ShengzhengShenlianServiceStationINTERVIEWDATE:12March2000INTERVIEWERNAME:JaneXuIntervieweeNameMr.WangPositionManagerCompanyandAddressShengzhengGuanghuatongTelephone/Fax0-13902975758BackgroundShenglianisaservicestationdirectlyundertheleadershipofFAW.ShenglianmovedtoYantianportlastJulytoservetheJiefangcontainertrucksinthisbusyportMajorbusinessscope:TruckserviceComponentsalesNote:ItiscurrentlyapplyingforthetrucksalesapprovalfromFAWGuangdongTotalheadcountis18;10arereparationworkersSalesrevenueandprofitabilitylastyear:service—RMB570K,mainlyfromwarrantyservice,afterwarrantyserviceonlycount25%ofthetotalservicerevenueComponent—RMB1.02million,profitrate:20%Monthlycostbreakdown:Platleasing:30,550Salary:40,000Decorationdepreciation:10,000OthersAnnualCost=RMB1,320,000Asabusyport,Yantian’struckservicedemandislarge,apartfromShenglian,therearemanysmallreparationstationsaroundtheportareaKeyIssuesCustomerBase:TrucksinYantianportandnearbyareaShengliangetcomponentsfromthreeresource:FAWGuangzhouComponentCenterDachai&XichaiQindaocompany1Notes:AccordingtoMr.Wang,Shengliandidn’tbuythecomponentsfromFAWout-sourcedcomponentsmanufactures,whentheinventoryrunout,ShenglianwilllendcomponentsfromnearbypartshopsandreturnitbacklaterComponentinventorycouldn’tmeetthemarketdemand.TotalinventorylevelisRMB700K,180SKUaltogether:50forDaiChaiengine,50forXiChaiengine,80chassisparts.Forabusyport,boththeSKUtypeandtheinventoryvolumeisfarbelowtheideallevelShenglianisoftenrunshortofQindaotruckchassisparts,sinceQindaoparts’supplyisnotincludedinChangchuncomponentprovidingsystem,ShenglianneedstopayextraenergyoncontactingwithQindaocomponentproviderCommunicationbetweenFAWandlocalcomponentcentershouldbeimprovedFAWChangchunowedShenglianRMB230Kasthewarrantycompensationlastyear,Shenglianstillcouldn’tgetthemoneyback.ThusShenglianisinshortofmoneywhenitturnstoGuangzhouComponentCenterfornewcomponent,GuangzhouCenterwon’tgiveShenglianpartsuntilShenglianpays.ThisdirectlyresultsinthelackofcomponentinventoryinShenglian.Mr.WangsuggestFAWChangchuservicedepartmentshouldimmediatelycommunicatewithlocalcomponentcentesr,allthepaymentpolicyshouldbebuiltonthebasisofServiceStationandFAW’smutualbenefits.ShenglianwishFAWcouldholdmoretrainingson‘newcomponenttypeintroduction’,‘reparationskills’etc.2