.”
He was referring to the time he used me to play both sides when acquiring the card company.
“But before that, I need to simulate the installment program for the cards. If there’s no profit and only risk, it’ll be like it never happened.”
“That’s unlikely. How many cars do you think Daewoo Motors has sold on installment so far?”
“Well, yes, there’s that. This is just me being cautious. Our nephew would do simulations when faced with it too, wouldn’t he?”
Card fees and installment interest. It’s not a losing business. If only there weren’t the risk of a credit card crisis.
I drove the point home before the interest waned.
“Yes, of course, you should. But please remember one thing.”
“What is it?”
“How much interest profit Daewoo Motors makes from installment sales. If done right, you can bring all of that to the card company.”
The automobile installment program managed by Chairman Joo Tae-shik. Stealing the profits earned from there is a huge temptation for Chairman Joo Kwang-shik, who is in a competitive relationship.
“This is quite a problem.”
“What is it this time?”
“Our nephew knows my weaknesses too well. Haha.”
“I’m just scratching where it itches.”
“Goodness, I like the Jin nephew much more than the Joo nephew.”
“If we continue to maintain a cooperative relationship like now with you, Uncle, wouldn’t I be as good as your own nephew?”
We exchanged insincere words and laughed heartily.
# # #
“That’s how it always is. Once you throw something away thinking you don’t need it, you always find a use for it. Haha.”
Vice-chairman Jin Dong-gi burst into laughter as if he were watching a truly amusing sight.
“That’s right. If I had known this would happen, I would have just held onto it. I never thought about linking the automobile installment program with credit cards.”
He scratched his head roughly, looking regretful.
“Whose idea is this? Is this your idea too?”
“No. It’s Representative Oh Se-hyun’s idea. He seems to have judged that the biggest reason for Soonyang Automobile’s poor sales is the financial burden on consumers.”
I used the name Soonyang instead of HW. It was to make him feel like it was more his own business.
“What about Soonyang Capital? They’re already running an installment program, aren’t they?”
“Thirty-six months is the maximum there. We even considered raising the interest rate and extending it, but the Soonyang Capital executives are strongly opposed. They say it would give the impression that our interest rates are unnecessarily high compared to other companies.”
“That’s right. Consumers don’t meticulously check everything. They don’t realize that the interest rate goes up as the installment period increases, and they just compare the highest interest rates and complain that it’s expensive.”
I spoke while watching Vice-chairman Jin Dong-gi diligently racking his brain.
“Daehyun Card says they’ll review it positively. Especially since Soonyang Capital has hinted at discontinuing the installment program for this new car.”
“What? Why would they give that up? Automobile finance profits are the core of the capital company!”
He seemed more shocked that Soonyang Capital was giving up its profits than that I had approached Daehyun first. His eyes widened, and he shouted.
“What can we do? We have to help each other in times like these. Representative Oh is a special person to me, after all. And we need to avoid the appearance of leaving only the burdens to the card company while keeping the valuable parts.”
His voice calmed down as he realized it also benefited him.
“Do you think we can raise the installment interest rate for the card purchase program?”
He was already thinking of ways to increase profits.
“Even the current interest rate is higher. So, we can even offer a promotion to discount the interest rate for installments within 36 months. As you said, Uncle, consumers only look at the bottom line.”
“Hmm….”
Seeing my uncle start his complex calculations, I knew my job here was done. Now was the time for him to look at the specific numbers and make a final decision.
“Anyway, Soonyang Automobile will send you a proposal. Please review it and decide.”
The floodgates were opened.
Now it was HW Automobile’s and the card companies’ employees’ turn to negotiate. I selected talented individuals from Soonyang Capital and sent them to HW Automobile.
If they created the best combination, we could hope for a reversal of the situation.
* * *
Signs were already appearing everywhere. Anyone who looked closely would know that it was only a matter of time before it burst, but it was hard to stop.
Users resorting to cash advances or card companies unable to give up on acquiring new customers and the fees from their card swipes were in the same boat.
And they didn’t give up on the fees and installment interest that would come in the moment someone swiped their card for a ten-thousand-dollar car.
“The contract is signed. The card fees are a bit of a burden, but we can more than make up for it with increased sales.”
Now, two card companies would start major advertising campaigns. Thanks to that, our
“That’s great. You met my uncle in person?”
“Yes. We’re not strangers, and we’re the ones in a position of needing something, so I stopped by to say hello.”
“Did he say anything particular?”
President Jo Dae-ho chuckled.
“That man talked about HW Automobile as if it were his own. Throughout the meeting, it was all Soonyang Automobile, Soonyang Automobile…. It was a bit much for me.”
