FAWBeijingSalesCenterINTERVIEWDATE:March1,2000INTERVIEWERNAME:BillHeIntervieweeNameMs.LiXinchunPositionManagerCompanyandAddressFengtai,BeijingTelephone/Fax010-63581193BackgroundFAWBeijingSalesCenterisasubsidiaryofJidongMechanicsandElectricCompany.TheparentcompanyisabigdistributorofFAWwithsalesofmorethan4,000JieFangtrucksin1999.FAW’ssalesinBeijingisabout500trucksin1999.Ms.LiisthemanageroftheFAWBeijingSalesCenter.Theparentcompanyhas10salescompaniesin10citiesinHebei,Beijing,andTianjin.TheFAWBeijingSalesCenterhas13employees.9sales,2accounting,and2admin.Thesalesmen’scompensationcontainsbasesalaryand“redbag”(secretbonus).ThepricetheygetfromFAWisAnetworkpriceminus3%.ThepricetheysellisRMB500to1,000morethanthepricetheyget.Forbigorders,thesalespriceisalmostthesameasthepricetheyget.Theyear-endrebatewouldbetheonlyprofittheycangetinthiscase.FAWTradingCompanyputsitsinventoryintheirwarehouse.ThisisabigsupportadealercangetfromFAW.Theyhavebothsecond-tierdealersandendusersintheirportfolio.Second-tierdealerscontainasmallportion,mainlytheFAW’sservicestations.Amongtheendusers,80%areindividualsand20%areenterprises.Thesalesbreakdownbysegmentis20%lighttruck,60%mediumweighttruck,and20%heavyweighttruck.ThebestsellermodelisCA1110PK2L5H,a5ton,7.2metertruck.ThemajorityofthetruckssoldinBeijingareusedinbigprojects.IfBeijingcansucceedinitsbidforhostingtheOlympicGamein2008,manybigprojectswillbeundertakeninthenextseveralyearsandthedemandfortruckswillremainhighuntil2008.Currently,theyonlyselltrucks.Noservice.Noparts.AndtheyonlysellJieFangtrucks,nootherbrands.Theyinvestedsignificantamount(RMB300,000)inadvertisementin1999.KeyIssuesTheenvironmentstandardinBeijingisstricterthanotherplaces.ThecurrentmodelsofJieFangtrucksarenotqualifiedtobesoldinBeijing.Fortunately,environmentfriendlytruckswillbeavailableinearlyMarch.1Theyselltruckstobigend-usersinShandongandShanxi.ThisisathreattoagooddistributionchannelTheydon’twanttobea“Four-in-One”dealershipbecauseofthesignificantupfrontinvestment.Theirparentcompanyhas“Four-in-One”capabilityalready.Whethertobuildthe“Four-in-One”capabilityinBeijingisadecisionthemanagementoftheparentcompanyhastomake.TherearethreeJieFangtruckdealersinBeijing.Mostlikely,thisonewillbethesmallestin2000.DowereallyneedthreedealersinacitylikeBeijing?ConclusionThedealersinBeijingaremorecompetentthanmostoftheotherdealers.Currently,therearethreequalifieddealersinBeijing.IfwewanttoreducethenumberofdealersinBeijing,wewillretaintheoneswanttobea“Four-in-One”dealer.2