ZhuhaiRenfuZhuguangAutoServiceCo.Ltd.INTERVIEWDATE:11March2000INTERVIEWERNAME:JaneXuIntervieweeNameMr.LaoJianrongPositionGeneralMangerCompanyandAddressZhuhaiNanpinIndustryDevelopmentZoneTelephone/Fax8670282BackgroundZhuguangisa100%SOE,itstartedtosellJiefangtruckin1999.6,totalsalesbytheendof1999is180unitsZhuguangisthebiggestFAWpassengercardealer,1999passengercarsalesvolumeofis3,300units(1998:1800units,1997:300units)Salesof1999:RMB450million,2000salestarget:RMB700millionIthas4trucksalesbrancheslocatedatKaipin,Maomin,ZhongshanandZhanjiang.Kaipinisa“YouxinMarket”Totaloperatingcapital:RMB110millionKeyIssuesProfitabilityTrucksalesprofit:RMB2,000toRMB3,000outofRMB10,000Note:(1)AveragesalesprofitofJettacouldreachRMB5,000outofRMB10,000(2)Fortruck,RMB11millionoperatingcapitalcouldonlygetaverage1millionprofitback;whileforAudi,RMB20millionoperatingprofitcouldgeneratearound12millionprofitRebate:Mr.ZhucomplainsthattherebatingsystemofJiefangisconfusing,hedidn’tknowtheaccuratenumberofrebatehegotfromlastyear’ssalesFAWneedstopayattentiontotheproductimprovementandbrandimagebuildingTruckexternalandinternaldecoration–MostofthetransportationbusinessownerinGuangdongalwaystraveltogetherwiththedriver,ahighqualityandcomfortabledrivecabisrequiredShowroomestablishmentMarketpotentialMr.LaoholdsapositiveattitudetowardstruckdevelopmentinZhujiangDeltaArea—Increasedcontainertransportationbusinessneedshugeamountofheavytrucks1KeyProblemswithFAWIrrationalresourcedistributionWereachedasalesvolumeof180unitsinthepasthalfyear,ifwecouldgetenoughtrucktosell,salesvolumecouldreach300inthesameperiodWeneedtotransporttrucksfromother“YouxingMarket”warehouseinGuangdongwhenourinventoryrunout,thisisbothtimeandmoneyconsuming(dealerneedtopaythetransportationcostincludetolls,extramanagementfees,etc.),“3in1”ConceptsMr.Lao’ssuccessinpassengercarsalesismainlybasedonitswell-performedservicefunction.Mr.Laothinkaservicefunctioncouldatmostincreasethesalesvolume(passengercar)by3timesMr.LaoishesitatingabouttheestablishmentofJiefangservicestationJiefang’scurrentrebatingpolicytowardsdealerwithservicefunctionisnotthatattractive,Jettaprovide2%rebategapforthosewhohastheservicefunction,Jiefang’srebategapisonlyaround0.5%Highinvestmentandexpense:Apartfromthehighinitialinvestment(aroundRMB3million),averagesalaryofareparationworkerwhocouldindependentlyfinishthekeyreparationworkcouldreachtoRMB7,000toRMB8,000permonth2