ChongqingNorthAutoSalesCompanyINTERVIEWDATE:5May2025INTERVIEWERNAME:PaulGaoIntervieweeNameMr.TangLiangzhongPositionGeneralManagerCompanyandAddress190Chaotianba,JiuLongPoDistrictChongqingTelephone/Fax0-13808301212BackgroundChongqingBeifangstartedin1988asapartsdealer,andstartedsellingFAWtrucksin1993,initiallyFAWlighttrucks,andhassinceexpandedtomediumtruckandHongQicarsItisacollectivecompanyownedbyitsemployees.ItonlysellsJieFangandHongQitruckatthemoment.ItisthebestJieFangdealerinChongqingandtheonlyHongQidealerinChongqing.Itdoesnothave“3in1”capabilitiesyet,butisintheprocessofinvestingina“3in1”dealershipinadifferentlocationinChongqingarea.SalesTotalsalesin1999was600units,including:252HongQi47AuditherestareJieFanglightandmediumtrucksBeifangalsosellstruckcomponents.In1999,itssalesreachedRMB700-800K.70%ofitspartsarefromFAW’sChengdupartscenterandtherestcamefromFAW’spartssuppliersdirectlyChannels:85-90%ofitssalesaretodirectendusers.BeifanghassixsalespeopletargettransportationcompaniesinChongqing,becauseeventhoughmostenduserstodayareindividualcustomer,theynormallyassociatethemselveswithatransportationcompanyinordertogainscaleandconfidenceofcustomersItalsosellstosecondtierdealerswhoaremostlylocalmechanicalandelectricalcompaniesinlocalcounties,butthispartofthesalesonlyaccountsforlessthan15%ofthesalesProfitability:Beifangdoesnotmakeanymoneysellingmediumtrucksbeforeyear-endrebatefromFAW.However,duetoitsrelativelysmallsalesvolume,itisnotabletoqualifyforthefull1%salerebatefromFAW1EventhesalesrebatethatisduefromFAWnormallytakesalongtimetobepaid“3in1”capabilities:Beifangisinvestingina“3in1”dealershipwhichwillsellbothJieFangtrucksandHongQiproductsInitially,thedealershipwillhavealargeshowroomandparkingspace,aswellasapartscenterincooperationwithanotherindependentpartsdealer.Mr.TangplanstobuilduptheservicecapabilitiesgraduallybyinitiallyfocusingonsimplerepairserviceandbuildupthecapabilitiesslowlyasJieFangtruckparcgrowsProblemswithFAW:FAWdidnotpayenoughattentiontoChongqingandlostthemarkettoDongFeng,whopaysmoreattentiontoChongqing.DongFengholdsregularlargecustomermeetingsinChongqingtodevelopclosetieswithitscustomersintheareaFAWhastoomanyrefittingfactorieswhocompetedirectlywithChangchunFAW.FAWQingdaoandFAWLiuzhoubuytruckchassisfromChangchun,buttheyalsobuysomecomponentslocallywhicharemuchcheaperthanFAW’schangchunsuppliers.Asaresult,theyareabletoselltheirproductsatlowerpricethanFAWwithmuchmorefeatures,accordingtocustomers’requests.Thesere-fittingfactoriesdonotcompeteheadtoheadwithDongFeng,buttheybenchmarktheirproductsdirectlyagainstFAW’sownproductsinthemarketplaceFAWreactstooslowlytocustomerrequirements.FAW-QingdaoandLiuzhoufactoriescandelivercustomisedtruckswithin10daysofreceivingcustomerorder,whichFAW-Changchuntakes30-45days.Chongqingisaverybigmarketfordumpersbecauseofthemanyconstructionprojects.However,FAWhasbeenslowtomeetthisbigrequirementsandintroduceditsdumpersthatmeetlocalrequirementfortechnicalfeatures(highclearance)andprice(FAW’srefittedtrucksfromSipingistooexpensivecomparedtoQingdaoandLiuzhoutrucks)FAW’sR&Ddepartment’sbureaucraticmentalityhaslostmanybusinessopportunitiesforFAW.TheR&Ddepartmentdevelopstrucksbasedontechnicalconsiderationswithoutanystudyofcustomerrequirements,anditdoesnotallowitsChangchunfactorytomakeanymodificationswithoutitsapproval(whichtakesalongtime,sometimesaslongas3months)FAWhasintroducedmanynewproductsinrecentyears,however,R&Ddepartmentisveryslowtopreparelistofcommonparts,technicalmanualaswellasusermanualsfornewproducts.Thishasmadeitdifficultfordealerstoexplainthenewfeaturesofthetruck,andforservicestationstoproviderepairservicetothenewtrucks,andstorepartsforthenewtrucks.2