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2025-05-05
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ShenyangAutomotiveReparationCenterInterviewDate:Feb29th,2000InterviewerName:JianPANIntervieweeNameMr.SuKe,Mr.LiZhanhuaPositionOfficeManager,ManageroftruckservicestationCompanyandAddressShenyangAutomotiveReparationCentreTelephone/Fax024-23911579BackgroundThereare3servicestationsinShenyang,ShenyangAutomotiveReparationCentreisthebiggestone.TheownershipofthecompanyisSOEanditbelongstoShenyangFirstTransportationGroup.1982sawthecooperationofthecompanywithFAWandthecurrentcompanyentitywasfoundedin1992.NowthecompanyiscertifiedservicestationforFAW’sfulllineproductsandhas3businessesdivisions:1.Truckservicestation2.Carservicestation(Audi,Hongqi)3.PartssalesshopThereare210employeesinthecompany,with48intruckservicestation:30technical,6partssales,12administrationIn1999,theyservemorethan1200JieFangtrucksunderFAWpaidservice.85%ofthetruckownersareindividuals.15%ofthetrucksownedbyvariousenterprises.Theyhavethreerevenuestreams:FAWpaidservice(includinglabourandcomponentcost),customerpaidservice(includinglabourandcomponentcost),andpartssales.In1999,revenuefromFAWpaidandcustomerpaidservicewasRMB1.9million,andthatfrompartssaleswasRMB1.3millionThemoneyFAWshouldpaidthemforguaranteeservicewaspaidintruckpartsandtheinterimbetweentheirapplicationfortheservicefeeandreceiptofthepartswasmorethanonemonth.Nowthepartssalesshopofthecompanyisresponsibleforpartsofgasolinetrucksandtruckservicestationresponsiblefordieseltruckparts.Theshopisalsoinchargeofvehiclesales,in1999itsold70-80trucks.Thecompanyplanstodividethepartsretailsalesbusinessoftheshopinto2servicestationinthisyearandchangethebusinessoftheshoptopartswholesale.KeyIssuesIntruckservice,revenuedroppedoverthelastcoupleofyears.Thecompetitiononpricefromunauthorisedsmallservicestationisseverely.ThesmallservicestationsofferlowerpricethanFAWBaotouservicestationbecause:TheyhavelessoverheadcostthanFAWBaotouServiceStationTheyusesubstitutesratherthanoriginalpartsfromFAW.EveniftheyuseoriginalpartsfromFAW,theycangetthemfromchannelslessexpensivethanthechannelofFAWBaotouServiceStation.FAWBaotou1ServiceStationgetsmostofitspartsfromFAWTradingCompanyandpaysahigherprice.Evenforpartsfromthesamechannel,smallstationcansellthem10%lowerthancertifiedstationbecausethecertifiedhastopayadditionaltaxforinvoice.Profitmarginoftruckserviceandpartssalesdroppedoverthelastseveralyears,too.Profitmarginofpartssalesusedtobeashighas30%in1995,25%in1997.Itdroppedtoabout19-20%in1999.ConclusionThemulti-channeloftruckpartsisaproblemtothechannelmanagement,maybeFAWshouldmakeachoicebetweensellpartsviatradingcompanyordirectlyviapartsvendor.2

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