As dusk fell, Simon and Sophia finally emerged from the master bedroom of the villa on the hillside by Lake Como.
After dinner, Sophia dressed up with care, and the two headed to downtown Milan to attend a wine auction at Christie's Milan branch.
Since acquiring Christie's a few years ago, Sophia not only revitalized the storied auction house, but also expanded its business, aligning it perfectly with Melisandre's operations. Christie's became a de facto marketing platform, regularly auctioning rare items from the companies under Melisandre, such as fashion, jewelry, watches, and wine. For most people, anything worthy of auction inherently seemed more valuable, raising the brand prestige of Melisandre's many subsidiaries.
"I've set up a team specifically to source Chinese artifacts, mainly paintings and porcelain. There are so many Chinese antiques scattered across Europe, and the prices are surprisingly low. Recently, we acquired a Yuan Dynasty blue and white porcelain piece that I remember you once mentioned. It cost around $30,000. The seller was an elderly British man who said his father brought it back from China years ago."
On the drive to Milan, Sophia spoke to Simon about some Christie's business matters.
Major auction houses don't solely auction items from collectors; often, they also conduct their own in-house transactions to boost market value, though they keep this practice discreet.
Once, in conversation with Sophia, Simon suggested stockpiling Chinese artifacts across Europe. As China's economy grows, more wealthy Chinese will naturally be drawn to collecting, just as Japanese tycoons bought up Impressionist paintings in the 1980s. At that point, Christie's could auction the collection to substantial profit.
Hearing Sophia mention the recently acquired Yuan Dynasty blue and white porcelain piece piqued Simon's interest, especially given how such pieces had soared in value in his memory. "What's the piece specifically?"
"It's a two-foot-tall jar with Chinese dragon and peony patterns, remarkably well-preserved. A Chinese expert said it's of a quality that could belong in the Palace Museum—equivalent to the British Museum's level. So, quite precious."
A two-foot-tall Yuan blue and white porcelain jar featuring dragon and peony motifs, Palace Museum quality.
Simon considered its possible future value and was taken aback. A piece that size—about 60 centimeters—was rare, given that larger porcelain pieces are harder to preserve. It was impressive to think how these items managed to survive the long journey to Europe back then.
"Only $30,000, are you sure?" Simon asked.
Sophia smiled, "It's valued at $2 million now, which is why I thought I'd tell you. Not bad, right?"
Simon kissed her cheek in admiration and reminded her, "Don't sell it for at least ten years."
Sophia looked a bit puzzled. "That would make for a long return cycle."
In business, fast returns are essential. A one-year, 30% profit on a $1 million investment is far better than a 100% return over ten years. In the collectibles market, unless it's for pure collection, investment cycles are typically short, two to five years at most. In the early 2000s, Simon thought they could sell this jar for many times its current estimate, but even then, it wouldn't be the peak.
Rather than explain further, he just said, "Trust me. Also, where is it? I'd like to see it."
"It's in a secure vault in Geneva, but I can have it sent to North America if you'd like."
"Better to wait until my next trip to Switzerland."
Imagining the future multi-million-dollar artifact at risk in transit was enough to make even Simon feel cautious.
"Alright," Sophia agreed, secretly pleased that this would give Simon more reason to visit. She resolved to acquire more Chinese antiques likely to interest him.
As they continued chatting, their car entered Milan. Sophia's phone suddenly rang. After a brief conversation, she told Simon, "Gianni Agnelli and his wife will be attending, and he'd like to have a chat with you."
Gianni Agnelli—the head of Fiat.
Simon immediately guessed what Agnelli likely wanted to discuss.
Sophia elaborated, "Fiat seems interested in the Chinese market but wants to get some insight from you."
Simon's recent visit to China continued to ripple through the business world.
Although he declined the Apollo Management team's proposal to invest in Geely, many foreign car companies quickened their pace in entering the Chinese market. For example, General Motors had started negotiations with Shanghai Automotive last year. The process, previously slow, sped up drastically after Simon's visit, and they expected to finalize an agreement soon, a full year earlier than in the original timeline.
As for Fiat…
Recalling some historical details, Simon couldn't help but shake his head. Fiat had twice tried to enter China, only to fail both times—a testament to Fiat's own challenges.
However, given his deep-rooted connections in Italy and many collaborations with the Agnelli family, practically Italy's royalty, Simon was willing to give Agnelli some face and nodded, "Alright, let's chat."
Noticing his expression, Sophia asked, "You don't seem interested in them?"
"It's not that," Simon replied. "I just don't think Fiat will succeed in China."
"Why not?"
"Besides Italy, can you think of any other overseas market where Fiat has thrived?"
Sophia thought about it and couldn't.
Fiat was the quintessential local giant, with over 90% of the Italian automotive market, thanks to half a century of government favor. But internationally, except for some luxury brands like Ferrari, Maserati, and Alfa Romeo under Fiat, the company had no major successes. Even these luxury brands hadn't fared well recently. Maserati, for instance, was constantly being sold and merged due to poor performance.
