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2025-05-05
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DongFengHubeiLianheCo.LtdINTERVIEWDATE:March10th,2000INTERVIEWERNAME:AnneWangIntervieweeNameMs.DengQunyinPositionSalesMangerCompanyandAddressDongFengHubeiLianheNo.169WuchangMid-NorthRoadFuWuhan430077Telephone/Fax(027)84872985BackgroundKeyProcessesKeyIssuesConclusionsBackground.DongfengHubeiLianheCo.isestablishedin1996.It'sanexclusivedealerofDongfengtrucks.HubeiJidianGroupistheparentcompanyofDongfengHubeiLianhe.UnderHubiJidiantherearealsosubsidiariesexclusivetoFAWandSAIC.Lastyear,DongfengHubeiLianhe'ssalesareseriouslyimpactedbytheinternaltransferredtrucks(trucksfordebts).Onlyaround200trucksaresold.HubeiLianhesoldoutmorethan500truckstheyearbefore.CustomerbreakdownforHubeiLianheisapproximately80-90%privateand10-20%corporate.Therearetotally12salesmeninDongfengHubeiLianheCo.Annualincomeforsalesmenisaround7,000-10,000RMBperperson.HubeiisaverytypicalDongfengmarketsoMs.Dengneverworriesaboutmarketdemand.Accordingtoher,customersusuallyhadmadeupdecisiontobuyDongfengorJiefangbeforetheygotothedealers.TherearethreeDongfengServiceStationsinWuhan.Whencustomerhasanyserviceenquires,Ms.Dengwillintroducethoseservicestationstothecustomers.CurrentlyHubeiLianhedoesnotpossess3in1functionsandisnotinterestedininvestingonthosefunctions.Mainreasonis:LowprofitmarginpertruckRiskoffailureinthenewservicingindustryLowROIin3in1investmentHighinvestment/capitalrequirementKeyProcesses1BecauseHubeiLianhelocatessoclosetoDongfengbase,noturnovertrucksareneeded.Whenanorderisplaced,HubeiLianhejustcallsDongfengandthetruckswillbesenttoWuhanwithinoneday.Inventoryisalsoverylow-closetozeroduetoHubeiLianhe'slocation.AlmostalltrucksstoredinHubeiLianhe'swarehousearebooked.Ms.Dengfoundthatinstalmentisaveryprofitablebusiness.Byprovidinginstalmenttoendusers,adealerinWuhancangetnetprofitof4,000RMBpertruck.Ms.Denghopestosell20truckspermonthinformsofinstalmentthisyear.SalesmenincentivepoliciesareintroducedinHubeiLianhe.Compensationofsalesmenisdirectlylinkedthegrossmarginperdeal.ThoughHubeiLianhedoesnotprovideservice,theyofferedvoluntarilytobringthetruckstoservicestationforendusers.Grossmarginpertruckisaround500-1000RMBin1999.Profitnetofexpenseisalmostzero,orevennegativeinsomecase.KeyIssuesHubeiLianhe'sbusinessisseverelyimpactedbythepricewarlaunchedlastyear.DongfengtrucksgooutfromDongfeng'ssuppliersinaverylowpriceandforceHubeiLianhetoreducetheprice.Thoughin2000,priceoftrucksisundercontrol,Ms.DengstillthinksthepriceDongfengoffersitsdealersaretoohigh.Astrucksarepricedbycost-plusmethod,Ms.DengthinksDongfengshouldfindsomewaytoreducetheirTMCfortrucks.Mostofthecustomersaredevelopedbypersonalrelationshipwithoutfocusandsystematicapproach.Ms.DengcomplainsaboutDongfeng'spolicy.Accordingtoher,thereseemstobesomeinclinationtoDongfeng'sdirectsubsidiaries,e.g.,righttoselecttrucktypes,priorityindeliverytimes,etc.ConclusionsDongfengHubeiLianheisoneofthemajorDongfengdealersinHubeiarea.Thoughnotworryingaboutmarketdemand,DongfengHubeiLianhestillfeelspressurefromsupplyandpricewar.Moreover,lackofprofitlessenedHubeiLianhe'sinterestin3in1investmentforDongfengBrand.2

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