With an average of 10 “disappearing” every day, what do 4S stores rely on to save themselves?

As we all know, the automotive industry is undergoing unprecedented change, and this change is from the top down. As a bridge between auto brands and consumers, dealers bear the brunt of the flood of change.

Operational instability caused by the epidemic

The drop in offline passenger flow caused by the impact of interconnection

The weakening of the dealer function by the direct sales model

Cash flow pressure from high inventory

Previously, 51 Jun said in a report on the inventory of auto dealers that dealers are now generally in a “bad mix” business situation. According to a document issued by Cui Dongshu, secretary-general of the Passenger Car Association, there are currently 3.5 million passenger cars in stock in the national passenger car market, with 47 days in stock, of which 2.75 million are in dealers and other channels.

The fact that dealers are under pressure is a reality that cannot be ignored. According to data released by the China Automobile Dealers Association, there will be 2,362 new dealers nationwide in 2020. At the same time, 3,920 dealers will be closed and closed. The net decrease in dealerships for the year reached 1,558!

In the first half of 2021, more than 1,400 4S stores have been cancelled and more than 1,000 have been withdrawn from the Internet in the auto industry nationwide;

From January to April this year, close to 1,400 automakers across the country have withdrawn from the network, and nearly 10 4S stores disappear quietly every day…

It is an indisputable fact that dealers are operating poorly, and beyond everyone’s knowledge, 4S stores are withdrawn from the Internet not only in poorly managed brands such as American and French brands, but also in Japanese brands.

In 51 Jun’s daily visits to local dealers, we have seen Dongfeng Nissan brand 4S stores transfer the stores due to poor management.

In addition, when 51 Jun recently visited the local FAW Toyota 4S store, he also found that the store was empty. It can be seen from the pictures below that in the huge 4S store, only two sales are being broadcast live. In addition, other staff members and car-watching consumers have magically “disappeared”.

It can be seen that the difficulty of dealer operation is a problem faced by the whole industry, and no snowflake can be spared in the avalanche. Regarding the reasons for the poor management of dealers, I believe that 51 Jun does not need to go into details. From the previous description, it is clear that it is caused by many aspects.

Next, I will list the operation of some auto dealer groups, so that everyone can have a more intuitive understanding.

According to the financial report, the cumulative revenue of Yongda Automobile in the first three quarters of 2022 is about 53.278 billion yuan, a year-on-year decrease of 11.3%; the net profit attributable to shareholders is 1.16 billion yuan, a year-on-year decrease of 35.6%; the company should have a net profit of 487 million yuan, a year-on-year decrease 22.9%.

Ps. Yongda Auto Group operates dozens of domestic auto brands as an agent and is the largest auto dealer group in China.

Not only Yongda Automobile, but SINOMACH’s total operating income in the first three quarters of 2022 was 28.05 billion yuan, a year-on-year decrease of 11.5%.

Zhengtong Motor’s gross profit margin for new car sales in the first half of 2022 was 5.7%, down 1.8% from the same period in 2021. Not only that, Zhengtong Auto was also exposed in July this year that it owed a principal of US$380 million in term loan financing and had not repaid the instalments. Funding can only be solved by selling equity.

Not only in the two years after the epidemic, but in fact, the difficulties of dealers in operation have been showing signs in the early years. For example, in 2019, Dangda Group announced bankruptcy and reorganization; in August 2020, Rundong Auto was also applied for bankruptcy and reorganization by the bondholder due to arrears.

Large groups have constant problems, and it is even more difficult for small individual dealers.

According to the “Investigation Report on the Survival of Chinese Dealers” previously released by the China Automobile Dealers Association, in the first half of 2022, only 27.3% of car dealers were able to achieve profitability. In comparison, more than 50% of dealers achieved profitability in the same period last year. profit.

In terms of dealers’ sales tasks, only 45.1% of the dealers who can achieve more than 80% of the sales target in the first half of this year, less than half. In addition, 38.5% of the dealers’ half-year sales target completion rate is less than 70%!

For dealers, the only thing that can be expected now is the “crazy impulse” in the two months of the end of the year. But will the dealers get their way? In 51 Jun’s view, the difficulty is still not small.

According to the forecast of the Federation of Passenger Transport Associations, the sales of passenger cars in the narrow sense in October 2022 are expected to be 1.91 million units, which may even be lower than the performance in September. That is to say, the “golden nine and silver ten” that the auto people have been looking forward to has not brought the expected growth to the auto market. Under this market situation, if you want to have breakthrough growth in November and December, you can either count on miracles, or you can only rely on policy to increase.

For dealers, it is not that they have not thought about the way to save themselves. According to 51 Jun, most of the hot-selling brand dealers, including luxury brands such as Lexus and Mercedes-Benz, are becoming more and more transparent about their prices and charges. At the same time, online live broadcast, advertisement placement, and holiday marketing are also the same.

To put it bluntly, many dealers are now in a state of desperately ill and seeking medical treatment. But what the actual effect is, I believe that only the dealers know it in their own hearts.

If you are an ordinary consumer reading this article, congratulations, now is the best time to buy a car, which will be the best opportunity to buy a car in recent years.

But if you are an industry practitioner reading this article, then please think about how to stabilize yourself in the face of the tide of change in the times. After the big waves wash away the sand, the industry will present a new scene. Will you still be there? How will you exist?