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Interface News reporter | Zhou Shuqi

forBMWWhen the first-tier luxury brands withdraw from the industry price war, the people who may be most happy to see it include the used car dealers of super luxury brands.

Super luxury brand used car dealers who once scorned the price war among new cars may not have imagined that this rare market competition, which has lasted for 19 months, will completely overturn the golden age of high profits and high demand that they once enjoyed.

Million-dollar luxury cars that are independent of macroeconomic fluctuations are usually regarded as luxury goods. Not only are they immune to fluctuations in the overall market environment, they also often experience an inverted phenomenon of "high prices but no demand" in the second-hand market.

However, the drastic fluctuations in the economic environment and the decline in consumers' willingness to buy have made it difficult for brand power, once a valuable tool for preserving value, to continue to be effective in the used car market.

Jiemian News visited several super luxury brand used car dealers and learned that in the past the profit of a super luxury brand used car was hundreds of thousands of yuan, and the gross profit margin remained at 8% to 10%, but now this figure has dropped to 3%.

Luo Lei, assistant to the president of the China Automobile Dealers Association, shared a set of data at the recent China Used Car Conference. Ten years ago, only 1% of used car dealers were losing money. By 2022, the loss rate reached 82%, and the situation this year may be even worse.

The principle of "not selling cars below the purchase price" that used car dealers believe in has been broken. In the past, super luxury car brands could extend the inventory cycle to up to 90 days, waiting for high-priced buyers, but now they can't keep the price for two weeks, and 30 days is the warning line for losses.

When the market price is at the topRolls-Royce CullinanThey also began to reduce the price of cars by 1 million yuan. Second-hand car dealers of super luxury brands were forced to re-examine their market strategies and explore new ways to survive.

On the second floor of the underground parking lot of a shopping mall on Wuzhong Road in Shanghai, the nearly 10,000 square meters of open space is filled withPorsche、Rolls-Royce、LamborghiniThese luxury brand second-hand cars, which are still valuable, should have appeared in elegantly decorated showrooms, but now they are crowded in simple underground parking lots, waiting for consumers to come.

Wang Liang is a super luxury brand second-hand car operator who has been in business for more than 10 years. Last year, he moved his store, which had been running for several years, from Jinshajiang Road to here. One of the reasons was to save more rent. In 2023, Wang Liang lost three to four million yuan.

He recalled to Jiemian News that the market situation took a sharp turn since September last year. The price war of new cars spread toBenz, BMW and other first-tier luxury car brands, which directly led to a sharp drop in used car prices.

According to data released by market consulting company Jie Lan Road, compared with the guide price, the currentBMW 7 SeriesandAudi A8LThe price of conventionally resistant models has dropped by 24%; the discount rate of Porsche Panamera is 14%, and the terminal price is less than 1 million yuan.

The main reason why major dealers have launched unprecedented discounts is that there is a significant oversupply in the market.According to data from May 2024 provided by Li Yanwei, a member of the Expert Committee of the China Automobile Dealers Association, almost all super luxury car brands experienced a double-digit year-on-year decline in sales in the Chinese market.

The traditionally stable value retention of used luxury cars has also dropped significantly. According to a report by the China Automobile Dealers Association,Mercedes-Benz G-ClassThe three-year value retention rate of this model was as high as 108.57% in the first half of last year, which was a "inverted" price for used cars. However, this year it has fallen by nearly 20 percentage points year-on-year.

Luo Lei pointed out in an interview with Jiemian News that although the transaction volume of luxury cars priced above 300,000 yuan still maintained a year-on-year growth of 3%, the transaction participants failed to profit from the growth. The sharp increase in second-hand car practitioners and the lack of effective market demand have caused the second-hand car market to be "swept" by price wars, and consumers are more cautious.

What is even more worrying for super luxury brand used car dealers is that customers who buy luxury cars seem to have "disappeared".

A merchant at Shanghai M8 Luxury Car Trading Center revealed to Jiemian News that the frequency of customers' purchases has dropped from two or three cars a year to once a year. The number of visits to stores by self-media influencers and medical beauty practitioners, who were still enthusiastic about buying cars and shooting videos last year, has dropped significantly this year.

likeSupercarThere are also fewer young users of antique cars. Wang Liang noticed thatFerrari、McLarenThe prices of supercar brands such as the Benz and Lamborghini have dropped most significantly in the used car market. The main target audience of these models is the "rich second generation" with a wealthy family. Once their parents' business operations encounter risks, the funds for replacing luxury cars will be greatly limited.

"Now, more often than not, it is the original customers who sell their cars to us."

