BengbuJidianGroup,AnhuiYiqiTradingCo.LtdINTERVIEWDATE:March15th,2000INTERVIEWERNAME:AnneWangIntervieweeNameMr.ZhuXianjinPositionSalesManagerCompanyandAddressBengbuJidianGroup,AnhuiYiqiCo.Ltd.No.170QuanJiaoRd.,Hefei230011Telephone/Fax(0551)4481734BackgroundKeyProcessesKeyIssuesConclusionsBackground.AnhuiYiqiLianheisasubsidiaryofBenbuJidian.AnhuiYiqistartsthebusinessinApril1999.AnhuiYiqiisanexclusivedealerofFAW,andmostlysellstrucks.Lastyearitsold500trucks,amongthemthe2-tontrucksaremostwelcomedbyendusers.70%ofthetrucksaresolddirectlytoenduserswhileother30%aresoldto2ndlayerdealers.AnhuiYiqithinksitmoreprofitabletoselltousers.AnhuiYiqiisentitledtoturnovertrucksat30truckspermonth.Mostofthetrucksaresoldinonemonth.Grossmarginfortrucksisaround1000RMBpertruck.Netprofitfortrucksisalmostzero.Thosefiguresareexcludingrebate.Thusrebateisthemainsourceofprofitlastyear.KeyProcesses/OperationsCustomerdevelopmentofAnhuiYiqiispassive.Itusuallystaysinthestoreandreceivesphonecalls.SeldomdoesAnhuiYiqisenditssalesmentocustomers.Mr.Zhudoesn’tthinkitnecessaryasAnhuiYiqihasitscredibilityinHefeimarket.Waytomanage2ndlayerdealersistosendAnhuiYiqi'ssalesmentoresideindealer'slocationforacertainperiodtosupervisethesales.Thereisnoinstalmentserviceprovidedtoend-usersalthoughlargeportionofsalesisdirectlytoend-users.AnhuiYiqiisplanningtoapplytheinstalmentservicein2000,however.KeyIssues1Thereisnolicenseserviceprovidedtoendusers.Mr.Zhuexplainsthatit'sbecausetheyarethenewcomerinHefeimarketandhaven'testablishedgoodrelationshipwithlocalautomanagementbureau.AnhuiYiqiisgoingtobuildsucharelationshipwiththebureauthisyear,andprovidethelicenseservicetocustomerswiththebureau'sassistance.AnhuiYiqidoesn'thave3in1capabilitiesandisnotgoingtobuildtheminthenearfuture.Mr.Zhudoesn'tthinkthe3in1capabilitieswillhelptheirbusinessalot,astherearealreadyplentyofserviceprovidersinAnhuimarket.Inthebeginningofthisyear,thenewsaboutWTOhassloweddownAnhuiYiqi'ssalessignificantly.Potentialcustomersheldbacktheirmoneyandwaitforthedealerstocuttheprice.ThoughthesalesresumedafterSpringFestival,Mr.ZhuworriesthatcustomerswillstillbeverysensitivetothenewsaboutWTOprogress,especiallyabouttheautoindustry.Mr.Zhuthinksthat,asJiefangBrandismorewelcomedthanDongfenginAnhuimarket,FAWcantrytoraisethepriceforsomebestsellingtruckmodels.ThepricecanbeseveralpercenthigherthanDongfeng'ssimilartruckproductandcustomerwillstillaccept.However,Mr.Zhufeelsitverydifficulttogiveestimationonhowmuchhigherthepricecouldbe.FAW'sheavy-dutytrucksarenotsellingwellinAnhui,forDongfeng's9tonself-loadtrucksareverycompetitiveinprice.PricedifferencebetweenFAW/SAW's9-tontrucksis5,000-10,000RMB.ConclusionsAnhuiYiqiisaSOEdealerwithbiginfluenceinlocalmarket,butitssalesmodelisratherconservativeandlessadvanced.ThoughAnhuiYiqiisconfidentinFAWbrand,it'snotwillingtomakeupfrontinvestmentin"3in1"capabilities.2