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"Hello, ma'am. The i3 you liked may increase in price later. Would you like to come and take a look at the car soon?"

In BeijingBMWIn the exhibition hall, the phone rang one after another, but unlike previous promotional recommendations, salesman Xiao Wang (pseudonym) has quietly switched to a new set of marketing rhetoric.

In fact, this seemingly abrupt change is actually due to a recent "big news" in the automotive industry. Recently, in response to the rumor that "BMW China will withdraw from the price war", BMW China clearly responded thatIn the second half of the year, BMW will focus on business quality in the Chinese market and support dealers to make steady progress.

A stone stirs up a thousand waves. The follow-up about BBA (BMW,Benz、Audi) will take the lead in withdrawing from the price war, and the rumor spread quickly inside and outside the circle, and it became a hot search topic for a while.

Indeed, giving up short-term profits and pursuing market share seems to be the recognized survival rule in the current domestic auto market. But for the top luxury brands represented by BBA, survival is definitely not the primary issue. They seem to be more concerned about other things, such as the operating difficulties of their dealers.

Under the price war, dealers are the first to "hit the bottom"

"I never thought this year would be so difficult. With this wave of policies, I can finally breathe a sigh of relief."

Since the beginning of July, BMW dealers across the country have received a number of substantial subsidy reduction policies from the manufacturer. Li Ping (pseudonym), a BMW dealer in East China, told Titanium Media App that starting from the second half of the year, BMW China and BMW Brilliance have cancelled the sales target assessment for dealers in East China to reduce the existing inventory pressure.

According to information collected by Titanium Media App, BMW dealers in many places across the country, including Beijing, Shenzhen, Chongqing, and Suzhou, have begun to reduce new car discounts to varying degrees.

The one that once became a hot topic because of its "fracture price"BMW i3For example, according to Xiao Wang's introduction to Titanium Media App, the bare car price of BMW i3 was about 185,000 yuan last month, and the final landing price was less than 200,000 yuan. At present, the bare car price of the car has been adjusted back to about 206,000 yuan, which is higher than the previous landing price of a new car.

In fact, compared with the gradual decline of joint venture brands in the past two years, in the public's perception, luxury brands, especially first-tier luxury brands, should be doing well.

But the reality is beyond many people's expectations. Li Ping told Titanium Media App that this year's market is like a balance that could tip over at any time. He said frankly: "It may be hard for you to imagine that one day even BMW will not make money. The BMW i3, which is priced at 180,000 yuan, may lose tens of thousands of yuan if it is sold. But if it is not sold, the inventory will only cause more trouble."

I still remember that at this time last year, many dealers lamented that the era of "making money while lying down" was gone. But this year, it seems that it is not so easy to make money even if you "kneel down".

At the end of June last year, the huge group with the title of "King of 4S Stores" "collapsed" and shocked the industry. A year later, another traditional auto dealer giant, Guanghui Auto, is also going to withdraw from the A-share market. In addition, the collapse of Guangdong Yongao Group at the beginning of the year and the recent financial crisis of Yancheng's well-known auto dealer Senfeng Group.

All these things seem to point to the same fact: after a price war that has lasted for nearly a year and a half, the dealer system of traditional car companies has already "bottomed out".

In fact, under the influence of the price war, since last year, there have been frequent reports that some auto dealers have had to actively or passively withdraw from the network, shut down or change their car brand operations. According to the China Passenger Car Association, about 1,500-2,000 auto dealers will withdraw from the network in 2023. In addition, more than 70% of dealers failed to meet their annual task targets, and the loss ratio accounted for 43.5%.

This year, perhaps Guanghui Auto's experience is a microcosm of the current survival status of traditional dealers. According to the latest statistics from the Circulation Association, in June this year, China's auto dealer inventory warning index was 62.3%, up 8.3 percentage points year-on-year and 4.1 percentage points month-on-month.

This is the second time this year that the inventory warning index has exceeded 60%.

Industry insiders pointed out that for auto dealers, the 50% inventory index is actually a line of prosperity and decline, and the inventory-to-sales ratio is relatively balanced at around 1:1.5. If the index exceeds 60%, it is very likely that the inventory-to-sales ratio has reached 1:3, which can be imagined. The inventory pressure on dealers can be imagined.

In the past few decades, in order to compete for relatively scarce car sources, car companies have already established a strong position over dealers. The reality is that when new car prices continue to fall, car dealers are the first to bear the brunt.

In this regard, Cui Dongshu, secretary general of the National Passenger Car Market Information Joint Conference, said that the industry's destocking characteristics became increasingly obvious in June, and the current structural adjustment pressure was transmitted faster from the OEMs to the channel end, and dealers lacked confidence in continuing operations. Facts have proved that the collapse of the brand price system caused by the sharp price cuts will eventually transmit pressure to the dealer level.

As the last outlet for the entire auto market chain to the consumer end, dealers are under multiple pressures from OEMs' pursuit of high sales, frequent price wars, and premature release of consumer demand. Their high inventory levels and low profitability have become their main operational challenges at this stage.

In fact, in addition to the inventory difficulties themselves, there is also a crisis in the entire industry, especially the turmoil in the dealer system.

