XiamenFAWDealerINTERVIEWDATE:5May2025INTERVIEWERNAME:JaneXuIntervieweeNameMr.WangYandongPositionVicePresidentCompanyandAddressXiamenJiguanAutoSalesCompanyTelephone/Fax0-13606902392BackgroundXiamenJiguanstarteditsbusinessinAugust1999.It’sastockcompany,individualstaffhold60%oftheshareJiguan’sbusinessscopecover:Trucksales(Jiefangonly)—2500m2exhibitionhallMr.Wanghasjustgottheapprovalofestablisha“tangiblemarket”Servicestation(Jiguanisnowatthefinalstageofapplyingfortheservicestationapprovalfromprovincialcompany)FujianComponentCenter---600m2JiguantakeoverthecomponentprovidingrightfromFAW’sformerComponentCenterinFujian,nowitsalescomponenttolocalservicestationsandotherkeyclientsJiguanislocatedbeside324NationWayatthesuburbofXiamenSalesTotaltrucksalesreachedto301unitsfromSeptembertoDecemberlastyear,salesrevenueisRMB29.5millionAmong301trucks,250arefromChangchun,50arefromQingdao;295trucksaresoldintheformofchassisin1999End-userwillsendthetrucktore-fittingfactorytomadethetruckcaseashe/shewishes,andgetthesmalltruckpatentthroughhis/herrelationshipwiththekeylocalauthoritiesafterwardsProfitabilityProfitpertruckisaroundRMB3,000(1,500aresalesprofit,other1,500arequarterrebate)TotalcostfromSeptembertoDecember1999isaround230K,amongwhich2/5forplatleasing,1/5forsalary,1/5foradministrationcost,etc.Totalheadcountis9.AveragesalaryisRMB800,Mr.Wangprovidethemwithfreeaccommodation,bytheendoftheyear,thecompanywillofferthemsalescommissionandbonus.1Channels:Allofthe1999salesarewholesalesalesto2ndtierdealers.24altogether,locatedthroughoutofFujiantotransportationcompaniesJiguanstartitsretailsalessincetheendofFebruary2000,17trucksoutof25totalsalesaresolddirectlytoindividualend-usersMr.Wangtendstoestablishthefameofthefirmthroughthedealwith2ndtierdealersandgainprofitthroughthebusinesswithend-usersMr.WangcomplainedthatFAW’spricepolicyisovertransparent,2ndtierdealersknowclearlyabouthisbuyingpricefromFAWandthereisalmostnoprofitforhiminthedealswith2ndtierdealersCompetitionQingdaoFujiancustomerslikelongervehiclecases–InFujian,railwaysarelessdeveloped(thereisonesinglelinearoundtheedgeofprovince);mostofthetransportationneededtobefinishedbythedevelopedexpressroadsystem,customerlikethelong-vehiclecaseswithsmallpatentandlargecapacitywhichcouldenlargetheirprofitpertripBestsoldproductinFujian1999isQindao5Ton8.7m,7Ton9.6m.(OverallsalesvolumeofQindaotruckinFujian1999isaround3,800units,includethesalestotheprovincearoundFujian)IncomparisonwithQindao,Changchunproductshasadisadvantageinproviding9.6mlength‘daliang’,onlyQingdaocouldproduceitsinceQingdaohastheonly9.6m‘ChongYa”machineinChina.Thelongest‘daliang’Changchuncouldproduceis7.8mSAW/Liuqi“Chenglong”seriestrucksquicklygraspalargemarketshareinSouthChinaaftertheproductintroductionthroughSuccessfulAdscampaign—“Chenglong”playeditsAdsinCCTV-4foralmostonemonth(withabackgroundofintroducingtheemergingLiuqiandits“menuorder”service)Favoringpolicytowardsdealers—Liuqiprovideitsdealerswithinstallmentpaymentserviceandleadalooseattitudeindispatchturnovertrucksattheverybeginningofproductintroduction“Chenglong”truckisfitforFujianmarket“YuChai”’senginecouldbetteradaptedtothehighertemperatureinSouthChinathanDachaiandXichaiChenglong‘s“houqiao”(whichissingle-speeddeceleration)couldfitmoreforthemountainousarealikeFujianratherthanJiefang’shouqiao(whichisdouble–speeddeceleration)“3in1”operations2JiguanhasalreadytakenoverthecomponentcenterdealershipfromFAW.NewcomponentcenterstartedoperatinginNovember1999.SalesrevenuetillnowisaroundRMB900K.TotalSKUis200+,averageinventorylevelRMB200KThecomponentpriceJiguanggetsfromFAWisonlyB-5%(anastonishingfavoringprice),itprovidesthelocalservicestationwiththepriceofB+5%,tocomponentfranchisedstoreisB+8%JiguanisnowatthefinalstageofapplyingaservicestationapprovalfromFAW.AccordingtoMr.Wang,Jiguanwillnotcarryoutthereparationserviceafterstation’sestablishment,Mr.Wangthinkitwillbebothenergyandtimeconsuming,hewillonlydocomponentreplacementintheservicestation,thetotalinvestmentforsuchkindofstationisunderRMB100KProblemsChangchugetstooslowreactionstowardsmarketchange;productimprovementneedtotake6to12monthstofinishinFAWChangchun,improvementplanneedtobeagreedbyalmostallthepartiesinChangchunandeachsteptakeslongtime;whenaimprovedproductfinallyun-veiled,marketchangesagainandFAWthusputitselfinain-efficientcircleFAWiseasytoneglectitsservicequalityinthesaleshighseasonlikeMarch,April…ActuallytheserviceisthemostimportantprofitresourceforFAWinthelowseasonFAWdon’thaveadvantageinAdspromotion:FAWshoulddelivertheAdstoitsend-usersatapropertimeratherthanatanytime(e.g.usuallytheend-userswillthinkoftheirannualbudgetduringthespringfestival).AnAdsplaysbeforethehighseason(September)couldalsobeagoodalternativeforadvertisingFAWislackofimpressiveAdsidea.FAWtruck’sforeverboringblueshouldbechangedforproducts’eye-catching(FAWcouldlearncardecorationfromMistubishi)3