At the beginning of this year, the automobile market opened a round of price war, so far the "war" has not subsided. In this context, the business difficulties of dealers are also increasing.
Recently, the China Automobile Circulation Association released the "Survey Report on the survival of National Automobile Dealers in the first half of 2023".The external environment of the automobile market is complicated, the recovery of automobile consumer demand is slow, the terminal transaction price continues to decline, and only 25% of dealers completed the half-year sales target in the first half of the year，although the large-scale new car price reduction has brought significant market increment, the increment is more from new energy vehicles, the survival pressure of traditional fuel vehicles is significant, and the operating pressure of automobile dealers has further intensified, resulting in the expansion of dealer losses.
"I was 14 years into the line, at that time the car market is still an incremental market, the impression is rarely lost money, even during this period of loss, after a period of time to earn back." Mr. Zhao, a dealer who has been in the industry for many years, told the China Times reporter that before 2018, they were basically making money, and at that time the joint venture brand sold the best, just like Tesla and BYD now, and even needed to raise the price to pick up the car. As for how much a car can earn, Mr. Zhao said: "This depends on the model, but in the absence of promotion, most brands will give a rebate of about 5 points."
In addition to selling cars, when the competition in the auto market is not fierce, after-sales service is also a tool for dealers to make money. Therefore, some dealers began to expand after tasting the sweetness. "When the market is good, you can earn back the principal of the store in about a year." Mr Zhao said.
Nearly a decade later, not only are rents rising, but labor costs are also rising, while the price of vehicles has been falling. Mr. Zhao joked to reporters: "Before, 10,000 yuan can hire two people, now a person is laborious." The return on car sales is still the same or even lower, but the day is getting harder."
With the increasing number of automobile brands, more and more 4S stores, coupled with the frequent launch of new products by major enterprises, resulting in fierce market competition. Especially after 2018, it is getting harder for dealers to survive. In addition, the rapid transformation of the electric automobile industry in recent years has had a great impact on the fuel vehicle market, and the largest dealer group in China has thus embarked on the road of delisting.
However, the Gargantuan fall is just a microcosm of the car dealership's struggle to survive. In early 2023, all 4S stores of Zhejiang Zhongtong Holding Group were closed; Chongqing's top five dealer group, Chongqing Longhua Industrial Group, also closed or transferred many of its stores.
In addition to bankruptcy, the wave of car price cuts in 2023 is making dealers miserable. According to incomplete statistics, in August alone, more than 10 companies announced price adjustments for their models, including Tesla, Great Wall Euler, SAIC Volkswagen, zero Run cars, etc., with a price cut ranging from 10,000 yuan to 70,000 yuan. However, the behavior of exchanging price for quantity did not reduce the pressure on dealers, but the loss was more serious.
According to the "report" released by the China Automobile Dealers Association, with the continuous decline of new car prices, dealers' losses have further expanded, reaching a high level in recent years. In the first half of the year, 50.3% of dealers were at a loss, while the proportion of profitable dealers was 35.2% and the proportion of flat dealers was 14.5%.
