FAWTradingCo.JiangsuBranchINTERVIEWDATE:March13th,2000INTERVIEWERNAME:AnneWangIntervieweeNameMr.LiuJinxiPositionManagerCompanyandAddressFAWTradingCo.Shanghai(Jiangsu)BranchOfficeNo.48DongFangCity,Nanjing210042Telephone/Fax13701982228BackgroundKeyProcessesKeyIssuesConclusionBackgroundFAWJiangsuBranchbelongstoFAWShanghai(Jiangsu)Branch.It'scontrolledbythesamemanagerandoperatedbythesamestaff.RecentlythestaffsinShanghaiBranchmovedtoJiangsu.Thereistotally4-5FTEsinShanghaiandJiangsu,includingonemanager,oneplanner,oneon-siterepresentativeandonestaffinShanghai.ExceptJilin,Jiangsusoldmosttrucks,almost8000trucks,in1999.SalestargetforJiangsuthisyearis7000FAWtrucksand1800Qingdaotrucks.Boththebranchandthedealersareconfidenttomeetthetarget.Thereare31stlayerdealersinNanjingandoneinWuxi.ThebranchisgoingtodevelopanewdealerinWuxi.(WuxiEngine).Undereachdealer,thereisarelativelyloose2ndlayerdealernetwork.Thosedealersareallocatedinallcounty-levelcities.Asmostofthe1stdealerswereoriginatedfromJidianGroup,dealersknoweachother,thusknowhowtocoordinatethenetworktoavoidrepetition.InJiangsu,FAWdominatesthemarket.AccordingtoMr.Liu,marketshareofFAWisaround75%to80%.ThisismainlyduetothehighFAWbrandloyaltyinindividualendusers,andthepoorservice/partssupplyofSAWinJiangsumarket.KeyprocessesJiangsuProvinceprovidesitsdealerswithturnovertrucksonabasisof30trucksmaximum.Toorderturnovertrucks,dealermustplacetheirorderone-monthbefore.Turnovertrucksarerequiredtobesoldinonemonth;ifthetrucksarekeptindealers'placeforthreemonths,thedealerisresponsibletopurchaseitandbeartheloss.1Mr.Liusuggestsaminimumsellingpricetobeappliedamongdealersinordertoprotectdealers'profit,andpreventthepricewar.ThereisapolicyfromFAWofminimumsellingprice,butnotissuedrightnow.KeyIssuesTherelacksresourceinJiangsuBranchtoconductinformationcollectionandcommunicationofnewtruckproductinformation.Mr.Liuthinksitveryimportant,butcurrentlythereareonly4peopleinJiangsuandShanghai.Moreover,FAWonlyallowshimtopay500RMBpermonthtohirelocalemployees.ThoughMr.Liuishappywiththesalesperformanceofdealers,heisverydiscontentwiththeservicestandardinJiangsu.Asalloftheservicestationisstate-run,therelacksflexiblemechanism,andsenseofcompetition.JiangsuBranchkeepsreceivingcomplaintsfromcustomersandevendealers.Mr.LiuisthinkingofintroducingsomenewserviceprovidersinJiangsumarkettoinitiatesomecompetitioninservicing.Lastyear,partofJiangsu'ssalesgoestoShandong,asLinyi'sdealercomestoJiangsutoselltrucks.ThereisnotransportationfeeproblemconcernedasJiangsuisevenfurtherfromFAW.Toprotectthedealer'sprofitMr.Liuthinksit'sfeasibleforsalesacrosstheregion,aslongasthesalesarenotpricecompetition.Mr.Liuisconsideringexpandingitsmarkettoneighbouringcities.HewantsJiangsutoattractmoreendusersfromotherprovinces,notbypricebutbyservicequalityanddealerimage.FAWistooslowinresponsetomarketdemand.Smallrefittingfactoriesactveryquicklyinchangetheirtrucktypesandgoondirectory.AssomerefittingtrucksarebrandedJiefang,itimpactsthesalesofJiefangtrucksfromFAW.Thisyear,QingdaotrucksareincludedinthesalesofFAWtrucks.However,asQingdaotruckspricedlowerthanFAWtrucks(partofQingdaotrucksaretruck-for-debt),whentherearesomeQingdaotrucksinthemarket,FAWtrucksslowsdowninsales.Mr.LiuthinksitsannoyingasQingdaotrucksisofsmallnumber,butmakesbigimpactonFAWtrucksales.HehopeFAWcouldregulatethepriceanddistributionchannelofQingdaotrucksinthisyear.ConclusionsJiangsuProvince'ssalesareamongthelargestin1999,secondonlytoJilin.UsersinJiangsuareapossesshighloyaltytoJiefangbrand.DealersinJiangsuareconfidenttoworkwithFAWandwillingtoinvestinvalue-addfuctions.However,lesssatisfactoryservicestandardmightbringpotentialriskoflosingmarketshare,whenSAWorothercompetitorcomestoJiangsuwithbetterserviceofferings.2