Chapter 227 Private Meeting

After the meeting, Zhou Mingyuan arranged for Mu Xin and his group to stay at a business Hotel near the BYD headquarters in Pingshan.

At eight o'clock that evening, Zhou Mingyuan drove over alone, having changed into casual clothes, and took Mu Xin to a private Shunde-style restaurant next to the Hotel.

The private room was small, and a slightly faded photograph of old Shenzhen hung on the wall.

Four dishes and one soup were laid out on the table; there was no alcohol.

"Mr. Mu, there were some things I couldn't conveniently say in the meeting today in front of the Legal Department and the Americas Business Division. Let's chat privately for a bit now." Zhou Mingyuan picked up his chopsticks to take a piece of steamed sea bass, his tone significantly more relaxed than it had been in the conference room.

"The situation you saw in the meeting today, with the Commercial Vehicle Division, the Legal and Compliance Department, and the Americas Business Division all sitting together—on the surface, they are one family, but in reality, each has its own agenda."

"Let me give you the bottom line first. Once you understand the relationships between these three parties, you'll know who to approach and who not to approach in subsequent negotiations, as well as what shouldn't be said in front of whom."

"Go ahead," Mu Xin said, placing his chopsticks on his bowl.

"Our Commercial Vehicle Division is the initiator of this matter. The few people from my direct team that you saw in the conference room—their daily job is to screen for KD projects with the potential for implementation on a global scale."

"In their eyes, the Americas market is the last high ground that hasn't been conquered. It's indeed impossible to enter the United States directly because tariffs have blocked that path."

"However, it is possible to bypass the tariffs on complete vehicles through component imports and local assembly. This path is viable on paper, and it is the path you are taking."

"Therefore, the Commercial Vehicle Division is willing to push for this, not because of your scale, but because you are the only person who has come to us so far with approved industrial land and a preliminary confirmed plan for the local supply chain."

"We need someone who can prove the feasibility of the Commercial Vehicle KD model in North America, and for the time being, that person is you."

He picked up a mouthful of food and continued, "But you also know that policies in the United States are less reliable than children playing house; they change every few days. It's damn unreliable."

"So, as long as the Legal Department adds a single sentence to the compliance assessment report stating that this matter carries export control risks to the U.S., our project approval will be shelved by the group for at least one or two quarters."

"Lin Ruohua doesn't have any personal issues with you; she has worked in the BYD Legal and Compliance Department for over a decade, and all her performance indicators are tied to the group's compliance and risk control."

"She isn't afraid of missing out on the U.S. market opportunity; what she fears is that if something goes wrong with you, BYD will be dragged down with you."

"So, in the next round of negotiations with her, you don't need to try to convince her that this project has no risks. She will never acknowledge on paper that a project involving U.S. associations has no risks."

"What you need to do is ensure she cannot find a direct reason to veto it, preferably a reason that cannot be rigorously substantiated in the legal opinion for the project assessment."

"Then what about the Americas Business Division?" Mu Xin asked.

"The Americas Business Division is the party you should pay the most attention to today. The person you saw on the video screen doesn't directly handle business advancement; he is responsible for BYD's government relations and lobbying resources across the entire Americas region."

"He has his own team in Los Angeles and has direct contact with U.S. lobbying groups and certain members of Congress."

"The Americas Business Division is in favor of entering the U.S., but they care about how it's done. In their view, the licensing model puts BYD in the least valuable position of the entire industry chain."

"You are the one earning the brand and market premium, while BYD only earns money from supplying parts."

"They want a day when the BYD logo can appear openly and honestly on American roads, not for you to be a contract manufacturer for BYD in Ohio."

"So, the attitude of the Americas Business Division is that they support you entering the U.S. market, but they are resistant to your licensing approach."

"This resistance will manifest as something specific in the next round of negotiations. If the U.S. brand on your trademark doesn't make the Americas Business Division feel that there is a possibility of it being rebranded as BYD in the coming years, they might use legal and compliance cover in internal review meetings to slow down the overall progress of your project."

"So it's a case of each of the three parties having their own agenda." Mu Xin leaned back in his chair and sighed.

"It's even more complicated than that." Zhou Mingyuan put down his chopsticks. "The intersection of interests among these three parties is dynamic."

"The common ground between our department and the Americas Business Division is that we both hope BYD can establish a firm foothold in North America, though the Americas Business Division wants to achieve this through BYD's own brand."

"The Legal Department stands as a third pole apart from the other two, supporting whichever plan has the lowest risk."

"Currently, the licensing plan has better risk control within your framework than other methods, but as soon as the Americas Business Division proposes a compliant channel for their own brand, the Legal Department will sway toward that side without hesitation."

"So, you're telling me all this tonight so that I know exactly what to say to whom before the next round of negotiations?" Mu Xin asked.

Zhou Mingyuan leaned back in his chair. "My KPI is to ensure that global KD projects are implemented, including in North America."

"Currently, you are the only one who can implement this in North America, so I will push for this internally on your behalf, but I need you to do one thing for me on the outside."

"Do not promise anything to Lin Ruohua that you cannot support with written documentation. If she finds even one gap between your promises and the written documents during compliance checks, she can use that gap to veto the entire project."

"Conversely, every written document you put on the table, as long as the content is solid, can help me block her potential reasons for a veto one by one during the legal review meetings."

"For every one I block, the project moves one step forward."

Mu Xin picked up his teacup and took a sip. "How long does your internal process take for the second round of vehicle technical proposals and supply agreement terms?"

"The standard procedure takes about three months. But if the Legal Department's compliance assessment doesn't flag any veto-level risks, I can compress this process to within two months."

"During this period, you need to simultaneously be prepared for the formal signing of supplier contracts, factory land preparation and assembly line design, and most importantly, the trademark."

"Your U.S. trademark must be registered with the United States Patent and Trademark Office before the second round of negotiations begins; it cannot just be in the application stage, it must have already received a registration number."

"Without a registered trademark, the Legal Department will not allow you to enter the discussion phase of commercial contract terms."

Mu Xin opened the memo on his phone and typed a few words, then looked up at Zhou Mingyuan. "Director Zhou, is the information you told me tonight considered sensitive within BYD?"

Zhou Mingyuan was silent for a moment. "Yes. I am helping you clear up the internal landscape in my personal capacity. If the Legal Department finds out that I am privately disclosing internal decision-making disagreements to a client, my performance review will be affected."

"Then I thank you for this meal," Mu Xin said. "If there's a chance in the future, it'll be my turn to treat you."

Zhou Mingyuan smiled, picked up his teacup, and clinked it against Mu Xin's cup.