FAW-_yunnanno.1_0304.docVIP免费

YunnanNo.1RepairFactoryINTERVIEWDATE:5May2025INTERVIEWERNAME:PaulGaoIntervieweeNameMr.YangandMr.GaoPositionDeputyGeneralManagerCompanyandAddressYunnanNo.1RepairFactoryTelephone/Fax0871-8182830BackgroundYunnanNo.1repairfactoryisundertheYunnanprovincialtransportationdepartment.Itusedtobeshipmakingfactory,andonlybecameavehiclerepairshopinthe1970swhenthegovernmentreclaimedlargeareasoflakeanditlostaccesstothelake(ErHai)ItisprobablytheonlyenterpriseundertheYunnantransportationdepartmentthatisstillprofitable.Itwentthroughanorganisationalrestructuringbyconvertingthefactorytoashareholdingcompanyinwhichemployeesownabout50%ofthesharesTheFactoryhasover700employees,andithasthreemainbusinessesVehiclerepair:itservices38OEMs,includingpassengercars,mini-vans,trucksandengineOEMs.ItalsoservesDongFengtrucks,butisnotanauthorisedservicestationforDongFengtrucksVehiclere-fitting:itre-fitsallmakesoftrucks,mostlyDongFengtrucksVehicleandpartssales:ItisaFAW-VWdealer,aswellassellinganythingtheycangetholdofEventhoughithassales,serviceandpartscapabilities,itisnotreallya“3in1”distributor,becausethesales,serviceandpartsretailfunctionsareallindependentaccountingentitiesundertheNo.1RepairFactory.EachfunctionservesmultipleOEMandbrandswithnoexclusivity.ItsservicecoverageincludesthewholeofYunnanprovince.Atthemoment,itdoesnothaveanyoutletsoutsideKunming,sooftentheytravellongdistancestoservicecustomers.Sometimes,evenasfarasGuangxiandGuangdongprovince.SalesIn1999,totalturnoverfromthethreebusinesswasRMB143million,including:RMB24millionfromvehiclerepair1RMB13millionfromvehiclere-fittingTherestarefromvehicleandcomponentsales(1/4ofwhichispartssales,whichwasaboutRMB25million)However,itonlymadeprofitofRMB1.8millionbeforetax,includingRMB400Kfromservice,outofwhichJieFangserviceaccountedforRMB150KThereasonsforthelowprofitabilityare:Strongcompetition.Kunminghasover3,000repairshops,thewholeofYunnanProvincehasover13,000vehiclerepairshops.KunmingNo.1doesnothaveanycostadvantageoveritsprivatelyownedcompetition.ItsaveragehourlyservicelaborcostisRMB12Inflatedcost:TheNo.1factoryexpensedcertainfixedassetinvestmentinordertominimiseprofittheyhavetopaytoitsparentcompanyIn1999,No.1soldaround600FAWproducts,including200JieFangbrandedproducts(mostlyLiuzhouandlight/minitruckproducts)ItsprofitoneachJieFangtrucksoldwasaboutRMB1,000,allofwhichcamefromyearendrebate.Thisyear,itwillnotqualifytoreceivethe1%yearendsalesrebatebecauseofitslowvolumeandlackofthreeinoneoperations.Mr.YangofferedthefollowingpositionstodefendYunnanNo.1’sseparateoperatingstructureforsales,serviceandpartsItwouldcreatetoomuchcomplexityforNo.1ifitsetsupseparate“3in1”dealershipforeachOembranditrepresentsNo.1iscurrentlyabletooffergoodcustomerservicethroughcoordinationamongitssales,serviceandpartsfunctions.CustomerswhopurchasevehiclesfromvehiclesalesdepartmentisgivenaVIPcardwhichentitlesthemtopartsandservicediscountsatitsservicestationsandpartsshopsNo.1hasincreasedtheshareofrevenuerepairshopsgetfromFAWtruckserviceinordertoencouragethemtoprovidegoodcustomerservicetoFAWcustomers:Typically,repairshopskeep36%ofservicerevenueForFAWproductsoldbyNo.1,repairshopskeep50%ofservicerevenueForFAWproductssoldbyotherdealers,repairshopskeep46%oftheservicerevenueFAW-VWhasacceptedNo.1’spracticeofhavingindependentsales,serviceandpartsoperationsunderthesameparent.HequestionswhyJieFangcouldnotdothesame2Ingeneral,Mr.YangishappywithitsrelationshipwithFAW,includingsettlementspeedforwarrantyservicesprovidedwhichnormallyisdeductedfrompartspurchaseSupportsneededfromFAWMr.YanghopesFAWcanprovideitwithcreditsupportforhimtodevelopsalescapabilities,namely,hewantsextendedcredittermsfortrucks.HesaidthatNo.1doesnotoweFAWanyvehiclemoney,itisactuallyFAWwhostillowesNo.1thewarrantyservicefeesFAWneedstoincreasethewarrantyservicelaborfees.FAWcurrentlygivesNo.1RMB10forwarrantyserviceprovided,whichislowerthanwhatNo.1chargesfornon-warrantyservice(12%)FAWneedstoimprovetheavailabilityofpartsforitsnewmodeltrucks.FAWintroducedmanynewmodelsinrecentyears,butpartsavailabilityisabigproblem.Theyoftenhavetotakeapartnewtrucksinordertogetpartsforservice.ObservationNo.1isnotagoodcandidatefor“3in1”dealershipasitsellsalmostanyproductsitcangetitshandson.IsawDongFengtrucks(DebtrepaymenttrucksDongFenggaveYuchai,whichisRMB10,000cheaperthanmarketprice),HongYanandSteyrtrucksonsalesinNo.1’sparkinglot.3