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InterviewNotesInterviewDate:Feb.18,2000IntervieweeName:Mr.WeiChaoming,Position:SeniorManagerCompanyandAddress:FAWSalesCompanyYingChunRd.LuYuan,Changchun,130011Telephone/Fax:0431-5904147/0431-5909761InterviewerName:WeiZhu,PaulGao,BillHe,AnneWang,JaneXuSalesNetworkFoursalesregionofFAWtruckbusinessareEast--Shanghai;Zhejiang;Jiangsu;Anhui;Shangdong;Henan;HubeiNorth--Heilongjiang;Jijin;Liaoning;Neimeng;Tianjing;Beijing;Hebei;ShanxiSouth--Guangdong;Guangxi;Fujian;Hainan;Yunnan;Guizhou;Hunan;Jiangxi;West--Shan(3)xi;Gansu;Ningxia;Qinghai;Xinjiang;Sichuan;Xizang;ChongqinNote:Province/CityinBlue:Achievegreatsalesgrowthin1999Province/CityinRed:SalesdropdownseverelylastyearMostFAWdealersareformallyChinaMachinery&Electricitycompanies;theirbusinesstodaycoverdifferentautoproductsandbrandsSalesnetworklayersandjobdelegationisnotclear.ThereisnoclearroledefinitionforFAWdistributorsanddealers,theydooverlappingworks,i.e.,bothareengagedinwholesaleandretailbusinessesComponent&ServiceComponentssalesofFAWhasgraduallydroppeddowntheseyears,majorreasonsare:Componentbuyersturntopurchasethecomponentdirectlyfromproducer(FAWoutsourcepartofitscomponents)End-userwhocarethetimelyrepairmuchmorethanthelife-lengthofthetruckusedtobuylow-endsubstitutenearbyComponentNetworkComponentCenter:10Large:Shanghai;Tianjin;Guangzhou;Wuhan;BeijingSmall:Shangdong;Xiameng;Yunnan;Guizhou;Chengdu1FranchisedStore:300–mostofthempurchasethecomponentdirectlyfromproducerCurrentservicecentersworkforalltheFAWbrand(exceptthebrandofstockcompany,e.g.JinBei)Thereisnoclearcomponentpurchaselimitationfortheservicecenters,theycouldgetthecomponentfrom:1)ComponentCenter2)FAW3)ComponentproducerPricing&FinanceThreepricesareusedfortruckselling:1.Anetworkprice–thepriceofferfordealer*SomedealersellthetruckatthepricebelowtheAnetworkprice,theygainthemoneybackthroughtheyear-endrebate*RebatesystemofFAWtruckdivision:Todealersprovide3in1service,maximum1.2%oftotalannualsalesareofferedbytheendoftheyearTodealerswithout3in1service,maximum0.5%oftotalannualsalesareofferedbytheendoftheyearThe0.7%gapbetween1.2%and0.5%isusedtoencouragedealerforestablishingthe3in1service2.Wholesaleprice3.RetailpriceFAWSalesCompanyhaveitsownaccountbuttheusagerightoftheaccountbelongstoFAWPlanningandFinanceDepartment,thesystemcouldhardlystimulatethefurthersalesachievementinsidethesalescompanyFinancingbusinessisonlyservedtoFAWinternallyonloan,investmentatasmallscalebyFAWFinancingCompanyWarehousing&SupplyChainManagementFAWstorescertainleveloftruckinventoryatitslargedealers’warehouse,FAWmaintainstheownershiptotheinventoryuntiltheyaresoldandcanselltheinventorytootherdealers.ThereisnointernalITsystemsupportordering,delivering,etc.FAWsalescompanymanuallycontrolsthewholeprocessofsales.It’shardforFAWtogettheon-timefeedbackfrommarket,informationoftherealend-userandfuturemarkettrend2Thesetwopricesactuallydoesn’tworknowadaysProduction&SalesPlanningAnnualproductionplanandsalesplanaremadebyFAWPlanningDepartmentmerelybasedoninternalestimationratherthantherealcaseinthemarketFAWPlanningDepartmentheldaproduction-salesbalanceconferenceeverymonthPlanningdepartmentdelegateproductiontaskonamonthlybasetoProductionDepartmentPlanningdepartmentdelegatesalesplan(salesvolumeandprice)toFAWSalesCompanyonamonthlybaseCompetitionInternal:Inthepastfewyears,subsidiaryfactoryofFAWlocatedinQingdaomanufacturesandsellstheJieFangtruckwithimprovedfeatures.QingdaoisabletopriceitsproductsbelowFAW’sbecauseithasmuchlowerfinancecost(FAWhasoverRMB1billionofA/Rfromitsdealers).FAWTradingcompanyhaspurchasedthedistributionrightsoftheQingdaofactorysalesstartingthisyearExternal:CompetitorofFAWintruckbusinessisDongFengMotors(DFM),keycustomerofDFMisChineseMilitaryInternalOrganizationofFAWSalesCompanyLeadinglevelorganizationLevel1(Headcount:4)Mr.Zhao—GeneralManagerMr.Jiang—ViceGeneralManager(Sales)Mr.Li—ViceGeneralManager(PlanningandFinance)Mr.Zhang—ChairmanofCommunityLevel2(Headcount:13)6DepartmentManagers5RegionManagers1ChairmanofWorkUnion1DistrictManagerofQindaoLevel3(Headcount:40)12DepartmentHeader28DistrictManager3SeniorManagerJunior(Vice)Manager