While the outside world is still lamenting BMW's determination to withdraw from the price war, the behavior of some BMW 4S stores "adding price before delivering cars" has become a hot topic again. It can only be said that people's true nature is revealed under heavy pressure, and the controversy over dealers has once again been put on the stage.

It is not difficult to see that the current predicament of the traditional dealer system, or 4S stores, is indeed closely related to the "price war" that has been going on throughout the year. But the deeper reason is that the rapid rise of new energy vehicles and the introduction of the direct sales model have made traditional automobile 4S stores seem to be "no longer needed."

Channel pressure relief is imminent

But then again, can the dealer system that has dominated the Chinese market for decades really lose its value so easily?

The automobile industry has always followed the principle of determining sales based on production, and using prices and promotions to adjust downstream demand elasticity. This approach can maximize profits and minimize risks for OEMs. When there is a contradiction between supply and demand, 4S stores serve as the "reservoir" for adjusting production capacity.

However, everyone knows that water will overflow when it is full. When the reservoir reaches its limit, the person who needs to worry next is often not the "pool" itself.

July 20,PorscheThe headquarters officially announced the latest personnel changes: Alexander Pollich will officially replace Michael Kirsch as CEO of Porsche Mainland China, Hong Kong and Macau on September 1, and Kirsch will be transferred to the group headquarters.

This also seems to indicate that after months of tug-of-war, Porsche's Chinese dealers have won the first battle in this "forcing the palace" drama.

The root cause of this turmoil is that Porsche China chose to push inventory to dealers in order to curb the downward trend in sales and performance, and threw the pressure on the latter. Coupled with the subsequent "cold treatment", it has invisibly triggered a strong backlash from the entire dealer system.

Seeing that the incident was getting bigger and bigger, Porsche had no choice but to make concessions. Many industry insiders believe that this personnel turmoil is Porsche's "explanation" to Chinese dealers. Faced with the collective protest of dealers, even Porsche can only choose to try its best to take care of the sentiment of the Chinese auto market.

In fact, the logic behind this is easy to understand, because the dealer system accumulated over the years is actually the lifeblood of vehicle sales for most traditional automakers.

Although the penetration rate of new energy vehicles is increasing at an alarming rate year by year, fuel vehicles still occupy a larger market share in terms of overall ownership. According to Ouyang Minggao, an academician of the Chinese Academy of Sciences and vice chairman of the China Electric Vehicle 100 Association, the new energy revolution will usher in an explosive period in 2030, when the ownership of new energy vehicles will reach tens of millions and the market share will reach 70%.

In other words, for a long time to come, the dealer system that mainly sells traditional fuel vehicles will still be the "lifeline" for many automakers to sell cars. Imagine if the dealers under the brand run away in large numbers, especially in the current market situation, it would be like cutting off one's own arm, and the sales system of the entire brand would suffer a serious blow.

Compared with the leading new energy brands that know how to create momentum, the voice of traditional brands has been declining. Fuel vehicles were not selling well in the first place, and now the channels are reduced, dealers have run away and defected, and even the original potential customers and old car owners have been poached. It is hard to imagine how they can deal with it in the future?

On the one hand, Porsche has to deal with the cruel reality of falling sales, and on the other hand, it has to resolve the public opinion crisis caused by the protest of dealers. Porsche, a luxury car brand that once thrived in China, is now in a dilemma and has finally remembered the truth that water can carry a boat but can also overturn it.

Obviously, domestic first-tier luxury brands such as BMW have sensed the crisis behind this incident.

“Make sure all partners can make enough money to survive into the future.”

This is the viewpoint put forward by Dai Hexuan, CEO of BMW Brilliance, in response to rumors of withdrawal from the price war. In his view, prices are determined by dealers as independent operating entities, and BMW will maintain intensive discussions with upstream and downstream partners to see how a sustainable business model should be carried out.

As for the terminal sales link, a Beijing dealer manager revealed to Titanium Media App that since July, the store has adjusted prices once or twice a week on average, and the price adjustment ranges for different configurations of models are also different. The store sales also check prices almost every day, and the prices of all car series have also increased.

On the same day, Ms. Yao (pseudonym), who came to the store to look at cars, also mentioned in a communication with Titanium Media App that she originally wanted to wait and see, but after hearing from the salesperson that BMW has been raising prices recently, she decided to come to the store to check the situation first. Unfortunately, after asking the salesperson, the store salesperson said that similar preferential prices could no longer be given.

Afterwards, Titanium Media App also made inquiries from multiple parties and learned that some of BMW's stores in first- and second-tier cities across the country have indeed seen an increase in customer traffic to varying degrees, but the actual conversion of order volume is still unknown.

In this regard, some industry experts said that although car companies cannot directly control terminal prices to avoid violating antitrust laws, BMW has actually achieved the effect of easing terminal pressure by adjusting its product supply structure and dealer sales targets.

Of course, this time, the three German automakers, Audi and Mercedes-Benz, which have always "advanced and retreated together", also responded to their old rivals' "grouping" with practical actions.

