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The recent news about traditional domestic dealers is so overwhelming.

In the past two days, a luxury brand 4S store was complained by consumers about encountering unfair terms. Cars ordered in May and June were refused delivery, and salesmen demanded a price increase before the prospective car owners could pick up the car.

In the first half of the month, China Guanghui Auto, which ranked first in China's passenger car sales and second in revenue, had closed below 1 yuan for 20 consecutive trading days, triggering the delisting clause.

Since the end of June, the Guanghui Group and its core management team behind it have tried to win the A-share shell protection battle and escape by means of repurchase and share increase. However, the confidence of the capital market in it can not be said to be immeasurable, but it can also be said to be better than nothing.

This means that Guanghui has also followed in the footsteps of Pangda Auto, which was once hailed as the king of China's 4S stores 10 years ago. The group went bankrupt and reorganized in 2019, and was delisted in June 2023.

Guanghui Auto is probably the Nth large dealer that has been involved in delisting, bankruptcy, financial crisis, and running away in the past two years.

When the battle to maintain its listing status just began, an insider lamented: "Many people say that Guanghui Auto's fall was due to chaotic management and internal corruption. In fact, all the problems have always existed. Every dealer has them, not just Guanghui. When the market was good, all kinds of problems were not a problem. Now that dealers are not making money, even a small problem is a big problem. The auto market is in a price war every day, and Guanghui is being dragged to death."

As of December 31, 2023, Guanghui Auto operates 735 business outlets and nearly 700 4S stores nationwide. In the first quarter of this year, the company's total operating revenue was 27.79 billion yuan, and its net profit was 70.9405 million yuan - a meager profit that was ultimately defeated by the extremely competitive auto market and the capital market that loves to listen to stories.

In fact, there are many peers who are even more miserable than Guanghui Auto.

Data from 2023 shows that at least half of the dealers in the country are not making money, with only 27.3% of dealers achieving their annual sales targets, and 43.5% of dealers suffering losses.

Many car dealers lamented that it was not easy to survive this year: "Less losses are equivalent to making money. If others reduce prices, you have to follow suit, and you have to organize various activities to attract customers to the store."

Last spring,Dongfeng CitroenThe 120,000 yuan price tag once attracted many customers to 4S stores. After only half a year, the terminal prices of many joint venture brand 4S stores were 50-60% lower than the previous two years.

This year, 120,000Camry, 150,000Tiguan L, less than 100,000Sylphy...has become commonplace among the media and consumers.

Many dealers are still sitting on last year’s inventory of cars. In order to sell them as quickly as possible, they have no choice but to keep lowering prices or even pay the purchase tax to treat them as used cars.

Not long ago, a place in ShandongCheryThe dealer revealed that several local stores are under great inventory pressure. His store is already full of 300 cars, more than a quarter of which were bought last year, with the earliest cars arriving in August last year. If they are not sold, they will not be able to be registered.

In this regard, he could only frantically create small advertising invoice circles and seek out the media, hoping to sell the cars quickly through the latter's power, even if he had to lose a few thousand dollars on each car.

There are also inland dealers complaining that a new energy brand 4S store that they opened this year lost 3 million in three months.

Even if they work hard to achieve sales targets, many stores cannot get profit rebates because the premise is to reduce prices or even sell cars at a loss. Even if many dealers get rebates, they cannot make up for the loss of price reduction.

As the saying goes, the more they sell, the more they lose, and the more they lose, the more they sell. Dealers are gradually falling into a vicious circle.

year 2013,TeslaOpened the first store in Parkview Green Shopping Center in Beijing(Now closed)It is also the first directly-operated store of a car brand in China, 14 years after the birth of the first 4S store in China.

Tesla's direct sales model has opened a door and countless windows for China's new energy brands.

Five years later, new brands led by NIO, Xiaopeng and Li Auto decided to learn from Tesla in all aspects, skipping 4S stores, making and selling their own cars, and using their own directly-operated stores to diligently poach traditional dealers.

The golden age when joint ventures and foreign-funded enterprises and dealers could make money without doing anything is gone forever.

In just a few years, the profit margins of car dealers have been continuously compressed and the operating pressure has been increasing.

The ranking of the top 100 Chinese auto dealer groups released in 2018 showed that although the number of sales continued to grow, and revenue and sales barely outperformed the market, the number of outlets and total operating income of the top 100 declined, and the entire industry shifted from a rapid development stage to a structural adjustment. In terms of profitability, dealers' gross profit margin fell by 0.6% from 2017 to 8.5%; net profit margin fell by 0.5% to 1.6%; return on net assets fell by 4.7% to 9.4%; the total number of after-sales visits was also declining, and the customer churn rate increased significantly.

In terms of derivative businesses such as finance, there are also signs of slowing growth or a slight decline.

It was also from 2018 that China's dealers began to head towards the cliff.

First, the former "King of 4S" Pangda Group was involved in a series of events in 2018, including equity pledge, asset sales, wage arrears, and freezing of controlling shareholder's equity, which almost cut off its funds. Its sales volume dropped from fourth in the top 100 in 2017 to ninth.

