FAWGuangzhouShenglongTradingCompanyINTERVIEWDATE:5May2025INTERVIEWERNAME:JaneXuIntervieweeNameMr.LiaoQiulinPositionPresidentCompanyandAddressYanlinShenglongAutoexhibitionhallTelephone/Fax0-13802986227SummaryWithalargeinvestmentinFAWservicestation,ShenglongtendstohaveastablerelationshipwithFAW,plusthestrongmanagementteam,itisapromisingFAWdealerinGuangzhouBackgroundGuangzhouShenglongisa100%private-ownedfirmestablishedin1995withinitialinvestmentRMB2million.Itestablsihedatruckre-fittingcompanyin1997anddevelopedanewfirmnamedGuangzhouBaiyunYunliin1999.It’soverallbusinessscopecovers:1.Trucksales(lighttoheavytruckfromFAWandSAW)2.FAWtruckservice(withinitialinvestmentRMB3million)3.Componentsales4.Truckre-fitting(before-salesserviceincludingfixingaftertransportation,truckcustomization)5.Truckpurchasingservice:patent,insuranceserviceetc.TotalautosalesrevenueofGuangzhouShenglongin1999isRMB200million,totalautosalesvolumein1999is1,500unitShenglongsold380Jiefangtruckin1999,amongwhich205areJiefangChangchun,120areJiefangQindao,55areJiefangLiuzhou.It’sDongfengsalesvolumein1999isaround300,mosttrucksarefromSAWLiuzhou(‘ChenglongWangzi’)Profitability:1.Trucksales:RMB1,500-2,000perunit2.Service:profitratenotavailable,butthetotalservicerevenueincreasequicklyfromthefirstmonth’sRMB4,000tillthirdmonth’sRMB32,0003.Componentsales:netprofitrate20%to30%4.Truckpurchasingservice:aroungRMB1,000perunitTherearealtogether80peopleinGuangzhouShenglong,15forsales;20forserviceand23forre-fittingKeyIssuesCustomerbase90%ofthetruckbuyersareindividualswhodotransportationbusiness1CompetitionCompetitionbetweenJiefangandDongfengismainlytheproducttypecompetition.Jiefang“2TonWang”iscurrentlyfacingserverchallengefromDongfeng’s“ChenglongWangzi”(2TontruckproducedbySAWLiuzhou).Jiefang“2TonWang”isnowfacingpatentlimitationwhilethesametype“ChenglongWangzi”couldstillgetpatentthoughitsactualloadcapacityisalso5TonBrandmanagementisimportantforthetrucksales,JiefangneedtohavesomethingdifferentinitsbrandimageastodifferentiateitselffromthehotcompetitionCustomer’spurchasingchoosewillmainlyfocusonlight/heavytruckbeforegovernmentpolicytowardsmediumtruckbecomesclearPricingControlIt’sprettyhardtoconductaneffectivepricecontroltowardstheChinesedealers.Forexample,JiangLinisnowadoptingaunifiedretailpricepolicyamongallofitsdealersastocontrolthehotpricecompetition,butsomeofdealersstillsoldtruckunderthepricelimitationbutwriteinvoiceswiththeregulatedprice.It’shardtodetectthiskindofcheatingHumanResourceMr.Liaoregardshumanresourceasacriticalpartforthesuccessofhisbusiness,herecruited8undergraduatestudentsfromWuhanAutoIndustryUniversitythisyear.HehasalsoinvitedtheServiceDepartmentManagerofSAWLiuzhoutomanagehisservicestation“3in1”ConceptMr.Liaoaimstoestablishapowerfulcustomernetworkthroughtheserviceheprovideandgainusefulinformationfromcustomertohelphimdecidehisordertype/volumeandbusinessportfolio.AmongtheprivatebusinessownerinGuangdong,Mr.Liaobelongstotheminoritywhocaresthelong-termbusinessinterestratherthantheshort-term.KeyProblemsDealersneedtopayextrafeesfortheunscientificresource(truck)inventorydistributionThereare9“YouXingMarket”inGuangdong,whenwearerunoutofinventoryandthereisnotruckavailableinFAWGuangdongWarehouse,weneedtoorderthetruckfrom“YouXingMarket”,butweneedtopaytheextraRMB600forthiskindoftruck:RMB300paytothe“YouXingMarket”,RMB300fortrucktransportationtollsFAWshouldthinkhowtoserveitsdealers,especiallythedealerswhoprovide3in1business.FAWresponseslowlytotheproblemraisedbydealers/servicestations(seedetailsin‘Guangzhou_service2_0310’)2