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InterviewNotesInterviewDate:Feb.23,2000IntervieweeName:Mr.MengXianghuiIntervieweePosition:ChassisSalesDepartmentManagerCompanyandAddress:FAWSalesCompanyYingChunRd.LuYuan,Changchun,130011InterviewerName:BillHe,JaneXuBackgroundMr.MengjusttookovertheChassisDepartmentandisnotcrystalclearaboutchassisbusiness,more,heisprettybusyinthissalespeakseason.Mr.MengactedasthemanagerofTruckSalesDepartmentbefore1998,1999chassisandOEMsalesunder“MediumandHeavyTruck”title1998SalesVolume1999SalesVolumeIncrease/decreaseChassis22,86538,18067%OEM39,84332,147-20%Chassissalesvolume’ssharpgrowthin1999isdueto:3160(9tondouble-bridge)chassis’salesrightwastransferredfrom“ZhongXingCheChang”toFAWSalesCompanyin1999—thishasdirectlyresultinallthe67%chassissalesvolumeincreasein1999OEMsalesvolumedecreasein1999isdueto:2TonKing(a4Tontruckindisguise)wassoldunderthe“MediumandHeavyTruck”Salestitlein1998,in1999,itwassoldunder“LightTruck”Basically,thereisnobiggapinsalesvolumebetweenchassisandOEMtrucks--bothcountfor50%ofthetotalsales,butwiththedevelopmentoflogisticsbusiness,chassisfitfordifferentusage(self-dumping,gas,oil,etc.)islikelytohaveamorebrightfutureChannelFAWmainlysoldchassisto1.RefittingFactoryIn1999,FAWsold5,000chassisto92refittingfactoriesallaroundChina.Onlyfewamongthe92haslargescale.AlmostallthetruckrefittingfactoriesnotonlyhavebusinessrelationshipwithFAWbutalsowithSAWandotherFAWcompetitorsUsually,therefittingfactoryhasitsownsalesnetwork,e.g.Oilcompanies,etc.Itdirectlysellstherefittedchassisthroughitsownnetwork2.Dealers3.KeyclientAccordingtotheChassis/OEMsaleschartprovidedbyTruckSalesManagementDept,FAWsoldaround2,200chassistoitskeyclientssuchasChineseMilitaryin1999ProfitabilityToRefittingfactories,averageprofitrateperchassis(refitting+sales+rebate)isaroundRMB4,000Mr.MengisnotclearabouttheprofitrateofdealerswhodorefittingbusinessAveragepricegapbetweenFAWchassisandFAWOEMisaroundRMB20,000KeyIssuesTheOEMFAWprovidednowisonlythechassisequippedwithstandardcaseThestandardcaseswereproducedbytheFAWCaseFactory.Withlessandlessmarketdemandforstandardcase,theCaseFactoryisattheedgeofbankruptcy.AccordingtoMr.Meng,theCaseFactoryiscurrentlyunderreform,itmightbemanagedbySiHuaninthefutureMr.Mengthinkthechassissalesshouldrelyontherefittingfactoriesoverthecountry,it’sunnecessaryforFAWtocollectalltherefittingbusinessunderitsownbecauseof:RefittedtruckmadebyFAWwillsoldatanin-competitivepricesinceitneedstobeartheextrafinancialburdenofwholeFAWLocalrefittingfactorycouldprovidemoreflexibleservicetofitforthelocaldemandSomerefittingfactoryhasitsownsalesnetworkandFAWshouldfullyutilizeit.Mr.Mengwillmainlyworkontherefittingfactorysidethisyearastoraisetheoverallchassissalesvolume