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The car "dealer" business in Central Asia is not so easy to do: there are "pitfalls" in every link

2024-07-28

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Source: Time Weekly Author: Fu Yibo

"Kashgar now is like Shenzhen in the 1990s, with a huge crowd of people, and it seems like everyone is just trying to make money."

In the summer night breeze, in the old city of Guangzhou, outside a shabby Hunan restaurant, Bird Brother naturally put his hand on the Maserati SUV on the roadside, but the car was not his.

His main job is to buy chestnuts, and he only works once a year in the autumn. The rest of the time, as he puts it, he "does something."

That night, he took a deep puff of his cigarette and sighed, "In that place, you can easily make $5,000." Immediately, his thoughts went back to the past.

The place he was talking about is called Bishkek, the capital of Kyrgyzstan, which has been one of the destinations for Chinese players to resell new energy vehicles in the past few years.

The story began on March 16 this year, when Bird Brother was chatting with an old friend who was setting up a tent together by the reservoir. They mentioned that they had a mutual friend who eventually married a man from Kyrgyzstan. The man was recently worried about how to get a new energy vehicle made in China.

When it comes to selling new energy vehicles to Central Asia, many people who want to get involved are most worried that there will be no one to pick up the vehicles when they arrive in Kyrgyzstan.

Based on the market information at the time, they intuitively felt that this could make money and was worth doing.

That afternoon, Bird Brother was on the phone, understanding the market, determining the route, and finalizing the exit port...

His friend, Ango, also transformed himself and became his partner that afternoon.

A few days later, Bird Brother and Ang Brother set out from Guangzhou with a vague fantasy and began a journey westward with an uncertain future.

Supply, supply, supply

Starting from the end of 2022, the neighboring Central Asian countries without an automobile industry suddenly showed a huge demand for new energy vehicles made in China. Rumor has it that as long as a car is pulled to the capitals of Central Asian countries such as Bishkek or Dushanbe (Tajikistan), people will rush to buy it.

The root cause is probably that these countries are oil-poor and have been importing refined oil for a long time, but they have abundant electricity resources. Therefore, new energy vehicles are both face-saving and money-saving for local wealthy people.

Thus, the long-silent traditional Silk Road returned to its bustle.

Thanks to the efforts of traders, middlemen, and "smugglers", the two customs ports in Xinjiang are very busy.

According to data released by the customs, in the first two months of this year, the export value of electric vehicles in Kashgar increased by more than 8 times compared with the same period last year; data from the Horgos highway port showed that the number of commercial vehicles exported in the first half of this year exceeded 75,000.

Ango’s task is to find a car.

His real identity is a big boss in the Internet sales sector, who is sensitive and accurate in information. After screening, he anchored the purchase model to Ideal L9.

"This car is the most popular in Bishkek. In some cases, the domestic selling price is close to 400,000 yuan, but it is sold for more than 800,000 yuan there," said Ang.

But the first question is,Ideal AutoIn Xinjiang, there is only one direct-sale store in Urumqi, about 1,500 kilometers away from Kashgar.TeslaSame: place an order online, and then schedule the pick-up based on production capacity.

According to market information in 2023, the delivery period of L9 is about one to two months.

Humans are the makers of rules and the creators of unspoken rules.

Ango found an intermediary who was integrating automobile resources, and the intermediary found a car owner who had previously ordered a car but changed his mind when picking up the car.

Ango decisively paid a deposit of 2,000 yuan to lock in the car. During that period, getting a car meant money, and following the rules meant watching the money slip through your fingers.

They didn't even bother to consider whether that person was specifically making money by reselling orders. Anyway, after locking in the source of the car, the two rushed to Urumqi.

That day was March 25th, the ninth day after they set up the tent.

During these 9 days, Bird Brother's task was to find companies in the "reverse chain" that provided qualifications and were willing to help them with the process. For example, some companies handle imports and exports, some financial companies are responsible for international settlements, and there are cross-border logistics and so on.

As a result, when they arrived in Urumqi with the pace of life and efficiency of first-tier cities, they found themselves somewhat out of place there.

It took them almost a week to get the agent's car purchasing quota into their own name.

On the 30th, I rushed to the delivery center and the staff told me not to worry because the car was on the way. But in fact, Bird's car was in the parking lot, but it was Saturday, a day off.

"The rhythm here is different, not like in your city," someone said to Bird Brother.

Money is always tempting. At 6 pm that day, Bird and An successfully picked up the truck. Less than 2 minutes later, Bird received a call from the truck driver. All that was left was to load the truck and head to Kashgar, 1,500 kilometers away.

Dominoes

Seeing the L9 leaving the delivery center, the two partners flew from Urumqi to Kashgar.