“He didn’t go as far as giving work instructions, did he? Like the Chairman? Hehe.”
I suppressed a laugh at the sight of President Jo’s instantly furrowed brow.
“Huh? Did the unthinkable happen?”
“Honestly, it was absurd. He said the concept itself was problematic, that it was a car that shouldn’t have been released considering international competitiveness…. Later, he even explained the next project. Saying we need to strengthen the subcompact lineup….”
From President Jo Dae-ho’s angry expression, I felt that a beast that had broken free from us would never be caged again.
After the merger of Soonyang and Ajin, he led the company without receiving instructions from anyone. He might be the first CEO of a large company to experience the separation of ownership and management.
He would occasionally report the company’s status to Grandfather, but he didn’t receive any special instructions. He led the company entirely according to his own will and didn’t receive any dark instructions from owner families trying to siphon company funds.
From the time he was involved with Soonyang until now, he had never felt as much pride as a manager as during his time as CEO of HW Automobile.
“So, what did you say?”
“If it weren’t for the credit card installment program contract, I would have told him sharply to mind his own business, but what could I do? I’m the one who needs something, so I just pretended to nod.”
As expected, when doing business, you need to wash your liver and gall and hang them out to dry at home. Even if it’s dirty and unfair, bowing your head is the same for frontline salespeople and presidents.
But since the results are good, it was worth enduring.
On the surface, it was a deal where all three companies achieved great results.
Younger people who might find it a bit burdensome to buy a two-seater coupe are used to swiping their cards. Moreover, the temptation of accumulating points moved their hearts.
The first credit card-based automobile installment purchase program ignited the acquisition of new customers for Soonyang and Daehyun Card.
Also, the inquiries that had flooded the car dealerships were now pouring into the card companies. People who checked the monthly repayment amounts grabbed their cards and rushed to the dealerships.
“This worked. It looks like we need to revise the target of 7,000 units upwards. Haha.”
“What’s the expected number?”
“At least ten thousand units or more. Internally, we’re trying to go up to 12,000 units.”
“Won’t the profit margin be a bit worse because of the card fees?”
“The overall profit and loss will be similar to the initial target of 7,000 units. But since production volume has increased, we’ll save a bit in the cost department. But the most important thing is something else.”
Even if it’s not ordinary or conventional, if it touches the consumer’s emotions, it creates a desire to buy. HW Automobile is different from Daehyun, which only produces uniform cars.
Most importantly, HW Automobile is the first car for the young, new customer base. Now, if we don’t betray their trust, it’s as good as securing a reliable consumer base.
“Can we track where the increased customer base is coming from?”
“Mostly from Daehyun. The interesting thing is that it’s not people who were going to buy Daehyun’s compact car
President Jo Dae-ho suddenly smiled and said,
“I can almost hear Chairman Joo Tae-shik of Daehyun yelling.
“He’ll be even more upset once our advertisements start running in earnest, right?”
“Since the two most valuable sports stars have an exclusive contract with us, he’ll go crazy? I guarantee it, there will be a complete shake-up of Daewoo Motors executives this time. Hehe.”
“Are there any you’re interested in? Leaving personal connections aside.”
President Jo, who immediately understood the meaning of my words, fell into thought for a moment.
“There’s exactly one person. He’s from marketing, and he’s been out of favor since Joo Tae-shik became the chairman of the automobile company. He’s the number one target for downsizing this time.”
“Marketing isn’t exactly a reason to be interested… there must be something special about him.”
“He’s the person who first planned Daehyun’s participation in major international rallies, and currently, no one in Korea knows as much about rallies as he does. Since Daehyun’s performance isn’t good, he’s outside of Joo Tae-shik’s interest.”
President Jo looked at me and asked again.
“If we acquire a European sports car company, shouldn’t we participate in rallies? Once we secure the technology, we need to show results.”
“Daehyun’s number one layoff target will be our number one recruit.”
* * *
2002 was a truly interesting year.
In the past, the World Cup and elections were unrelated to me, and I was just one of the many spectators.
But now, I was a part of major national events and deeply involved. Even though the results didn’t change….
The coalition of the ruling party candidates broke down the night before the presidential election, and breaking news continued to pour out until dawn.
Whether it was the supporters who gathered out of a sense of crisis or it was originally the candidate’s strength, on December 19th, the protagonist of a tumultuous life was elected as the 16th president.
The perfectly meshed gears that had governed Korea until now began to creak.
Chaebols and the media, the media and politics.
The ‘people,’ who were never even considered, wedged themselves into this cogwheel.
The Korean New Millennium began at this very moment.