FAWWuhanLianheCo.LtdINTERVIEWDATE:March8th,2000INTERVIEWERNAME:AnneWangIntervieweeNameMs.MaoHong-xunPositionViceGeneralMangerCompanyandAddressBuilding1,XinheCun,Hanxi,Wuhan430000Telephone/Fax(027)83885512BackgroundKeyProcessesKeyIssuesConclusionsBackground.WuhanLianheisestablishedin1987,currentlyhas3FTEsworkingforJiefangtrucks.Totalinvestmentin3MillionRMBSalesofFAWaredecliningrecentlyfortheyretreattheirsalesnetworktoHubeiArea.Byyear(volume)MediumLight97392187983032919912223400(target)total40081%ofsalesaredirectlytoend-users.80%ofendusersareindividual.Grossmarginpertruckisaround1000/unit.Netprofitisaround170/unit.FutureplansWuhanLianheisgoingtoputtheirimageon-lineformorecustomerstoreviewandprepareforfuturee-businessopportunity.WuhanLianheisgoingtobecomea4in1dealerinthisyearandappliedalandastheplant/depotfortrucks.Totalinvestmentisaround200,000RMBastheycangetthelandandequipmentfree.KeyprocessesWuhanLianheput2paperadvertisementsandoneTVadvertisementeveryweek.1Thereare182ndlayeroutletsforWuhanLianhe.TheydonothavetightrelationshipswithWuhan.WuhanLianheprovidesthemwithainstructivepricelisteverymonth.3KPIisusedtoevaluatesalesmen:salesvolume,totalsalesincomeandnetprofit.WuhanLianhesetsupindexesforeverysalesmanandlinkittightlywithSalesmen'scompensation.Inventoryofturnovertrucksisaround50now.KeyIssuesUser'sperspectiveofFAWHigherqualityHigherpriceespeciallycomparedwithalocaltruckBranchcalledChuFeng.PriceofChuFengis60,000-70,000whileFAWis90,000.AsWuhanLianhe'smarketsurroundingisnotverygood,notmanytrucksaresoldalthoughlotsofeffortareput.WuhanLianhefeelsunfairthattheirworksarenotrecognizedbyFAWatall.CurrentlyWuhanLianheowesmorethan11MillionRMBtoFAW.Mostofthedebtareformed4-5yearsbeforeandcannotclearlytellthereason.Wuhanisgraduallycollectingandreturningthisdebt.E.g.,theygetbacktheir4MillionRMBworthABSpartsfromoneformerpartnerandwishtoreturnthistoFAW.Currentlytheyreturnalmost2MillionRMBperyeartoFAW.ConclusionsAstheBiggestFAWDealerinWuhan,WuhanLianheisestablishingFAWimagebitsbybitsinHubeiprovince.Thoughthemarketishighlycompetitive,WuhanLianheisstillconfidentinthefutureofFAWtrucksandwillingtoinvestonit.It'saveryideal1stlayerdealer.2