Li Jinyi, Deputy Director of Marketing at Shanghai Fleetguard Filters Co., Ltd., received an exclusive interview with reporters on the distribution channels, after-sales service competitive advantages and marketing strategies. Li Jinlu said that with the increase in emissions, very high demands are placed on fuel and air filtration, which brings us a lot of market opportunities and profit sources. Reporter: The market competition for automotive filters is very fierce. The main competition is in the aftermarket. Some people think that the filter aftermarket has entered the era of meager profits in China. How do you see filter companies competing in the matching market? Li Jinyu: 1. As a filter supplier with the same strength as Shanghai Fleetguard, he can develop and establish product standards at the same time as the main engine plant, which will win more profit. If you follow the example only, there is limited room for profit. 2. With the increase of emissions, very high requirements are imposed on fuel and air filtration, which brings us many market opportunities and profit sources. Filters, tires, and oils are fast moving consumer goods in automotive products. Both in the aftermarket have common points and different characteristics. Among them, the filter lacks the standard unity, and each manufacturer has its own standard. Therefore, we spent a lot of energy to communicate with the OEM, through the OEM to make product differentiation, with the pre-installation to establish the standard after-loading. Reporter: Although China's aftermarket has developed rapidly, there are still many problems. What do you think are the current weaknesses in China's aftermarket? Li Jinyu: In the aftermarket, given the characteristics of commercial vehicles, drivers may be inclined to buy inferior products; passenger car owners value safety and comfort more, and are more willing to take the initiative to find the original spare parts. Different consumer groups have different requirements for parts and components. The biggest problem in the aftermarket is the impact of counterfeits, and it is still difficult to find effective solutions. Our approach is to promote the distribution network and security features. Reporter: For dealers, the terminal store or auto repair factory, if there are several adulteration in 10 products sold, profits will be much higher, this situation will become a dealer management challenges? Li Jinxi: Yes, so my team often travels, supervises distribution channels, and does interviews and surveys at terminal stores. Reporter: How do you think the filter will perform in the aftermarket in China in the next five years? Li Jinlu: In recent years, the market volume of filters has increased at a geometrical rate. Last year, we conducted a survey showing that the filter has a market capacity of 12 billion yuan. From the calculation of the service life of the car, I think that there will be a level of 20 to 25 billion yuan in the next five years. Its base is very large. Reporter: Is there such a potential risk as the user may behave differently after the car has run for three or five years? Li Jinyi: That's right. Segment the target customer group: After the car has run for one year, the OES store will do the after-sales service; when it is 2-3 years, independent distribution will start to play a role. As far as my observations are concerned, there is a habit in the domestic commercial vehicle industry. People who buy new cars will always buy new cars and they will change within three years. This will increase operational efficiency and reduce maintenance troubles; those who buy used cars People will always buy used cars. Those who have been buying new cars are our most important target customers. Reporter: What distribution channels such as Fleetguard filters and cooling additives are sold to consumers? Li Jinyu: Fleetguard filter entered China very early, began after-sales deployment in 1998, the network is mature, there are three parallel distribution channels: the largest is the independent distribution, there are more than 110 independent distributors and end customers across the country Secondly, since Fleetguard Filter is a joint venture between Dongfeng and Cummins, the products will be distributed through Dongfeng and Cummins' own after-sales system. Finally, after-sales service support from OEM supporting manufacturers, ie, OES. The first-tier dealers that are distributed independently are located in each provincial capital city in the country. According to the layout of local vehicle ownership, our ultimate goal is to distribute outlets in 332 cities across the country. Reporter: Where are the competitive advantages of Fleetguard filter after-sales service? Li Jinyu: 1. A long history of filter manufacturers, the earliest entry into China's international filter brands. 2. The supporting capacity of the semi-autonomous enterprises in China. 3, high product quality consistency. 4. Relatively complete after-sale channels, we began to recruit dealers with reputation in the market from 1998; 5. Have a large number of loyal users. Fleetguard filter products have brand influence and reputation and win the trust of end-users. They have had a good experience and will in turn find our channels, resulting in the active demand for products. Reporter: What are the plans and strategies of Fleetguard filters in the aftermarket in the 12th Five-Year Plan period? Li Jinlu: We have indeed done some research and strategic positioning is the first choice for domestic customers in the field of commercial vehicles and construction machinery, providing end-users with cost-effective products that are easy to purchase. Reporter: The level of assembly standards for urban public transport systems has been increasing. Does Fleetguard have any investment in urban public transport? Li Jinxi: We put a lot of energy on the city bus. There are not many competitors and suppliers that have strength now, and the rest are products that will be eliminated. The continuous improvement of emission standards has brought great market opportunities to companies with research and development capabilities and product stability. In first-tier cities such as Shanghai, Shenzhen, Beijing and Guangzhou, we will actively look for market opportunities. Reporter: Are you worried that first-tier cities will switch to electric vehicles due to high emissions? Li Jinyu: Do not rule out this possibility. However, it takes at least 10 years for public transport systems to achieve 100% use of electric vehicles. Our products still have a large market demand in North America. The Chinese market is at least five years behind the North American market, so I am very optimistic about the development prospect of filters in China.
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