According to Bird Brother's expectation, as long as he sleeps in the hotel, his L9 will appear at the agreed parking lot near the port to unload the goods. Then he will go through customs declaration, customs clearance and collect the money.

That's what they thought at the reservoir.

But on the night of March 30, Urumqi was hit by a heavy rainstorm, and the highway to Kashgar was closed, leaving the flatbed truck stuck on the road. Even if the truck arrived just in time for the Qingming Festival in early April, the end result would still be waiting.

The two of them simply started a city walk in Kashgar.

Bird Brother discovered that in this frontier city, with the blessing of modernization, new energy vehicles have become a "specialty" in the modern context. "Because selling cars can make money, people from all over the country who want to make money flock here. It is thriving here, and there are not even enough karaoke halls."

But he vaguely discovered that when the "speculators" across the country started to make money in this field, people with large amounts of capital would appear, and even if they did not make money, they would still seize market share.

"When we went there, we found that some people were relying on the advantages of capital to make profits, just like Internet companies selling goods now."

But for the people of Kashgar who have lived here for a long time, their original life pattern has been disrupted. Even the small restaurants they often go to are crowded with unfamiliar faces. It is not so much that their way of life has been disrupted by the new model, but rather that in the eyes of outsiders, the living habits that the locals have adhered to for hundreds of years are being changed.

Bird brother recalled that local young people were surprised at this way of making money and expressed their desire to work in coastal areas.

Faced with this question, he was a little puzzled: We are pursuing their tranquility and satisfaction, but they yearn for the hustle and bustle of the city. "What is the purpose of human life?"

The feeling of sadness only lasted for a moment. The Ideal L9 was the result of their many years of savings, so they couldn't help but be distracted.

As soon as the Qingming Festival holiday was over, Brother Bird hurried to register his car.

This is an important step in cross-border car transactions, which is equivalent to the car being transferred from the dealer to an individual (registering a license plate). However, if you want to go through customs, you cannot do it with your own identity, so you need to register the car under the name of an import and export company, omitting the vehicle's identity and declaring/clearing customs as a bare car. When you arrive in Kyrgyzstan, you need to register the car under the name of a local company first, and then transfer it to the buyer.

But when he went through the registration procedures, he was told that two paper documents required by the import and export company were missing.

The middleman showed his "strength" at this time: three days after they paid an additional fee, all the problems were solved.

On April 10, L9 had all the conditions ready to pass.

Niao Ge and An Ge thought that there was no problem with the car and all the vehicle documents had been prepared, so they returned to Guangzhou together, waiting for the Kyrgyz friend they had never met before to take over, and then wait to collect the money.

But when he returned to Guangzhou, incredible questions began to explode one after another like firecrackers.

The first one was that the boss of the international logistics company was one day late than the promised delivery time.

This resulted in the buyers in Bishkek being left empty-handed when the transaction was completed at the agreed time and place.

The buyer was so angry that he said he was going on a business trip and would come back to do the transaction.

Brother Bird explained for half a month, and when the customer came to pick up the car at the agreed time, the customs clearance documents accompanying the car mysteriously disappeared again.

Customs clearance documents are like ID cards for exported cars. If you want to reissue them, you have to go to the delivery center or 4S store and start all over again.

Otherwise, a car worth 800,000 yuan in Kyrgyzstan would be considered an "illegal car", unable to be registered or registered, and could even be seized.

Thinking about it now, Bird Brother still has no idea where these so-called customs clearance documents went.

In order to complete this procedure, Bird Brother contacted the logistics company. Someone told him that it might be that other car dealers had taken the information by mistake when unloading the car, or that their car might have been set up.

Brother Bird, who has been collecting chestnuts for more than ten years, is no rookie in the business. He sorted out his thoughts and decided to contact the customs again, thinking that he could obtain the electronic version of the information through the customs and then apply for customs clearance documents in Bishkek again.

Sure enough, the customs in Bishkek had an electronic backup and clearly marked prices. "I paid $500 and the vehicle documents were processed."

Whether this information has really been lost, Bird Brother said it is Rashomon.

He gradually realized that the so-called doubled profits were just a big and general rhetoric that no one wanted to embarrass.

The actual situation is that every link in the "reversing" chain: the price markup of vehicle purchase, transportation, insurance, customs clearance and other handling fees, international transportation fees, and those "obscure" and inhumane costs, the vehicles and procedures are all in the hands of others, and individual "reversers" encounter problems and can only solve them with money, so with each link, their profits are a little less.

"Presidential Candidate"

When everything was ready, just as Bird Brother was waiting for the customer to pick up the car again, the Kyrgyzstan "old friend" who helped contact the buyer disappeared.

