DongFengTruckSalesCompanyINTERVIEWDATE:5May2025INTERVIEWERNAME:PaulGao,AnneWangIntervieweeNameMr.ChenBinPositionDeputyManagerofMarketingDepartmentCompanyandAddressDongFengTruckSalesCompanyNo.16RenMinSouthRd.,Shiyan442000,HubeiTelephone/Fax(0719)8258409(0719)8258214BackgroundInJuly1999,DongFengheadquarterundertookanorganisationalrestructureanddividedintofiveindependentcompanies:Trucks,Passengercars,Spareparts,Agriculturevehicles,andaDongfenglistedcompany.Amongthefivecompanies,TruckCompanybearsmostofthefinancialburden.DongfengTruckSalesCompany,asubsidiaryofDongFengTruckCompany,mainlysellsDongFengmediumandheavytrucksproducedinShiYanbase.TruckSalesCompanydoesnotselltrucksproducedinDongFeng'srefittingfactoriesinXinjiang,Yunnan,Liuzhou,HangzhouandSiping,etc.NordoesTruckSalesCompanysellchassistothoserefittingfactories.Besidessellingpartsformiliaryuse,fornewproductsorforwarrantyuse,TruckSalesCompanydoesnothavesparepartssales.ThereareninedepartmentsandonesalescompanyinDongFengTruckCompany.UnderTruckSalesCompany,therearefourregionalbranches,elevenmajorbranchofficesandthirty-eightprovince-levelsalesoffices.Mr.ChenisthedeputymanagerofMarketingDepartmentinDongfengTruckSalesCompany.(PleaseseeDongFeng'sOrganisationalChartfordetail)SalesTotaltrucksalesvolumein1999fromTruckSalesCompanyis92,000.Targetfor2000is100,000trucks.Amongthe92,000units,40%arebuschassis.40%ofthesalesarerealisedinShiYanCitythroughseveralbigdealers.(ThereisonedealerinShiYanwhosold20,000trucksin1999)Frommid90's,DongFenglaunchedothertruckbusinesses,e.g.,second-handtrucksales,instalmentpayment,truckleasing,etc.However,thosetrialsseldomsucceeded.Mr.Chenthinksthatthe1supportingbankingandsocialsecurityservicesarenotwelldevelopedforthosenewbusinessessofar.Channels:Currently,DongFengTruckSalesCompanymainlysellsthroughdealernetworks.Directsellingisonlyadoptedformiliarytruckorders.ReasonsforDongFengtogiveupdirectsaleschannelare:labourcostwillbemuchhighertodevelopastrongsalesteam;dualtaxwillbeleviedbothinShiYanandinactualsalesregion;inventorycostwillbehigherwithslowercapitalturnover.DongFenghasadealernetworkwithmorethan3001stdealers.Inearly90's,DongFengbuiltalotofSOEdealersfromlocalJidanorWuziGroup.Thosedealerswereregisteredas"DongFengLianheCompany"or"DongFengSalesCompany",butDongFengdidnothavestrictcontroloverthem.InMid90's,Jidian/Wuzisystemsundertookalargescaleofreform.Meanwhile,marketdemandfortrucksshrank.ManyDongFengdealerswentthroughfinancialdifficultiesandterminatedtheirrelationshipwithDongFeng.DongFeng'sdealernetworkisgreatlyinfluencedinmid90's.Inordertoestablishamoresteadyrelationshipwithdealers,DongFengnowrequiresdealerstomakesomeinvestmentsuchas"YouXing"marketor"3in1"capabilities.Inordertoencouragedealerstodeveloplocalmarketandselldirectlytoendusers,certainrebatesystemisdesigned.Now,adealerwhosellstoendusersinitsownregioncangetprofitfrom:Regulartruckpricemargins;Salesrebateevery3months.Fourrebatestandardsaredesignedaccordingtosalesvolume:Below5050-100100-200Above200Maximumrebateis3000RMBpertruck."LocalSales"bonus.Salesrealisedindealer'sareaareadditionallyencouraged.E.g.,ShanxiDealercangetthisbonusifhisendusersareinShanxi.IfaShiYandealercomestoShanxiandsellstoShanxiendusers,thedealercannotgetthisbonus.DongFengsetupstrictpoliciestoend-userstocontrolcross-regionsale...