19 April 2013 ~ 0 Comments

In China , a deep bow to Morgan

IMG_0055 The weeks move by and we are slowly, inexorably passing the hurdles placed before us to import and sell the Morgan cars. My concern as the weeks pass by runs to the costs of inactivity, (storage, rental, salaries etc) but also to the cars aging and the impact that will make on the customers. We are now nearly 6 months since these cars were built.

This week we have made progress though in Tianjin. The VIN plates were refashioned on the cars, and translated to Chinese. In a quirk of history, another party has registered Morgan Motor in China and therefore we had to use Malvern Morgan for the customs registrations and plates. The Roadster suffered an electrical fault, she is now 8 months since being built, but our mechanic went to Tianjin today and fixed the problem. We had sent this mechanic to Malvern in February, and had also translated the manuals. These proved to be good investments.

We believe that the inspectors gave the cars approval to be moved onto the Inspection next week. Apparently we shall have to leave one of each model with the inspectors for upto 60 weeks (at storage RMB120 per day) but may be able to extract the customer's cars. This is good news, accompanied by the less sweet news of the impending RMB3,000,000 tax bill for their release next week.

The showroom is coming along nicely. This week it has taken shape with furniture, carpets and the MAC's for display. The leather has arrived from Muirhead along with accessories from MWS. I have Moto-Lita steering wheels shipping next week. Along with the current paint samples, the showroom will be a good place to show the main options and accessories for choosing a Morgan. We have employed Zhang Yu, a young salesman formerly with Audi. He starts on Monday and will sit with Amy. Combined these two are going to help Erika enormously as she has carried the bulk of the burden on Chinese language issues since we parted ways with Oscar.

Showroom

 

 

 

 

 

 

 

 

The key challenge now is balancing the cashflow and the expectations of all parties. Even though we have been constantly driving at this business for nearly 24 months, we are always facing delays and obstacles. We have to pay, for example, nearly GBP300,000 in taxes next week on demand. We have been ultra cautious in our spending to safeguard the customer funds to pay for this; as we can only convert US50,000 per month in capital to RMB, our ability to service this debt is in question if we don't preserve existing local currency.

The US$ can only be converted upon proof that the existing funds have been spent on capital items which conform to the company incorporation requirements. Meanwhile Morgan quite rightly wants us to clear all our debt with them, the shipping company is patiently awaiting their GBP8,000 before shipping more cars (we have 2 more at sea due to arrive in 10 days) and our customers are demanding their cars. In another piece of arm tying, the bank can determine what it will allow us to pay for and when  - for example the shipping company can't be paid until the duty on the goods is paid, irrespective of their job being done. Explaining these idiosyncrasies to people unfamiliar with China meets disbelief and annoyance in equal measure.

Ironically, our marketing efforts are leading more people to visit Morgan in Malvern and ask for a piece of the China business. A piece on the BBC Auto site talks up the Morgan opportunity in China.

BBC Auto article

We hope that the cars will be through before the May festival - I had never noticed the number of holidays which occur from Dec to May, just before the summer holidays arrive! All of these would be nice for  a drive in an open top sports car. I wonder if I can drive one of ours soon. Seeing the picture of my old BRG Roadster in Tiananmen last summer just brought back many fond memories - back then the business was a dream, today it is nearly a reality.

 

 

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