ShengzhengDashengJidianCo.LtdINTERVIEWDATE:12,March2000INTERVIEWERNAME:JaneXuIntervieweeNameMr.ZhengMangPositionGeneralMangerCompanyandAddressXichengIndustryZon,BaoanDistrict,ShengzhengTelephone/Fax0-1359614841ShortSummaryBackgroundSalesin1999:RMB300millionExceptfromJiefangtruck,Dashengsellother10brandautoincludingDongfengDashengiscurrentlya“YouxingMarket”,ithasaverage50trucksasturn-overtruckTotalheadcount:53,10workfortruck(bothDongfengandJiefang)SalesvolumeofJiefangtruckin1999is283(mostareJiefangChangchuntruck)KeyIssuesProfitabilitypertruckAroundRMB2,000in1999RebatingsystemisnotclearenoughCustomerbaseMostcustomerareindividualtransportationbusinessownerPriorityofpurchasingdecision:1)Service,componentsupply2)PriceEnd-userdohavebrandloyalty;e.g.ADongfengend-userwillbasicallycomebacktoDongfengifheneedtopurchaseanewtrucksinceheisfamiliarwiththecomponentandthewholeserviceflowCompetitionCompetitionexistineveryproductsegement:1.Lighttruck:Jiefangfacespatentlimitationin2tontruck,However,Dongfeng“ChenglongWangzi”couldstillgetpatentasa’2Ton’truckwithactualcapacityof5tonInmajorportsofShengzheng,2TonTruckwillgraduallyreplacedbythe5tonorhighercapacitytruck2.Mediumtruck:SAW’s5ton“ChenglongWang”hasastrongmarkettrendinthecontainertrucksegementation(priceandqualityarebothcompetitive)13.Heaveytruck:Truckwith270to290horsepowerenginewillcountagreatshareinShengzheng’struckmarketastofitfortheincreasingcontainertransportation;FAWdonothavethetruckwith270to290horsepowerengineSAWChenglonghavethe240and270horsepowerengine,buttheproductisnotmature(qualityandtechniquecompatibilityoftheproductsarenotgoodduetotheshortdevelopmentcircle)DongfengComminsenginedidn’tprovideend-usersagoodcomponentserviceinthepastyears--thisisthemajorreasonwhyJiefangcouldreacharelativelyhighsalesvolumetheseyearsKeyProblemsofFAWResource(truck)arenotwellplanned/distributed:Dasheng’sJiefangtruckinventoryrunoutfor2monthslastyearFAWchangethetruckstyletooquick,thisbroughtDashenggreattroubleincontroltheorder.FAWshouldhave1to2classictrucktypewhichcouldattractastablegroupofcustomers.Forexample,acustomercometoDashengfora7.8m5tontruck,whentruckwastransportedtoDasheng’swarehouseonemonthlater,8.6m5tontruckhasbeendeveloped,end-userwouldliketochangehisoriginalorder.Attitudetowards“3in1”Dashengwillnotbuildatruckservicestationintheshort-termbecauseofHighinitialinvestmentUnpredictablefuturebenefit:Mr.Zhengdon’tthinkthebenefit(short-term)raisedfromservicestationcouldcoveritsestablishcost.Note:Dashenghasasmallreparationteamwhichcouldprovidesomebasicreparationservice,amongthecustomerwhogetbackforreparation,10%arethosewhopurchasethetruckinDasheng2