FAWTradingCo.ShanghaiBranchOfficeINTERVIEWDATE:Feb28th,2000INTERVIEWERNAME:AnneWangIntervieweeNameMs.Huang,Mr.ZhaoChangfangPositionSalesManagerCompanyandAddressFAWShanghaiSalesCompany3rdfloor,No.498OuyangRd.,ShanghaiTelephone/Fax(021)56964700BackgroundKeyProcessesKeyIssuesBackgroundShanghaiBranchOfficebelongstoFAWShanghai(Jiangsu)salesregion.ShanghaiBranchOfficehasaroundfiveemployees.AllemployeesaretransferredfromFAWTradingCompanyHeadQuarter.TherearethreeregionaldistributorswhoareexclusiveFAWdealers.Thebiggestone,ShanghaiYiqiMotorSalesCo.,locatesjustdownstairs.Besides,Therearemorethan1002ndlayerdealerswhosellFAWtrucksinShanghai.Noneofthe2ndlayerdealersareexclusivedealers.Salesvolumesofthesethreedistributorslastyear:(unit)NameChassisLightMediumandHeavyShanghaiYiqiSalesCo.243294173ShanghaiFAWTrading3022971ShanghaiHongTaiCo.45459AsShanghaiisoneofSAW'straditionalbestsellingmarket,FAWtrucksarefacingstrongcompetition.Althoughnotmuchdifferenceisidentifiedbetweenthesetwoproducts,FAWtrucks'marketshareisgoinguptheseyearsfrom0toaround30%.Majorityofthismarketshareisachievedbypersonalrelationshipwithcustomers.KeyProcesses/OperationsShanghaiBranchOfficehasnodirectbusinessrelationshipwithcustomers.Whenapotentialcustomercallsforinquiry,ShanghaiBranchOfficewillrecommenditsdistributorstocontactwith.Mr.Zhao,whoisresponsibleforFAWsalesperformanceinShanghai,paysregularvisitstolargepotential/existingcustomerstocollectproduct/marketinformation.1ShanghaiBranchOfficeisalsoresponsibleforexecutionofHeadQuarterpolicies,e.g.,paymentadvanceorrebateratiotoitsdistributors.ShanghaiBranchOfficeprovidesfollowingfinancialsupporttodistributors:Trucksindealer'swarehouse:FAWtemperatelystoressometrucksinDealer'swarehouse.Bydoingso,dealerscansellthetrucksanddelivertoitscustomerrightaway.Turnaroundratioshouldnotexceed3monthsforthosetrucks.Rebatepolicyforthisyear:forShanghaidistributors,whentheirsalesvaluereaches8MillionRMBeverythreemonths,theyareentitledtoa0.5%rebate.Thereisanother0.7%rebateatyear-end,andbasedonannualreviewresults.RebatepolicyforlastyearPerthreemonthLighttrucksalesvalueMedium/HeavytrucksalesvalueRebateRatio2.4MillionRMB6MillionRMB0.8%6MillionRMB8MillionRMB1.0%10MillionRMB1.2MillionRMB1.2%Cashdiscount:IfadistributorcanpaycashatA-netpriceimmediately,acashdiscountof3%oftotalvaluewillberewardedtothatdealer.Forservicestationsandpartscenters,ShanghaiBranchcanprovideFAWunifiedimagestandard,includingplace,arearequirement,postersandproductcharts,etc.Servicestationsareencouragedfortrucksalesandwillenjoysamepolicywithdealers.FAWSalesCompanycannotprovidetechnicaltrainingsupporttodealersandservicestationsduetotheirlimitationofresources.KeyIssuesDealersdonotperformdata/informationcollectionandfeedbackproactively.ShanghaiBranchcannotprovideanykindoftechnicaltrainingforsalesmenandtechnicians.ComparedwithSAW,FAW'sservicestandardislower.Planningisdoneinahaphazardway,whichmakestheinventoryforecastinaccurate.ShanghaiBranchfeelsthattheyareunabletocontrolthemarketprice,orstopdealersfrompricewar.ConclusionsBesidesexecutingFAWHeadquarterpolicies,FAWShanghaiBranchlacksofownmethods/resourcestoencouragelocalsales.AsShanghaiisthetraditionalmarketofSAW,moreeffortsneedtobemadetoincreaseFAW'smarketshare.2