FAWShunyiServiceStationINTERVIEWDATE:March2,2000INTERVIEWERNAME:BillHeIntervieweeNameMr.WangDongPositionManagerCompanyandAddressShunyi,BeijingTelephone/Fax010-80496625BackgroundTheservicestationwasfoundedin1993.ItbecameFAWShunyiServiceStationin1997.Thisisa“Four-in-One”dealer.Theyemphasiseonserviceanduseservicetopromotesales.TheShunyiServiceStationhas90employees:35servicetechnicians,35inpartssalesdepartment,10intrucksalesdepartment,and10inadmin.Theservicestation’sregisteredcapitalwasRMB3million.TheShunyiServiceStationkeepspartsinventoryvaluedatRMB3millionallthetime.Theyhave6outletsinShunyitoselltheparts.Therevenueofpartssaleshasgoneupinthepastthreeyears:RMB4.6millionin1997,RMB5.5millionin1998,andRMB6.5millionin1999.TheShunyiServiceStationisataverygoodlocation.Itisonly500metersawayfromtheBeijingCapitalAirport.Thisareahashighdemandintransportation.Alittlevillagenearbyhas260householdbut270JieFangtrucks.TheShunyiServiceStationhassetupapartssalesoutletandanexpressservicestationinthatvillage.Servicerevenueforthepasttwoyearswere:YearFAWpaid(RMB)Customerpaid(RMB)1998780,000910,00019991,140,0001,200,000Theserevenuenumbersincludelabourcostandmaterialcost.Thelabourcostisabout60%ofthetotalcost.Thereareabout5,000JieFangtrucksinShunyiandnearbyarea.Thereareabout320servicestationsinShunyi.Amongthem,only7stationsareGradeAstationsandTheFAWShunyiServiceStationisoneoftheseven.Eachyeartheycansellabout130trucks.Theygottrucksfromdifferentchannels.Theformalchannel,theFAWTradingCompany,givesthemthehighestprice.Theleastexpensivetruckwassocalled“debt”truck.Sincethesellergotitverycheap,theysellitcheap,too.Onaverage,“debt”truckisaboutRMB3000-4000lessexpensivethanFAW’struck.IntheRMB3millionpartsinventorytheykeep,only20%wasfromtheFAWTianjingPartsCenter.PricefromTianjingPartsCenteristoohigh.Theybuy1fromthemanufacturersdirectlyanditislessexpensiveinthisway.Moreover,theFAWTianjingPartsCenterdoesnothavegoodcoverageofparts.KeyIssuesTheShunyiServiceStationgottheirtrucksfromdifferentchannels.From2000,FAWTradingCompanyBeijingSubsidiarywillaskittobuytrucksfromthemonly.TheywantmoresupportfromFAW.Forexample,theywantFAWtoputinventoryintheirwarehouse.ConclusionTheShunyiServiceStationisa“Four-in-One”dealernow.Itisstrategicallylocatedinatruckhighdemandarea.Therefore,thedemandoftruckservicewillkeepstrong.TheyneedmoreguidanceandsupportfromFAWretrucksales,partssalesandservice.Theyshouldn’tgettrucksandpartsfromdifferentchannels.2