FAW-yinchuandealer_0314.docVIP免费

YinchuanFAWDealerINTERVIEWDATE:5May2025INTERVIEWERNAME:PaulGaoIntervieweeNameMr.WangShenjiePositionManagerCompanyandAddressZhongyangAvenue,YinchuanDevelopmentZoneTelephone/Fax0951-5030645BackgroundFAWNingxiaSalesCompanyisajointventurebetweenNingxiaMechanicalandElectricalCompanyandFAWinwhichFAWowns30%ofsharesbutdoesnotparticipateincompanymanagementItsparentcompanyhasfourothersimilarJVswithSAICtosellSantana,withNanjingAutotosellYuejintruck,withSAWtosellDongFengtruck,withTAICtosellCharade.ItalsohasadepartmentthatsellsSteyrtrucksTheJVisanindependentlegalentityfromitsparentwithitsownbankaccountandmanagement(onlythechiefaccountantisappointedbyitsparentcompany)ATthemoment,theJVsellsHongQi,JettaaswellasJieFanglighttoheavytrucks.Ithasintotal17employees,including11salespeople,threeofwhomarededicatedtoJieFangtrucksalesSalesTotalsalesbyitsparentcompanywasRMB120millionin1999,outofwhichRMB60millionwassalesbytheJVwithFAW.ThebreakdownofFAWproductsalesin1999was:JieFangtrucks:240HongQi:86Jetta:43FAWpick-up:40Lighttruckandbus:20+Profitability:TheJVmadeatotalnetprofitofRMB800K,afterdeductionofoperatingexpenseofRMB920K,whichwereprimarilyemployeesalary,officerental,transportationcost,etc.TheJVhasaregisteredcapitalofRMB3million.However,workingcapitalrequiredtoconductJieFangtruckbusinessisminimalbecauseitissellingonconsignment(unlessheorderstruckfromFAWand1doesnotsellthetrucksforthreemonths,whenhewouldhavetopayFAWregardlessofwhetherheisabletosellthetrucks.Eventhen,FAWnormallygavehima1-2%pricediscount)SalespeoplearepaidRMB300permonthasbasesalary,andbasedonthegrossprofittheyareabletomakeonthetrucktheysell,theygetasalesbonusofRMB50,100and200respectively(forgrossprofitofRMB500,1000,2000)Onaverage,thedealermakesaboutRMB500-1000pertruck.MrWangattributedtoitsabilitytomaintaindecentprofitability(comparedtootherregions)tothefactthatthereareonlytwodealersinNingxiawithlimitedcompetition,andhehastheadvantageofhavingFAW’svehicleinventoryinhiswarehouseChannels:Allofitssalesareretailsalestoend-usersdirectly,80%ofwhomarelocatedinYinchuananditssurroundingregions.Individualcustomerstodayaccountfor60%ofnewtrucksales,whileinstitutionsaccountfortheother40%ThecompanyspentaboutRMB90Kinlocalnewspaperadvertising,thiscoversJetta,HongQiaswellasJieFangtrucksTheJVisthefirstautodealerintheNorthwesttoofferbankloanstocustomerstopurchasetrucks.Ithasestablishedrelationshipswithallfourmajorstate-ownedbanks.Lastyear,itsold46trucksthroughbankloanstocustomers(whichiscloseto20%ofhistotaltrucksales).Over80%customersutilisingbankloansfortruckpurchaseareindividualcustomersTypically,therearethreedifferenttermsforbankloans,whosetermsrangefrom1to5years:Ifthetrucksareusedascollateral,40%oftruckpaymentisrequiredIffixeddepositorothermarketablesecuritiesareusedascollaterals,20%oftruckpaymentisrequiredIfofficebuildingsareusedascollaterals,30%oftruckpaymentisrequiredCompetition:AsthereareonlytwoFAWtruckdealersinYinchuan,competitionbetweenthetwoisnotveryintense.BothcanstillmaintaindecentprofitabilityHowever,therearelargeamountoftruckscomingintoNingxiafromotherprovinces,e.g.,InnerMongoliaandShaanxi,whichhashurtlocaldealersalesDongFengalsohastwodealersinNingxia,however,dealersonlyaccountforlessthan50%ofDongFeng’ssalesintheregionsbecauselargenumberofDongFengtrucksaresoldtoNingxiabyDongFeng...