BeijingSAWCompetitor0302

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1、A SAW Dealer in Beijing INTERVIEW DATE:March 2, 2000INTERVIEWER NAME:Bill HeInterviewee NameMr. TanPositionManager Company and AddressFengtai, BeijingTelephone/FaxN/ABackgroundn Mr. Tan was introduced by Mr. Songtao, General manager of Beijing Wanrong Automotive Sales Compnay. For obvious reason, Mr

2、. Tan only want to be identified as Mr. Tan. Therefore, we dont know his full name and the name of his company. The following is the information we got from the inteview with Mr. Tan.n SAW also want to push for “Four-in-One” dealership network. Beginning last year, SAW tried to identify one qualifie

3、d “Four-in-One” dealer in one area. n SAWs sales incentive to dealer is similar to FAW. They sell Dong Feng trucks to dealer at a discount. They also give year-end rebate to dealers. For example, the rebate for orders less than 50 trucks is RMB 600 per truck. The more a dealer can sell the more aggr

4、egate rebate and rebate per truck it can get from SAW.n However, their distribution channel is confusing, even more severe than FAW. Anyone can get Dong Feng trucks from anywhere at any price. Moreover, SAW has more “debt” trucks on the market than FAW. Those trucks can be dirty-cheap and really dis

5、rupt the market.n In Shiyan, the headquarters of SAW, there are more than 2000 dealers. Many Dong Feng dealers, especially the big ones, are private companies. Some of them are not professional when conducting business. SAW suffers from the huge outstanding overdue due payments. Because of the lost

6、in sales revenue, the Sales Department of SAW has changed personnel twice in three years.n SAW produces about 200,000 trucks and it sells 2000 to 3000 trucks in Beijing annually. There are 5 SAW dealers in Beijing but only 2 are in good shape. Mr. Tans company is one of the two and it used to sell 1

7、,600 to 1,700 Dong Feng truck annually. However, his company only sold about 1,000 Dong Feng trucks last year.n The prices of Dong Feng trucks vary a lot. If customers pay cash to purchase a truck, they can get 8% discount instantly. SAW also offers support to put inventory at dealers warehouse. Mr.

8、 Tans company keeps 60 truck as inventory for SAW as its warehouse. If Mr. Tan couldnt sell a truck within a certain period (three months or six months depending on the contracts), he has to buy the truck from SAW and pay for it immediately.n SAWs sales department has eight big areas. The Beijing ar

9、ea has been downgrade to Beijing sales department this year. The Beijing area used to include Beijing, Tianjin, and Hebei. The new established Beijing sales department is responsible for Beijing only.n Baoding became a big city re the sales of Dong Feng trucks. Ronghua company, a private company, so

10、ld 10,000 Dong Feng trucks last year. However, it owes significant money to SAW, too, because many of its customers didnt pay after the trucks had been delivered.n Besides the Beijing Sales Department, SAW Sales Department has another representative office in Beijing. Through a subsidiary, the repre

11、sentative office sells trucks in Beijing, too.n SAWs distribution policies change a lot over the time. Some changes resulted in significant waste of investment for the dealers. Unfortunately, it is the dealer, not SAW, to bear that kind of cost. For this reason, Mr. Tan has been losing money on ever

12、y truck he sold in 2000.n According to the new pollution law issued by the Beijing municipal government, manufacturers have to sell environment-friendly trucks in Beijing in 2000. SAWs response to this government requirement was a little slower than FAW. Fortunately, there are a few products of SAW

13、are qualified for the new law.n The quality of FAW and SAWs products are almost the same. FAW has better technology (just a little) while SAWs trucks are stronger with greater over-capacity capability. Thats why Dong Feng trucks are very popular in Shanxi where the main purpose of truck is coal deli

14、very. For the parts sales only, the revenue reached RMB 100 million last year.n The profit for selling a Dong Feng truck used to be in the range of RMB 5000-6000. It has been reduced significantly to about RMB 1000 in the past three years.n Mr. Tan indicated that he didnt mind to sell Jie Fang truck at all. If his company has difficulty in selling Jie Fang trucks, he will suggest his parent company, Beijing Agriculture Mechanic Company, do Jie Fang truck business. Currently, his company only sells Dong Feng truck.2