Baotou_Welfare_0228.docVIP免费

NeiMengWelfareCorporationBaotouSubsidiaryINTERVIEWDATE:Feb28th,2000INTERVIEWERNAME:BillHeIntervieweeNameMr.LiHuju,Mr.QiLihePositionManagersCompanyandAddressNeiMengWelfareEnterpriseBaotouSubsidiaryTelephone/Fax0472-4140534BackgroundNeiMengWelfareCorporationBaotouSubsidiarybecameFAW’sdealerin1993.Theyusedtosellabout500JieFangtrucksannually.However,theyonlysold77JieFangtrucksin1999.TheyonlysalesJieFangtrucks.Mr.LiandMr.QiarethemanagersresponsibleforthesalesofJieFangtrucksinthecompany.Theyhavefoursalesmenworkingforthem.Theyplantoadd5moresalesmeninMarch.Theyplantofocusonbigcustomersthisyear.TherearefivetosixsuchcustomersinBaotou.Forexample,BaotouSteelPlantisthebiggestcustomerinBaotou.Halfofits6,800truckswillhavetobereplacedwithinthreeyears.Moreover,quiteafewbigprojectswillbekickedoffinthenearfuturesincetheChinesecentralgovernmentemphasisesthedevelopmentofthewestregionthisyear.TheyplantoinvestRMB1milliontobea“Four-in-One”dealershipthisyear.Inordertobringinservicestationexpertise,theyplantofindalocalpartner.Theirhigh-levelbusinessprocessis:findcustomersfirst,thenordertrucksfromFAWTradingCompany’sNeiMengSubsidiary.IttakesoneweekfromtheirordertoFAW’sdeliverytoBaotou.AftertheygetmoneyfromthecustomerstheypayFAWimmediately.ThepricetheygetfromFAWisANetworkPriceminus3%.ThepricetheyoffertocustomerisANetworkPriceplusfreight.Thefinalpricesmayvarydependingonthesizeofthecustomerorders.ThedifferencebetweenthefinalpriceandthepricetheygetfromFAWistheirgrossprofit.Theydon’thavesub-dealers.Alloftheircustomersareendusers.Theportfoliooftheircustomersis60%individual,40%enterprises.Thepercentageoftheindividualisexpectedtogrowinthefuture.Theyhavesalesforce,booth,andsamplesintheAutomotiveCommerceCentreinBaotou.Theyplantosell150JieFangtucksthisyear.1KeyIssuesNeiMengWelfareCorporationBaotouSubsidiaryusedtobetheonlydealerofFAWinBaotouandFAWputitsinventoryintheirwarehouse.However,SilverSword,arelativelynewdealerbecamethebiggestFAWinBaotouin1999andconvincedFAWtoputitsinventoryintheirwarehouse.ThisisanimportantreasonofthesignificantdropinJieFangtrucksalesofNeiMengWelfareCorporationBaotouSubsidiary.TheywishFAWcancontinuetoputitsinventoryintheirwarehouseThiscompanywasformedtotakecarethewelfareofthedisablesinNeiMengGu.Therefore,thecompanyisinavarietyofbusinesses.Theydon’treallyhaveafocusandtheresourcetheycommittedtoJieFangtrucksislimited.Theydon’thavetheabilitytobuyinventoryandsellitlater.TheyhavetofindthecustomersfirstandthenordertrucksfromFAW.Manyoftheircustomersareverytightinbudget.Forexample,theirbiggestcustomer,BaotouSteelPlant,cannotpaythemcashtopurchasethetrucks.Instead,theywanttoexchangesteelfortrucks.Bankfinanceprogramfortruckpurchaseisavailable.However,theapplicationprocesstakestoolong.NeiMengWelfareCorporationBaotouSubsidiaryhastopayFAWbeforeitscustomerscangettheloanfromthebank.Thecompanyitselfdoesnothaveenoughworkingcapitaltosustaintheoperation.Somebigcustomerstheydealwithdonothavesoundfinancestatus.ThosecustomersstillowethecompanyRMB7.9millioninoutstandingpayment.Theyselltruckstocustomersinotherprovinces.ThisisaseriousproblemforallFAW’sdealersnowadaysanditdisruptthemarketConclusionThisisarelativelyweakdealerduetotheirlimitedresourceandlackoffocus.FAW’sdecisiontomoveinventorytoSilverSward,amorecapabledealer,isagoodbusinessdecision.Weneedtomakeadecisionwhethertokeepitasasecond-tierdealerornotattheendofthisproject.2