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InterviewNotesInterviewDate:Feb.22,2000IntervieweeName:Mr.Jiang--ManagerofSalesDepartmentPosition:Mr.MaAijun—SalesDepartmentCompanyandAddress:FAWSalesCompanyYingChunRd.LuYuan,Changchun,130011InterviewerName:PaulGao,JaneXu1.Organizationstructureandjobdescriptions:(PleaserefertoinformatioprovidedbyComprehensiveManagementDepartment)FAWTradingCompany’ssalesdepartmentisresponsibleforthesalesofFAW’slight,mediumandheavydutytrucks.Ithassevensub-departments:ChassissalesLighttrucksalesWholevehiclesales(mediumandheavytruck)SalesmanagementMarketingCommercialtraining(fordealers)Operations(retail,fleetsales,rental,loans,etc)2.Salesnetwork1)OrganizationChartofsalesnetworkFAWhasequityinmanylevelonedistributorsthroughinvestmentintheformsoftrucksorconversionofdebttoequity.Thesedistributorsarealltraditionalstateowedmechanicalequipmentdistribution,vehicledistributionandmaterialdistributioncompaniesLeveltwodistributorsaretypicallysmallerthanlevelonedistributors,andwithoutFAWequityinvestments1Distributors(around100)Franchiseddealers(around60)ServiceCenter(430)LevelOneLevelTwoLevelThree1/3ofservicecentersisauthorisedtosellFAW’strucks,somegoodonesareabletosell500-600ayear.Butoverall,salesthroughservicestationsisverysmallcomparedtodistributors.AlldistributorsengageinbothwholesaleandretailbusinessWholesalepricetolevelone,twodistributorsandservicestationsisthesameDistributorsalsosellchassis,theyaccountforaround40%ofFAW’schassissales(theother60%issolddirectlytore-fittingfactoriesbyFAWTradingCompany)3.RebatingsystemFAWhasasalesrebatesystemtoencouragedistributorsales.In1999,themaximumlevelofrebatefordistributors(level1and2)was1%oftotalpurchase.Butthescalevariesbyregion,e.g.,inJilin,adistributormayneedtosell3thousandtruckstoqualifyfor1%ofrebate,whileinQinghaiprovincewhereFAWisweak,adistributormightbeabletoqualifyfor1%rebatewith100trucksalesForservicestations,salesrequiredtoqualifyforrebateishalfofthatfordistributorsForyear2000,FAWwillintroduceanewrebatesystem:amaximum0.5%ofsalesrebatewillbecalculatedquarterlydependingonsales(salesquantityrequiredtoquantifyvariesbyregion).Anothermaximumof0.7%ofrebateiscalculatedattheendoftheyear,basedonasetofcriteriatoencouragedistributorstodevelop4in1capability,maintainpricestabilityandorderreliability4.Pricing&TransportationchargeLowestWholesalePrice(1)=Salesexpenseapportion(2)+TransferpricebetweenFAWsalescompanyandmanufacturecompanyNote:(1)FAWGroupPlanning&FinanceDeptdecidelowestWholesalePrice.(2)TotalamountofsalesexpenseisthebargainingresultbetweenSalesCompanyandFAWPlanning&FinanceDept.;Salesexpenseincludingexpenseonadvertising,finance,sales,aswellasstaffsalaryandbonus.TransportationChargeIftransportationcharge