In the same year, Guanghui Auto's performance began to peak and fall, and its capital chain was tight.

In September, founder Sun Guangxin went to Evergrande Group to visit Xu Jiayin. A few days later, Evergrande signed a strategic cooperation agreement with Guanghui. Evergrande acquired nearly 41% of Guanghui Group's equity for 14.49 billion yuan. The two sides carried out comprehensive strategic cooperation in the fields of automobile sales, energy, real estate, logistics, etc.

A luxury brand 4S store fully understood the wise saying "Never mess with a scholar" in 2019.

A female graduate student bought an SUV, but the engine had problems before it even left the store.

She spent 15 days patiently negotiating, but the brand 4S store kept asking for more. They changed from offering a refund to replacing the car, and finally only wanted to replace the engine, forcing the female car owner to cry and demand justice.

The relevant video went viral on the Internet, and the 4S store and a luxury brand quickly became the focus of public attention.

What's even worse is that the female car owner pointed out that during the process of purchasing the vehicle, the 4S store also required her to pay a "financial service fee" totaling more than 15,200 yuan, and the money was paid without her understanding the situation at all.

Since then, the unspoken rule of the entire automobile sales industry, "financial service fees", has been revealed. Even though the actual profit of this fee is not large, it has caused more and more prospective car owners to stay away from 4S stores.

There is no harm without comparison. The Wei, Xiao and Li direct stores of the same period specifically hit the pain points of traditional 4S stores - good environment, good service, good maintenance, and good peripheral products... They are so good that even Haidilao is ashamed, and so good that many new car owners feel a great sense of superiority.

especiallyNIONiuwu Experience Center is regarded as "their own living room" by many car owners and fans. They will come here with a few friends to have a drink of city special drink when they have nothing to do.

The new forces under the independent brands evenSAIC AudiThese new joint venture luxury brands are eager to follow suit.

In 2020, due to force majeure reasons that everyone understands, coupled with the comprehensive switch of China's automobile market to new energy, dealers have fully felt the double impact of channel changes and track switching.

In one year, 2,362 4S stores were shut down, withdrawn from the network, or closed down. The most famous one is Jiangsu Rundong Group, a former top 100 dealer specializing in luxury cars. Due to its reckless and rapid expansion, its capital chain broke and it went bankrupt and reorganized.

However, most people will feel the cold in 2023.

First, in February, Zhejiang Zhongtong, the largest automobile dealer in Taizhou, Zhejiang, closed 19 4S stores overnight.

This company mainly deals in Jaguar,Land Rover、Audi、Nissan、Ford、BuickHowever, the local tycoon who owns traditional brands such as SUV, SUV and Hongqi invested hundreds of millions of dollars in Aiways in early 2022 and took on the position of chairman.

Forehead……

Then in June, the huge group mentioned earlier was delisted.

From 2020 to the first half of this year, more than 10,000 small and medium-sized dealers or 4S stores have been closed, withdrawn from the network, or gone bankrupt.

In particular, nearly 2,000 4S stores in China have withdrawn from the network in the first half of this year. In just four and a half years, the number of auto dealerships has decreased by one-third compared to the peak period in 2018.

In January this year, Guangdong Yongao, a top 100 distributor founded in 1997, went bankrupt.Beijing Hyundai、Yueda Kia、Dongfeng Honda,Dongfeng Citroen,Benz、Volvo、Chevrolet、Lynk & Co、LotusandAsk the worldMore than 80 4S stores of multiple brands such as Toyota, Toyota and Honda have been closed.

On the night of the financial crisis, many tow trucks appeared in front of the gate of Liaobu Auto City in Dongguan, and the relevant banks sent tow trucks to tow away the commercial vehicles for property preservation.

The company's doors were closed, no one was at work, and no one answered the phone. Many suppliers, employees, and car owners cried out that they had been tricked by Yongao - a large number of employees were owed wages for several months, suppliers were owed money, and many users paid for their cars but were unable to pick them up.

They could only walk around the entrance of Yongao headquarters or the lobby on the first floor to discuss the matter.

At that time, an insider told the media: The company has started the risk of bankruptcy liquidation, and more than 80 car brand stores have problems. The Dongguan Nancheng store has 28 cars that have not been delivered, and 35 cars have not purchased purchase tax and are waiting for license plates.

There was also the Senfeng Group, which was the most famous company in Jiangsu not long ago. The sales consultant was still working hard to sell cars the day before, but the next day he suddenly found that the boss and the boss's wife had run away!

The employees were confused. Many of them treated the company as their own home and had even taken the initiative to lend money to their bosses, hoping to help each other through the difficult times.

In June this year, the inventory warning index of domestic dealers was 62.3%, and the absolute inventory was 2.5-3 months.

This means that for every new car sold, three are kept in stock - this is basically the same as the historical peak 10 years ago. The financial pressure can be imagined.

