FAWGuangzhouComponentCenterINTERVIEWDATE:5May2025INTERVIEWERNAME:JaneXuIntervieweeNameMr.YinJiasongPositionManagerCompanyandAddressFAWGuangzhouComponentCenterTelephone/Fax020-86092815BackgroundChannel(1)NumbersValue(100%)OfferpriceServiceStation(2)168-10%B+2%FranchisedParts-store(3)1180-85%B+5%OtherKeyClients8(includingMilitary,localSOEtransportationfirms5-7%B+10%Notes(1)ComponentinGuangzhoucentermainlyservetoabovethreechannels,thereisanotherminorpartofthecomponentswhichisprovidedtonearbyprovincesatatemporarybasis(2)Eachyear,FAWwillchecktheperformanceofservicestations’componentbusiness,twomajorcriteriaare:componentladingvolumeandpaybackcircle(3)Somewellperformedfranchisedparts-storesarenotsatisfiedwiththeB+5%pricingpolicyforthereisnoofferingpricedifferencebetweenthegoodstoreandbadstoreAverageannualcapitaloccupation:RMB3.5million,amongwhichRMB400KarethosewithoutusagevalueTotalinventorycomponenttypeisaround3,200,amongwhich800for“WuPinChai”,680for“9Ton”AnnualSalesRevenue/Averagemonthlycapitaloccupation=3KeyProcessGuangzhoucomponentcenterdeliverstheordertoFAWChangchuncomponentcentereverymonth,theorderismadeon:Orderfromcustomers(servicestation,franchised-store,keyclient)1Unfulfilledorderlastmonth(dataareinPC)Experience:e.g.Driver-cabwillhaveastrongsalestrendinrainingseasonOrderfulfillmentratebetweenFAWChangchunandFAWGuangzhou:80%-90%OrderfulfillmentratebetweenFAWGuangzhouandservicestationiscomplainedtobelow,thisismainlydueto:FAWhadinvestedthelocalservicestationswithahugeamountofcomponentsasthesupport,mostoftheservicestationsdonotpaybacktoFAWofthesecomponents,FAWwilldeductthecomponentcompensationfromtheiroweddebt.Tothosewhohasalreadypayback,FAWwillofferbothcashandcomponentsasthealternativeforcompensationSomeservicestationdonotdeliverordersheetatallItwilltake40daysfromcustomers’makingtheordertotheirreceivingthecomponentsMarkettrendMostoftheend-users(especiallythenewtruckusers)arewillingtopurchasetheFAWcomponentwithhigherprice,theycaremoreaboutthecomponentsqualityRoadtransportationwillgraduallyreplacetherailwaytransportationsincecustomerstendtocaremoreofthetimingratherthanthetransportationcostTime(fromChangchutoGuangzhou)Cost*RoadTransportationAtmost7daysHigherRailwayTransportationAtleast7daysLower*DetailnumbersnotavailableSuggestionsFAWcouldsendthecomponentsmadebyout-sourcedmanufacturesdirectlytoregionalcomponentcenterstocutoffthecostforextrapackage,transportationTothosenewlydevelopedcomponents,R&D/Service&ComponentdepartmentinChangchunshoulddeliverusthelistof“easybroken”partswhichcouldhelpcomponentcentertopredictthefutureorder2