According to the information obtained by Titanium Media App, the price increase of Audi models in stores varies from several thousand to tens of thousands of yuan, depending on the different markets. According to sales in Beijing, the price adjustment of models in stores is around 10,000 yuan, and the prices of Audi models will continue to rise in the next period of time.

As for Mercedes-Benz, although the official has not made a clear "follow-up", a sales representative revealed to Titanium Media that some stores have already withdrawn price discounts in advance, and the next price increase is almost inevitable, but the magnitude may not be particularly large.

It is not difficult to find that behind the decision of the three BBAs is a deep reflection on the serious losses of stores and the damage to brand image caused by the price war. In fact, for luxury brands, the price war hurts not only dealers, but also the brand tone they are proud of.

In fact, at this point, whether it is luxury brands or joint venture car companies, which are in a more serious situation, it is time to re-examine this price war and whether it is worth continuing. Especially when it comes to the fragile nerves of dealers, every decision must be made with great caution.

“Quality Dealers” may become the new favorite of the industry

After all, if you stand in the perspective of a dealer, when you find that you are making less and less money from selling cars and your confidence in the manufacturer is gradually declining, if a new brand with leading sales and brand effect expresses an interest in recruiting you, would you be tempted?

For example,BYDAn olive branch extended to you. On June 18, BYD's Denza andEquation LeopardAuto brands have announced the launch of the first batch of channel investment promotion for the whole society, recruiting dealers to join. This also means that Denza and Fangchengbao will officially return to the dealer model.

Before BYD,AvitaIn May this year, it also announced that it would fully return to the dealer model. It is reported that Avita has basically converted its directly-operated stores into dealer stores, leaving only a small number of directly-operated stores in first-tier cities.

Earlier ones includeXpeng MotorsLast September, Xiaopeng Motors launched the "Jupiter Plan" to adjust the ratio of direct sales and authorized franchise channels. The core measure was to gradually replace the direct sales model with the dealer model. Later,NIOSub-brand Ledao also announced plans to open a dealer model.

In fact, all major automobile manufacturers understand that as a middleman for selling cars, many brands want to get rid of the business of "making a profit from the price difference". However, the initial move of many new brands to switch from a direct sales model to a dealer model has proved the "existence is reasonable" attribute of the dealer ecosystem.

When brand development requires wider market coverage, faster response mechanisms, and more diversified sales strategies, the role of channel agency system will become prominent.

In fact, all major automobile manufacturers understand that dealers are not only the most effective sales platform for automobile manufacturers to spread the influence of their brands and products and directly face users in different regions and regional markets, but also a buffer zone for automobile manufacturers to return funds and stabilize the sales system. They are also a protective umbrella when facing the market and resisting industry turmoil and shocks.

As more and more new energy brands open up their dealer models, dealers finally have a chance to catch their breath.

However, it must be said that although these companies have opened up the dealer model, the entry threshold is also increasing, and the concept of "high-quality dealers" has been mentioned many times this year.

Take Denza as an example. At the beginning of the recruitment, it gave relatively clear recruitment requirements: dealers must have a mature team; the location must be located in the first or second local automobile business district, with limited high-end luxury brands or mature 4S stores; and have sufficient funds for store establishment and working capital required for subsequent operations. In addition, Denza's products are basically in the 250,000-400,000 yuan range, so it can be said that it has set its sights on BBA dealers.

At this point, it is not difficult to understand why the three BBA companies reacted so strongly when they saw the Porsche case, and even withdrew from the price war to compete for market share. The reason is that in terms of "high-quality dealers", dealers who have long served first- and second-tier luxury brands are more likely to transform into the kind of channel dealers led by "user thinking" that new energy brands need.

How can I not be anxious when my precious baby is taken a fancy to by a little yellow-haired outsider?

Fortunately, there are some additional terms for the "high-quality dealers" required under the new model. Recently, with the launch of ID., Volkswagen Anhui, a gold-label company, has also stepped into the spotlight. During the communication session of the press conference, Yang Fang, CEO of Volkswagen (Anhui) Digital Sales Service Co., Ltd., told Titanium Media App: "Volkswagen Anhui's agency system is different from the traditional distribution model. Our prices, property rights, and all product inventory are here. We will manage a unified price across the country, which can better protect the rights and interests of consumers and the profits of dealers, rather than simply selling cars wholesale to dealers."

In fact, the implication is very clear, that is, the dealers under its control need to be "obedient". Coincidentally, Xiaopeng Motors has also previously merged the auto trade team of the direct sales system and the user development center team of the dealer system to implement unified management.

Earlier, efforts were made on both direct sales and distribution.Zero Run, and also integrated the original three sales departments into one "sales department" last month, and there is only one voice in decision-making. In addition, in Avita's channel system, dealers and direct stores have the same price, and the role of dealers is more like a franchise store, providing users with better test rides and other services.

In other words, although "high-quality dealers" can be sought after by new forces due to their good service system, they also have to pay the price of their "soul" and hand over user data and pricing power obediently, and just be an agent. This is undoubtedly a constraint for dealers who are accustomed to independent operation, which makes people hesitate.

But no matter what, judging from the recent channel adjustment rhythm of major automakers, the sales model combining direct sales and dealers is a new trend.