InterviewNotesforFAWTradingCompanyNorthChinaTruckPartsCenterInterviewDate:6/3,2000Interviewer:JianPANInterviewee:Mr.WangYimingCompany:FAWTradingCompanyNorthChinaTruckPartsCenterPosition:ManagerPhone:022-24564635Background:TheFAWTradingCompanyNorthChinaTruckPartsCenterisinchargeofpartssupplytoHeBei,ShanXi,HeNan,TianJingandBeiJing.BeforeMay,1999,ShanDongwasalsocoveredbythispartscenterwhenFAWTradingCompanysetupapartscenterinZiBo.Therewere6employeesbefore3rd,March2000butnow3onesafterreorganization.OrgStructure:Theteamnowhasonemanager,oneaccountantandoneplanner.Theyareresponsibleforthesalespart,warehouseadministrationoutsourcetoalocalcompany.Customer:ThepartscenterwassetuptosellpartstoFAWservicestationsandCertifiedPartsShopinthegeographicarea.Datafor1999CustomerNumberSalesPercentagePriceServiceStation7587%InPrice+2%CertifiedPartsShop1110%InPrice+5%LargeAccountClient53%InPrice+5%*Thereare37CertifiedPartsShopsinthearea,butonly11outofthemregularlybuypartsfromthecenternow.Reason:PricetoCertifiedPartsShopisbuy-inpricefromFAWTradingCompanyplus5%markup,nowsomeCertifiedPartsShopsbuypartsdirectlyfromservicestationsatthepriceofbuy-inpriceplus4%markup.*Onlymemberclientsof“FAWLargeAccountantsClub”canbuypartsdirectlyfromPartsCenter.Therequirementof“FAWLargeAccountantClub”fortheclientistohaveatleast100FAWtrucksatwork.*Thepartscentersarerunascostcenter,FAWTradingCompanypaysallthecostexceptforthetransportationfee.Themoneyearnedbymarkupisusedtopaythetransportationfeewhichisnormally3%ofthepartsprice.Products:thestructureofproductssoldbythepartscenterisasfollowing:SalesPercentagePartsofChassisandSwitchBox(Medium&Heavytrucks)45%PartsofGasolineMotorEngine(Medium&Heavytrucks)15%PartsofLighttrucks20%Others20%FAWservicestationsaveragebuy20%ofthetotalpartstheysellfromFAWPartsCenter.ActuallyalmostallthepartsthatservicestationsbuyarepaidbyFAWTradingCompanyfortheservicefeetheyshouldpayincash.TheServiceStationbuyingprocessisasfollowing:ThepartscentergetallthepartsfromChangChundistributioncenter,notdirectlyfromFAWpartsvendors.SalesRevenueinthepast3years:YearRevenue(RMBmillion)199758.9199849.3199931.9Reasonsofdownwardsales:1.Severalyearsagothemainstreamtruckssoldweregasolineenginetrucks,soFAWTradingCompanyandthepartscenterfocusedonthepartsofgasolineenginetrucks.Inthepastyearsthemainstreamtrucksinthemarketchangedtodieselenginetrucks,butFAWTradingCompanydidn’trespondedtothechange.NowdieselenginetruckpartsaremainlysolddirectbyFAWpartsvendors,notthroughFAWtradingcompany.2.PriceisnotcompetitivewhencomparedwiththatofOEMpartsorthatofunoriginalmanufacturers.3.ShanDongwasseparatedout.Issue:FAWTradingCompanyseemstohavenoclearandconsistentstrategyforthepartssalesbusiness.NowpartssalesbusinessissustainedmainlybycompulsorypartssalestoFAWservicestations.Thesaleschanneliscomplicatedandoutofcontrol,howtohandlerelationshipbetweenFAWTradingCompanyandOEMsiscriticaltothepartssalesbusiness.UsethepayabletoorderpartsfromFAWTradingCompanyServiceStationSubmitservicefeeapplicationmonthlyCheckandapproveSubmittoAccountingDepartmentServicedepartmentofFAWTradingCompanyTransfertheaccountpayabletothepartscenterAccountingDepartmentPartsCenterGetpartsfrompartscenterinsteadofpaidincashServiceStation
