Service StationJiangsu0313

Jiangsu Service Station StatusINTERVIEW DATE:March 13th, 2000INTERVIEWER NAME:Anne WangInterviewee NameMr. Lin Yi-ningPositionBranch On-site Representative Company and AddressFAW Jiangsu Branch OfficeTelephone/Fax(025) 5474382BackgroundKey IssuesConclusionsBackgroundn There is only one service station - Nanjing Service Station, in Nanjing City. As this service station is not operating well and is planning for relocation, Mr. Lin and Mr. Liu gave me a brief introduction but didnt brought me to the site.n There is around 17 service stations in Jiangsu provice, but only one service station in Nanjing.n Nanjing Service Station originates from a state-run transportation company. All 17 service stations in Jiangsu originate from SOEs.n As one of the earliest FAW service station, Nanjing Service Station is established in 1989, and the location of Nanjing Service Station now belongs to urban area of Nanjing City.n Annual parts sales ranges from 1.5 Million RMB to 5 RMB, with an average of 2 Million RMB per service station. Considering the huge market size of trucks in Jiangsu, these sales figures are not satisfactory.n As those service stations are responsible for the labor cost of their parent companies, employee numbers are very large. One service station owns more than 200 FTES while more than half of them are retired.n Most of the parts are sourced from Shanghai Spare Parts Centre, while small portion of parts are directly purchased from FAW suppliers, e.g. Wuxi Engine.Key Issuesn Mr. Lin found that some employees in service stations steal the parts out to sell separately. Profits are shared among those employees.n Service quality of all service stations in Jiangsu is far from satisfactory. Technicians are not well trained due to the lack of working capital. Service attitude of those service stations lacks enthusiasm. There is internal HR disputes among those managers.n Income of service drops down in Nanjing Service Station due to the location issue. As it locates in the middle of city, no heavy trucks are allowed to get in at daytime. Thus passenger trucks have no chance to stop and buy parts from Nanjing Service Station. Relocation issues have been discussed but no result reached currently. At present Nanjing Service Station only get some income from its old customers. n Most of the technicians are not well trained; at the same time, FAW is slow in communicating with service stations about its new truck types, new technologies adopted, etc. It takes even longer time for the service stations to get maintenance manual for those new trucks.n Difficulty in capital is mainly because of the inventory obsolescence. Limited by their SOE parent companies, managers of service stations is reluctant to sell out-of-date parts and expose the inventory loss.Conclusion Most of the service stations in Jiangsu are originated from old, state-owned transportation / auto repair companies. With a heavy financial burden of lobor cost and SOE mechanisms, business performance of those service stations are not satisfactory. Newer and more flexible service providers should be introduced to encourage competition among service providers2