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(Original title: After withdrawing from the price war, BMW 4S stores in many parts of the country refused to deliver cars on a large scale)

Consumers are asked to pay an extra 30,000 yuan when picking up their cars? After BMW withdrew from the price war, many 4S stores across the country refused to deliver cars on a large scale.

BMW cars in 4S stores

BMW 4S stores across the country refuse to deliver cars

Recently, consumers in many parts of the country have revealed to Blue Whale reporters that they have encountered BMW's unfair terms. The BMW cars they had previously ordered were refused delivery by the 4S stores, and the salesperson temporarily demanded a price increase in order to pick up the car.

A consumer from Chongqing told the Blue Whale News reporter: "I signed a car purchase contract with Chongqing Baoyu Automobile Sales and Service (Group) Co., Ltd. on May 29. The car model is BMW i3, the price is 174,500 yuan, and I paid a deposit. At that time, the salesperson said there was no problem in picking up the car, but when it was time to pick up the car, the defendant asked for an additional 30,000 yuan."

The consumer also said: "I negotiated with the 4S store many times, and then the other party said that I could pick up the car by paying more than 10,000 yuan. Later, the manager said that there were no cars and production had been stopped. During the many days of negotiation and communication, the 4S store gave different statements every day and the responses were erratic."

Car purchase contract signed by consumers

A consumer from Zhengzhou told the Blue Whale News reporter: "I ordered a BMW i3 car from Zhengzhou Baolianxiang Automobile Sales and Service Co., Ltd. at the end of June. The contract has been signed, the deposit has been paid, and the loan plan has been approved. At that time, the account manager said that it would be delivered in four or five days. But when it was almost time for delivery, I was told that the price of the car would be 20,000 yuan higher and that I would be required to switch to a three-year interest-free financial plan, otherwise I would not be allowed to pick up the car."

In recent days, consumers in Chongqing, Zhengzhou, Shenzhen, Suzhou, Dongguan and other places have revealed this matter to the Blue Whale News reporter. Based on the information disclosed by consumers, BMW 4S stores in many places across the country have refused to deliver on a large scale. The car models are mainly concentrated in the i3, ix3 and 3 Series. Most consumers ordered the car in late May and June, and most of them were asked to temporarily increase the price by 30,000 yuan when they picked up the car in July.

It is worth noting that although some people have picked up cars among these models, the process of picking up the car is very difficult. Even if all the contract procedures are completed, consumers can only pick up the car after urging many times.

The reasons for refusing to deliver vary. For some consumers who have signed contracts and paid deposits, the stores responded that the car has been discontinued or production has been reduced. For those who have only paid deposits but not signed contracts, the stores responded with reasons such as "the headquarters did not approve it".

However, in the eyes of consumers, the reason why BMW refused to deliver the car was very simple, that is, the price of the car had increased, and the 4S store was unwilling to sell it at the low price when the car was ordered, so it temporarily increased the price.

Many consumers expressed that they could not accept this kind of behavior. Being refused delivery or being asked to increase the price temporarily after the contract has been signed and the deposit has been paid is tantamount to unfair terms.

The picture shows the exterior of the BMW 4S store. The picture and text are unrelated.

Lawyer: 4S shop behavior is illegal, consumers have the right to refuse

BMW's strategic layout changes have made consumers pay for it. The contract signed at the beginning has now become a piece of waste paper. The unilateral breach of contract by the 4S store has caused great harm to consumers.

In this regard, the Blue Whale News reporter consulted relevant lawyers. Chen Jinbo, a lawyer from Beijing Yingke (Guangzhou) Law Firm, said that the behavior of the 4S store is illegal. Consumers buying cars from 4S stores is a sales contract relationship. Consumers have signed a contract with the 4S store and paid a deposit. The sales contract is established and effective. The 4S store's refusal to deliver the car and the temporary increase in price for picking up the car violated the contract agreement and the relevant provisions of the Consumer Rights Protection Law, the Price Law, and the Civil Code.

According to Article 577 of the Civil Code, "If a party fails to perform its contractual obligations or performs its contractual obligations inconsistent with the agreement, it shall bear the liability for breach of contract such as continuing to perform, taking remedial measures or compensating for losses."