Before this, they had been contacting the seller through an "old friend". This time, the "old friend" was very evasive, either not replying to messages or saying that their child had fallen from the upper floor and they had to go to the hospital to take care of him. The date for picking up the car was repeatedly postponed.

At this time, Bird Brother and Ang Brother had spent more than 400,000 yuan in cash, but only received about 200,000 yuan (30,000 US dollars) in advance payment.

They realized that everything was not as simple as their "old friend" said.

They turned to other friends in Kyrgyzstan for help and finally discovered that the "old friend" had actually received the full amount from the buyer and gave a down payment of $30,000. The remaining $30,000 (including the introduction fee) was becoming restless in his hands, which gave him an idea: if the $30,000 could be doubled in the casino, then he could earn $30,000 for free.

He wrote the beginning of the story, but ended up losing more than 30,000 US dollars, which led to the absurd scene of the child falling from the building.

At this time, the speechless Bird Brother and Ang Brother were already planning to find a new buyer, which meant they could swallow up the $30,000 advance payment.

But they felt a little reluctant because their kindness was stuck in their throats.

So they decided to contact the buyer directly and told him frankly, "The car is in Bishkek. You can pick it up after paying the balance. If you don't pay, the previous advance payment will not be refunded."

This trick worked.

In addition to being willing to pay the final payment, the other party also inadvertently revealed that he was a well-known figure who had participated in the 2023 Kyrgyz presidential election and ranked third in the final vote.

This information confirmed many rumors on the Internet at the time: those who bought China's high-end new energy vehicles in East Asia were all well-known figures.

As for the "old friend" who made more than 30,000 dollars, Bird said: That person is running for president, can't he handle a car dealer?

On May 20, two months after setting up the tent, Bird Brother and Ang Brother finally completed their first cross-border business.

He still remembered that the man who ran for the "presidential election" told him that if he encountered any problems in Kyrgyzstan in the future, he could help him resolve them.

Bird even boasted in his circle of friends: If we can’t do business, we can make friends. This time, the friend is a presidential candidate.

From 4 million to more than 10,000

In fact, at the beginning, they just wanted to understand the route and process in the first cross-border trade. Although they didn't expect to make a lot of money in the first order, they thought that if they sold one car worth 400,000 yuan a month, they could make at least 40,000 yuan after deducting the cost according to the tax refund and price difference. In other words, with a principal of 400,000 yuan, they could make 400,000 yuan after 10 months of repeated transactions.

"Just think about it, if we can sell 10 cars worth 400,000 yuan every month through loan mortgages, can we make 4 million yuan in 10 months?"

This is how they calculated it when they set up the tent.

However, it took almost 90 days from the time the L9 landed in Urumqi at the end of March to the time the payment was received, which was two and a half months longer than the planned 15 days.

In addition to the adventures they encountered such as scheduling, heavy rains, holidays, delayed shipments, and "old friends" taking money to gamble, they also had to wait an extra month for their refunds because of problems with the refund cycle at the location of the tax refund company that handled their refund.

After careful calculation, the actual transaction price of the car was 64,000 US dollars, which was approximately equivalent to 450,000 RMB based on the exchange rate at the time. After deducting various costs, the profit was less than 40,000 RMB, and the bulk of the profit was actually the tax refund.

Bird brother joked, "In the past three months, each person has only earned more than 10,000 yuan. If we only rely on the difference in the price of the car, we can't even cover the shipping costs."

In fact, if they had not bought the "Free Flight" at the beginning of the year, they might not have made even 10,000 yuan in the past three months. After all, for Guangzhou, air tickets are the biggest expense, plus more than 20,000 yuan for food, accommodation, and reception, and hiring 8 companies to handle formalities and account handling. After deducting these expenses and the frequent "accidents", the profit is not satisfactory.

In addition to policies and various middlemen, more and more "smugglers" have flocked to Kashgar, and "roll prices" have become the norm, so there is little profit left.

After all, it’s not that this business is bad, but the threshold for being a “smuggler” is getting higher and higher.

Bird and Ango are only in their 30s. They thought they had mastered most of the world's information on the Internet. In fact, after this trip, they realized that the fantasy of wealth created by the Internet would be shattered by reality one by one.

My gaze returned to the Hunan restaurant.

After three rounds of drinks, Bird said that he had recently received an order for two Ideal L9s to be shipped directly to Moscow. He was hesitant, there was definitely profit, but in Russia, how to bring the currency back was a problem.

Bird and Ango define their development as an unexpected result. People dance here, and their footsteps are the drumbeats of the hustle and bustle. When the tax rebate bonus disappears, no one knows whether this place will return to peace.

Brother Bird said that it is easy to review this matter because people have a God's perspective, but in fact, every time a new problem arises, no one knows what will happen next. Such life experience is enough once.

(Bird Brother and An Ge in this article are pseudonyms.)