ChangchunXingming

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1、Changchun Xingming Material Trading Company INTERVIEW DATE:March 14, 2000INTERVIEWER NAME:Bill HeInterviewee NameMr. Du Ming, General ManagerCompany and AddressChangchun, JilinTelephone/Fax0431-7622045Backgroundn We began to sell FAW brand seven years ago. At the beginning we sell every brand of FAW

2、. We have been selling Jie Fang trucks only since late 1996. We sold 2755 trucks in 1999. Revenue was RMB 400 million. Profit was RMB 2.7 million. We sold 1758 trucks in 1998. Revenue was RMB 200 million. Profit was RMB 1.3 million. The performance of 1999 would have been better if there hadnt been

3、the WTO deal between the U.S. and China and the Highway Law.n There are too many dealers now. Most of those “dealers” only appear during peak season to fight for the limited resource. You can never see them during the non-peak season. The current FAW policy treats us and those “dealers” equally. It

4、is in fact not fair to dealers like us who always help FAW to sell trucks regardless how difficult it is.n The quality of dealers is not good. We would like FAW offer us training during the non-peak season. We can pay for it.n We think Changchun only needs 5 dealers. FAW has to purify its dealer por

5、tfolio. If FAW can lay off its own employees, it sure can lay off unqualified dealers.n The dealers are obliged to help FAW to build its Jie Fang brand. As soon as FAW standardises the distribution channel, dealers can aggressively penetrate the market with FAWs support. The sales number is only one

6、 of the criteria FAW should use to evaluate the performance of a dealer.n FAWs dealer policy has to be stable and sustainable. Frequent changes of policy will hurt dealers feeling.n When resource is limited, FAW should treat dealers and modifying factories fairly. Dealers also need the resource to s

7、erve their customers. Also the working capital of those modifying factories should be used on purchasing raw material, not in pure truck transactions.n We plan to build the “Four-in-One” dealership within this year. We have submitted our application to the government and are waiting for response. As

8、 soon as we get the permission, we will begin the project. We plan to invest RMB 7 million in this project.n After FAW chooses the 5 dealers in Chanchun, the 5 dealers should coordinate with each other to set up a bottom line price to avoid the price war. In our opinion, 5 dealers can sell the same amount of trucks as 40 or even 100 dealers.n If FAW decides to separate second tier dealers from first tier dealers. First tier dealers should be fully authorised to manage the second tier dealers.2