Lawyer Chen Jinbo reminds consumers that when faced with unreasonable practices such as charging a higher price to pick up a car, consumers have the right to refuse and try to resolve the issue through negotiation. If negotiation fails, they can file a complaint to the brand manufacturer's customer service hotline or 12345 or 12315. If the complaint fails, they can sue the 4S store to require it to fulfill its delivery obligations in accordance with the contract and assume the breach of contract liability for late delivery as stipulated in the contract; or they can sue the 4S store to terminate the contract and demand double compensation for the deposit on the grounds of unilateral breach of contract; or they can sue the 4S store to require it to bear the breach of contract liability as stipulated in the contract; consumers who have been forced to pay a higher price to pick up the car due to the situation can still sue for a refund of the increased price.

Further reading:

BBA car prices are falling back, some stores lose millions in one month: they can't bear it anymore

Yang Lin (pseudonym) was very glad that he picked up his car at the end of June.

"I bought a BMW 325 Li M sports package. At that time, the car price plus interest was 280,000 yuan. Now the price of this car has increased and it is about 300,000 yuan." Yang Lin told the reporter of "Daily Economic News" on July 18, "So I saved about 20,000 yuan."

The "price increase" Yang Lin mentioned is the recent price adjustment by BMW dealers. Compared with June, the prices of many BMW models have been adjusted. For example, the bare car price of the i3 model sold by some dealers in Beijing, Shanghai and Guangzhou was about 190,000 yuan after discount, but now it has risen to 210,000 yuan, and the discounts of other models have also been largely withdrawn.

"The official suggested retail prices of the models have not been adjusted. It is the BMW Group that has reduced the workload on our dealers. Therefore, dealers have made certain adjustments to the terminal selling prices of many models." A salesperson at a BMW 4S store in Shanghai told reporters on July 18.

At the same time, when the reporter visited Mercedes-Benz, Audi 4S stores and Volvo stores, the sales staff all said that there might be price adjustments in the future.

Why are luxury brands starting to "withdraw" from the price war? Will the price war in the luxury brand car market end here? What is the current situation of first-tier luxury brand dealers? With the above questions, the reporter visited the first-tier terminal market.

BBA price will fall back

Although BMW has announced a price increase, there are still many consumers coming to the store to look at cars. "At present, the prices of all BMW products have indeed increased, but we also have new financial policies. Overall, there will not be a big difference. Many consumers come to inquire and compare with the previous market conditions." The salesperson of the BMW 4S store said.

According to him, in June, when consumers bought BMW vehicles, the vehicle loans were generally financed with an annual interest rate of 4.8%. However, BMW has now launched a three-year interest-free policy. Taking the BMW 325 Li M sports package as an example, the overall price has increased by about 10,000 yuan compared with June. "Now the manufacturer has certain measures to ensure stable sales and try not to have outrageous prices." The salesperson of the BMW 4S store said that the terminal prices are relatively transparent now.

Many consumers came to see the cars in the BMW 4S store. Image source: Photo by Huang Xinxu, reporter of Meijing.com

It is worth noting that along with BMW's price adjustment, Mercedes-Benz and Audi, also luxury brands, seem to have started to take action.

"We haven't received any notice of price increase yet, but vehicle prices will not go down any further. We will also wait and see the situation of the Mercedes-Benz brand before deciding whether to follow suit in raising prices, but we expect the possibility of price increases to be relatively high," a salesperson at an Audi brand store in Shanghai told reporters.

Another Audi salesperson told reporters: "We have received information that the current preferential prices can basically only be maintained until the end of this week. There will be a 3% price increase next week. It is unclear what the price will be after that."

Audi brand sales staff said they have not received any price increase notice yet. Image source: Photo by Huang Xinxu, reporter of China Business Network

Mercedes-Benz sales staff revealed that there are not many vehicles in stock in the stores at present, which also means that the price in the terminal market has basically bottomed out. Manufacturers and dealers will have some price protection measures, and it is estimated that there will be some price adjustments at the end of the month.

Mercedes-Benz sales staff revealed that the store currently has few vehicles in stock. Image source: Photo by Huang Xinxu, a reporter from China Business News

"Once BBA starts raising prices, all brands will have to do the same. Although our store has not yet received any notification from the manufacturer about price increases, we believe that prices cannot continue to fall." Volvo sales staff hold the same attitude.