Fiat had grown complacent within Italy. But China's automotive market was still very much a seller's market, so Fiat could have found success if it made a serious effort. However, with an overly cautious and narrow-minded approach, Fiat ended up acting out of arrogance, protecting its own technology and refusing to adapt to China's needs.
Ultimately, it was arrogance that led to Fiat's failures in China in both 1999 and 2010—two golden windows for entering the Chinese automotive market.
Fiat then fell into a downward spiral and eventually merged with Chrysler. This deal technically left Fiat in the lead, but in reality, it opened Italy's automotive market to American capital and cost Fiat its independence.
They arrived at Christie's Milan headquarters, where the auction was set to begin in about ten minutes.
While waiting in a VIP lounge, Gianni Agnelli and his wife, Marella, also arrived early, and they exchanged greetings with Simon and Sophia.
At 75, Gianni Agnelli had served as Fiat's chairman for thirty years, beginning in 1966. His brother Umberto Agnelli, aged 62, was Fiat's CEO. In the original timeline, after Gianni Agnelli's death, control of Fiat passed to Umberto's side of the family, following the 2000 suicide of Gianni's only son.
Agnelli had come specifically to discuss entering the Chinese market. Recently, he'd taken an interest in China, but due to various Western biases, he remained hesitant about investing there despite Simon's example.
Simon spoke candidly: "Gianni, the typical arrangement in China's automotive industry is that Western companies provide technology and core components, while the Chinese side supplies the funding. If Fiat were to enter China, you'd essentially be selling technology, and importing parts would bring additional revenue. And as for the technology itself, you wouldn't even need to provide the latest. Look at Volkswagen; their Santana, a best-seller in China, is two generations behind the latest model in Europe."
Gianni, holding an unlit cigar, nodded but remained skeptical. "Simon, my worry is precisely that. Isn't it obvious that China's ultimate goal is our technology? Once they've mastered it, do you think they'd continue to rely on us?"
This was a common concern among foreign companies.
Simon shrugged. "Or consider it this way, Gianni: if Fiat doesn't partner with China, once their automotive industry takes off, they'll already have existing partnerships, and you'll find it incredibly difficult to enter later. General Motors is close to finalizing a deal, and other major car companies are exploring partnerships. Fiat doesn't have much time."
"Then why did you turn down the proposal to partner with a Chinese automaker?" Agnelli asked, catching Simon slightly off guard.
He quickly realized Agnelli was referring to the Geely proposal.
Simon wasn't surprised that Agnelli knew about this.
Just as Simon wasn't surprised that Agnelli was aware of his arrival in Italy the moment he landed. Simon's European trip had a sort of territorial inspection quality, letting people know Westeros was in the region.
With this in mind, Simon replied, "It's different, Gianni. The Westeros Group isn't in the automotive industry. Besides, China's automotive industry is currently monopolized by state-owned enterprises. That proposal was for a private company, and investing in it might have upset some state-owned enterprises. State-owned companies are closely tied to Chinese leadership, so it wasn't worth the risk."
This explanation seemed to click with Agnelli.
Local dominance.
Fiat's position in Italy was similar. Foreign automakers had to either partner with Fiat or face obstacles.
Agnelli chewed on his unlit cigar and, after some thought, proposed, "Simon, what if we partner together?"
"Hmm?"
"We could enter the Chinese market together. I'd feel more secure with your involvement, given your network in China."
"But if we split, each
would only get 25%, totaling 50%. Would you be satisfied with that?"
Agnelli chuckled, "As long as it succeeds."
"Better not," Simon declined with a smile. "Gianni, here's some advice if you do enter China: don't be overly cautious or stingy. China's automotive market could rival North America's within the next decade, with sales in the tens of millions. Don't doubt that—just look at the growth data in other Chinese industries. If Fiat bets big now, China could become your largest overseas market."
A glimmer of interest appeared in Agnelli's eyes, though he quickly replied, "But why wouldn't you join?"
Simon met Agnelli's gaze. "If you're willing to hand me control, I'd be more than happy to partner up."
Agnelli reflexively shook his head.
Simon smiled. "See, we're at an impasse. Honestly, I'll enter China's automotive market eventually, but not yet. The timing isn't right, and the Westeros Group isn't set up for it. But in a few years, when our preparations are complete, we'll be ready."
"By your logic, maybe I should wait as well, perhaps for China to join the WTO."
"Certainly, that's an ideal moment," Simon agreed. Fiat's first attempt in China was indeed around China's WTO entry. "But if you wait, you'll miss a valuable head start. Fiat has the means to move now."
At this moment, an attendant informed them it was time to enter the auction room.
Their conversation ended there.
Simon noted Agnelli's indecision, but he had already said all he needed to. The decision was up to him.
Had Fiat not repeatedly failed in its attempts to enter China, or if Agnelli weren't so hesitant, Simon would have considered a partnership, even without control. As things stood, he had no interest at all.
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