FAWSouthwestSalesCompanyINTERVIEWDATE:5May2025INTERVIEWERNAME:PaulGaoIntervieweeNameMr.HanJinhePositionGeneralManagerCompanyandAddressFAWSouthwestSalesCompanyTelephone/Fax0-13908012558BackgroundThereareabout11peopleintheFAWSouthwestSalesCompany.Threeinsales(includingMr.Han),2inA/Rcollection,5inspareparts,and1forservice.TheyhaveanannualoperatingbudgetofRMB170K.Mr.Hancomplainedthatlastyear,theyonlygotRMB40Kinbonus(Mr.Hangot10K),whilethemanagerforFAW-VWsalesinChengdureceivedRMB60Khimself,eventhoughhedidnotevenmeethissalestargetIn1999,FAWsoldabout1,900trucksandchassisinSichaunprovince,excludingChongqing.TherearethreedistributorsinChengdu:ChengduNo.1RepairShop,whichisa“3in1”Dealer.Lastyear,itsold1,000FAWtrucks,including700retailsalestoendusers,and300salestootherservicestationsinChengduShuGuang,whichbelongstoChengdu“Wuzi”,soldabout300trucks,mostlytolargeinstitutionalcustomersChengduJiDian,whichbelongstoChengDuMechanicalandElectricalCompany,soldabout300truck.FAWSouthwestSalesCompanyalsosolddirectlytosomelargeendcustomersThebestsellingproductinSichuanismediumdutytrucks.Lighttrucksusedtobepopular,butsaleshavedeclinedsignificantlydueto:localgovernmentregulatoryrestrictionsonlighttruck’susageinurbancities;higherpricethanagriculturaltrucksinsuburbanareas.Heavydutytrucksareonlypurchasedbylargeinstitutionalcustomers,inaddition,becausehighwaysystemisnotwelldevelopedinSichuan,itisnotconvenienttouseheavydutytrucksinthenarrowmountainroads.SichuanistraditionallyaDongFengmarket,eventoday,DongFengoutsellsFAWJieFangtrucks2to1(DongFengsold3,000-4,000trucksin1999,includingchassis),Mr.HanattributedDongFeng’ssuccesstothefollowingfactors:Lowprice:DongFengtrucksarecheaperthanJieFangtrucks.Onaverage,DongFengtruckisatleastRMB2,000-3,000cheaperthancomparableJieFangtrucks,someareatleastRMB5,000cheaper.In1998,aJieFangdealercanmakeaboutRMB2,000profitpertruck.Butsincethen,FAWhasraisedtheJieFangtruckpricefivetimes,itisdifficultfor1dealerstomakeanyprofitontrucksales,theysometimesselltrucksatbelowthepricetheygotfromFAW,hopingtogetthe1%annualsalesrebate.DongFenghasalotofbodybuildersinSichuanwhobuysDongFengtruckchassisandmakebusesandothervehiclesDongFengshippedalotoftruckstoitssupplierstooff-setitsdebtstothem.ThesetrucksaresoldbythesuppliersatmuchlowerpricethanDongFeng’sdealerpriceChinaHeavyDutytruckisnotaseriouscompetitorforFAWinSichuan.Ithasgoodproduct,andpricedatreasonableprice.Butithasbadaftermarketserviceandveryexpensivespareparts(thisisthecaseforbothSteyrandHongYantrucks)Mr.HanisbehindthedevelopmentofChengduNo.1RepairShopasamodel“3in1”dealership,becausehefirmlybelievesthatcustomerstodayrequires“3in1”service,andservicestationsarebestpositionedtomeettheirrequirements:Over80%oftruckcustomerstodayareindividualcustomerswhorequiretimely,convenientandreliableserviceAuthorisedservicestationstypicallyaremoreloyaltoOEMsthandistributors.ManyservicestationsonlyserveinbrandoroneOEM,unlikedistributors/dealerswhooftenservemultipleOEMsServicestationshavefrequentinterfaceandhavedevelopedrelationshipswithendusers.CustomersaremorelikelytocomebackforserviceandpurchasetheirnextvehiclesfromtheservicestationsiftheyaresatisfiedandhappywiththeservicetheyreceivedDistributors/dealersaretypicallylocatedinurbanareasthatarenotconvenientlyaccessiblebytrucks,plustruckssalesrequirelargeshows...