Some stores lost millions of yuan in a single month

"The prices in June will probably not go back to what they were in before. The previous price cuts were because everyone wanted to increase sales and get rebates from manufacturers, but the more they sold, the more they lost. After June, when dealers across the country held a meeting, they found that everyone's business was not good. Therefore, the manufacturer lowered the wholesale sales tasks for each store. This move is essentially to protect us, and it is also the key to ensuring market share and service levels." A salesperson at a 4S store of a certain brand mentioned above revealed that this terminal price increase was related to the manufacturer's policy to dealers.

According to the reporter, it is not just one brand of dealers that are under pressure at the terminal. "We lose 40,000 to 50,000 yuan for each car we sell. Under normal circumstances, our store loses 1 million to 2 million yuan a month. We can't bear it anymore. This is not just the case for our store. The profitability of many luxury brand dealers has been greatly challenged." A staff member of a luxury brand dealer in Shanghai revealed the current operating pressure.

"The GP1 (gross profit margin of sales) of luxury brands has dropped from -22.0% to -24.2%. Combined with the performance of the inventory coefficient, this shows the fierce competition among dealers in the luxury car market. Direct bidding between luxury brands and joint venture brands for mid-to-high-end products, coupled with the impact of high-end new energy products, has further reduced the profitability of the luxury brand market." Song Tao, assistant to the president of the China Automobile Dealers Association, said that the market competition faced by luxury brands is not easy.

China Automobile Dealers Inventory Warning Index Survey Chart Image Source: China Automobile Dealers Association

The latest issue of the "Vehicle Inventory Alert Index Survey of Chinese Auto Dealers" VIA (Vehicle Inventory Alert Index) released by the China Automobile Dealers Association can more intuitively reflect the operating pressure of dealers. Data show that the inventory warning index of Chinese auto dealers was 62.3% in June 2024, an increase of 8.3 percentage points year-on-year and 4.1 percentage points month-on-month. The inventory warning index is above the prosperity line, and the automobile distribution industry is in a recession. The above survey results show that more than 80% of auto dealers did not complete their sales tasks in the first half of 2024, and only 18.4% of dealers completed their tasks. At the same time, dealers have a lot of "price for volume" phenomena, new car prices have dropped sharply, and the gross profit of bare cars is low.

In fact, with the increasingly fierce price war in the auto market, many dealers have already faced survival crises. From the news of the bankruptcy of Zhejiang Zhongtong Group at the beginning of last year and the closure of all its 19 4S stores, to the delisting of Pangda Group in the middle of the year and the termination of the listing of its shares, to the serious operation crisis of Guangdong Yongao Investment Group Co., Ltd. at the beginning of this year, to the capital chain problems of Senfeng Group, the largest auto dealer in Yancheng, Jiangsu, which affected more than 60 4S stores of 25 brands, many dealer groups have faced operation crises.

As for the terminal market situation in the future, the China Automobile Dealers Association said that July is the traditional off-season for the auto market, and dealers believe that the overall market performance is the same as in June. With the adjustment of the price war, many automakers have reduced their discounts, consumers' willingness to buy has declined, and the wait-and-see mood has intensified. "At present, dealers are pessimistic and are more cautious about the auto market in the second half of the year. The overall auto market remains at last year's level, and terminal sales are facing downward pressure. Among them, 22% of dealers believe that it is basically the same, and 17.7% of dealers believe that the sales volume in the second half of the year will drop by more than 15%." The China Automobile Dealers Association revealed.

The China Automobile Dealers Association suggested that dealers should rationally estimate the actual market demand based on the actual situation as the uncertainty of the future automobile market increases. At the same time, they should increase the publicity of the "old-for-new and scrap-for-renew policy", boost consumer confidence by strengthening services, put cost reduction and efficiency increase first, and prevent business risks.

Song Tao said: "In 2024, the market pressure on luxury brands will continue to increase. It is recommended that manufacturers pay more attention to the operating conditions of dealers in 2024, maintain a unified front with dealers, and jointly cope with market pressure."