Many brands have realized that their dealers are heading toward or have already become part of bankruptcy, and they must find a way to help them, otherwise the cold will be passed directly to themselves.

last year end,a ToyotaIt was the first to cut production significantly: it was adjusted downward to 66,000 vehicles in December, to 60,000 vehicles in January this year, and to 38,000 vehicles in February.

Many Toyota dealers are happy to see this large-scale and long-term production cut. One dealer manager once said: "Yifeng is very rational to give up the sales target we set at the beginning and reduce production to help us solve the problem of inventory pressure."

Even if the inventory situation is temporarily alleviated, there are still 4S stores and many brands that trade price for volume, and their losses increase as they sell more.

The first to react were the BBAs. Even though they followed the domestic brands in slashing prices, they were able to maintain their prices in the first half of this year.

So starting from this month, BBA decided to reduce sales and prices to relieve pressure on themselves and dealers, which led to the "small" accident at the beginning of the article.

As far as we know, currentlyBMWThe price of the X series has been raised across the board, and the discount has been adjusted twice. Many BMW salesmen are relieved by the new move of the brand. After all, the losses in the first half of the year are obvious to the naked eye. It is better to adjust the price to recuperate and do a better job in operation and after-sales maintenance services.

Mercedes-Benz and Audi's 4S stores have also seen a phenomenon of shrinking terminal discounts, which should be a store behavior tacitly approved by the brands.

An Audi dealer revealed that current market conditions and terminal discounts are recorded on a weekly basis, and this week's discount policy may no longer be available next week.

Mercedes-Benz has not changed much at present - the starting price of a C-class car is still 225,000 yuan, about 110,000 yuan lower than the official guide price, and it can be negotiated in the store. However, some sales staff predict that "the lowest point has indeed passed, and the price should rise later."

BBA's leading example has also made dealers of all sizes of joint venture brands such as Toyota, Volkswagen, Honda, and Volvo eager to take action, and many stores have clarified their terminal recycling policies.

It’s just that the situations are different for different groups’ stores in different regions and for different car models.

Sometimes the price is pushed too low and a large amount of inventory is pressed down. Some dealers who want to survive but don't want to be put on the credit list can only use the trick of "son-in-law devouring his master" to force some brands that have no foresight.

It's May this year.PorscheChinese dealers are forcing the German headquarters to replace senior executives.

Even though Porsche's sales in China fell by 15% in 2023, becoming the only region in the global market where sales declined, Germany still insisted on its original sales strategy, insisted on holding back inventory, and insisted on letting Chinese dealers bear all the responsibilities.

This directly led to the Porsche China Dealer Conference at the beginning of this year, where three Chinese dealers, namely Xinfengtai, Baideli and Meidong Group, refused to accept the sales tasks assigned by Porsche.

In March, Jebsen Group’s 100th store in China, the Guangzhou Parc Plaza store, closed down and withdrew from the network.

In May, there were "60% off" and "440,000 yuan for a car".TaycanThe decline even exceeded 67% at one point, but it still did not sell well, forcing the Chinese side to tear its face off and turn the table over - demanding subsidies from the headquarters and firing the German executives who were not willing to eat meat, otherwise it would stop importing cars.

At the beginning, the German side was still arrogant and refused to negotiate. It was not until 65% of the Chinese dealers refused to take delivery of the cars that Porsche woke up from its dream. The global directors personally stepped in to appease the dealers and stated that they would definitely overcome the difficulties together with the dealers.

It is understood that their method is not much different from that of BBA, which is to strictly control dealer discounts, and all new and old car models must be increased in price.

In any case, in the first half of this year, Porsche's sales in the Chinese market have decreased by 33% year-on-year, and the head of Porsche China also suddenly left.

As we all know, the main reason why dealers are having a hard time is closely related to Chinese auto brands, especially the rapid rise of new energy and new power brands, which are not playing by the old routine.

Not only did they catch the joint ventures and imported brands off guard, they also "affected" the dealers of all sizes who had relied on the joint ventures for their survival for the past 25 years.

All Chinese people believe that the number of new energy vehicles in China will increase significantly in the next two years. Many large automakers can make their own batteries and extend their hands to the upstream industry - downstream sales channels. It is easy for them to be self-sufficient.

Nowadays, we see more and more new energy vehicle companies slowly returning to the dealer model.

Tengshi andEquation LeopardThey have successively announced the launch of the first batch of channel investment promotion for the whole society;AvitaThe vast majority of stores were transferred to dealers, leaving only a few directly-operated stores in first-tier cities.

Xpeng MotorsSince last year, the ratio of direct sales and authorized franchise has been adjusted; Weilai's sub-brand Ledao also plans to open a dealer model...

Even if more and more dealers and new energy brands start to run in both directions, those that are destined to fall will still fall, because the structure of China's auto dealership market has been heading in a direction that dealers cannot control.

So, don't hate Musk.

Although he brought the direct sales model, it was also his Tesla that took the lead in launching a price war at the beginning of this year.