BeijingChangchunWanrongAutomotiveSalesCo.,Ltd.INTERVIEWDATE:March1,2000INTERVIEWERNAME:BillHeIntervieweeNameMr.SongTaoPositionGeneralManagerCompanyandAddressFengtai,BeijingTelephone/Fax010-63895753BackgroundBeijingChangchunWanrongAutomotiveSalesCo.,Ltd.(Wanrong)isthesalesarmofChangchunWanrongAutomotiveModificationFactory(WanrongFactory),eventhoughtheyaretwoindependentcompaniesnow.Wanronghaseightemployees,6sales,1accounting,and1admin.Thecompensationofsalesmenincludesbasesalaryandbonus,similartoothercompanies.Theysold310JieFangtrucksin1999.Thebreakdownis40lighttrucks,40mediumweighttrucks,and240heavyweighttrucks.ThebestsellermodelisCA3160,aneightton,4.6meterlongtruck.WanrongFactorybuysthismodelfromFAW,modifyitandsellittoWanrongataverylowprice.Wanrong’soperationcostin1999wasRMB180,000.Itwillbeincreasedsignificantlyin2000toapproximatelyRMB800,000.AccordingtoWanrong,truckmarketshareinBeijingisSAW40%,FAW25%,otherbrands35%.BeijingusedtobeSAW’straditionalmarket.FAW’sdealerscametoBeijingtwoorthreeyearsago.WanronggetstrucksfromeitherFAWdirectlyorthroughWanrongFactory.Wanrong’sbestsellertruckinBeijingisprovidedbyWanrongFactory.CA3160isaverypopularproductinBeijingandWanrongcangetitataverycompetitivepricethroughtheirownfactory.FAW’sproductreputationisbetterthanSAW.Forcomparabletrucks,FAW’spriceisaboutRMB10,000to20,000higher.Wanrongsellstrucksonly.Noservice,nopartsbusiness.Wanrongofferssomevalue-addedservicessimilartoothercompanies.AccordingtoWanrong,foreigntruckswillnotbeaseriousthreatafterChinaentersWTObecausepricinganddistributionchannel.Wanronginvestsheavilyinnewspaperadvertisement.Wanrongtargetstosell1,000JieFangtrucksin2000.KeyIssues1Thecurrentdistributionchannelisoutoforder.AnyonecangetJieFangtrucksfromanywhereatanyprice.UnlessFAWcanchangethecurrentstatusofthedistributionchannel,Wanrongdon’twanttobe“Four-in-One”dealer.Tohave“Four-in-One”capability,adealerwillinvestsignificantamountupfront.Thecurrentdistributionchannelwillhurt“Four-in-One”dealersandcanevenputtheminbankruptcy.“Four-in-One”canonlybedoneafteragooddistributionchannelisestablished.ConclusionWanronghasahugeadvantagetobeatruckdealer.ItcangetverypopulartrucksfromWanrongFactoryatverylowprice.Theirsellingpricesareusuallyhighsincethesetrucksarebestsellersinthemarket.Therefore,theycangainhandsomeprofit.WanrongcouldbeagooddealerinBeijing.However,weneedtomakesuretheyarereallyindependentfromtheWanrongFactoryinChangchun.Wedon’twanttheWanrongFactoryinChangchunsellstrucksinBeijing.2