The ever-changing second-hand car prices and the sluggish demand for super luxury cars have increased the anxiety of second-hand car dealers. Unlike small and medium-sized car dealers who can buy small cars at low prices, super luxury brand models have high initial investment costs and high capital utilization rates. Once the turnover is not smooth, it is easy to cause the risk of tight cash flow.

Li Ming, an investor of Shanghai Chemao Famous Car Club, often wakes up suddenly at 2 or 3 in the morning, worrying about the unsold models in the warehouse. He told Jiemian News that when the market was good, he and his team sold more than 100 cars a month, but now it is only half of that. He has been in a loss for half a year.

To mitigate the losses caused by the drastic price changes of new cars, Li Ming increased the inventory turnover rate: if the car cannot be sold within 15 days, the price will be immediately lowered; if it is still in stock after 45 days, it will be sold at cost or at a loss. In his opinion, only by selling the car as soon as possible can the funds be recovered and the car that is easy to sell can be sold later.

Wang Liang’s average liquidation cycle is 60 days, and based on the fierce competition in the new energy vehicle market, used electric vehicles must be traded within 15 days.

But "quick in, quick out" is not an easy goal to achieve. In fact, the inventory pressure on used car dealers has increased instead of decreased. According to data from the Automobile Circulation Association, the average inventory cycle of the used car industry in 2022 was 37 to 51 days, and in May 2024 it was extended to 55 days.

Traditionally, the off-season for used car sales is in June, but the China Automobile Dealers Association estimates that this year it has been brought forward to mid-to-late May. Jiemian News has noticed from several super luxury brand used car sales centers that these stores have almost no natural traffic of consumers coming to see the cars. Sales are busy with online live broadcasts in order to attract more potential buyers.

Due to the sluggish market, super luxury brand used car dealers try to avoid buying cars as much as possible, and only carefully select models with relatively strong risk resistance, or increase the consignment ratio to work together to resist external crises.

Wang Liang's active car purchases have dropped sharply to about 10 per month, and are limited to high-cost-performance super luxury second-hand cars with relatively cheap prices, high-end configurations and relatively low mileage. Considering the rapid depreciation of new cars within three years, this year he almost stopped buying models launched after 2022.

“Luxury cars used to be likeCayenneAs long as the mileage is normal, I will buy the black exterior which is not easy to sell. Now I look at cars with the attitude of not buying any, so I will only buy cars with a mileage of 10,000 to 20,000 kilometers and popular interior and exterior colors. "

In order to ensure a continuous and sufficient supply of vehicles, Wang Liang began to switch to a consignment model in the second half of last year. He broadened the vehicle source channel by introducing small and medium-sized car dealers, scalpers, and direct customers who were interested in selling vehicles, and earned commissions by selling vehicles as an intermediary.

This model helps used car dealers expand their business while reducing operating risks and capital investment. On the other hand, small car dealers and individual sellers who are not good at corporate operations and financial analysis can also use the traffic of large platforms to more effectively bring cars to market.

Cooperation is becoming a survival strategy for super luxury brand second-hand car dealers to tide over the difficulties. Li Ming closed the two-story showroom store and moved to a shopping mall parking lot on Wuzhong Road. He and four other second-hand car dealers jointly established the Chemao Famous Car Collection platform, jointly renting venues and jointly selling.

"With the five companies joining forces, the number of cars will increase and the customer base will be gradually expanded." The Chemao platform did not rush into adding more cars, but rather cautiously believed that no car model is immune to the impact of market fluctuations.

The merchants in the M8 Luxury Car Trading Center are among the few luxury brand second-hand car dealers that have increased their car purchase ratio.The company believes that the price of super luxury used cars has fallen to a historical low and is expected to gradually rebound in the near future.。

This store is large in size and specializes in a small number of top-of-the-line models with new car prices ranging from 2 million to 6 million yuan. The market for these models is relatively stable and is less affected by market fluctuations. It is reported that the store's average monthly transaction volume is 70 to 80 vehicles.

Unlike the cooling sales of super luxury brands, domestic brands’ new energy models are performing strongly. The introduction of cutting-edge technologies such as the three-electric system, intelligent driving and intelligent cockpit is reshaping the traditional control and performance attributes, making the former cutting-edge automotive industry products no longer sexy.

Wang Liang revealed to Jiemian News that models priced above 600,000 yuan have been significantly impacted by new energy vehicles.NIOHigh-end electric car brands such as Porsche andLand Rover, becoming a new “face” demand for consumers.

But when his peers were considering switching to electric used cars, Wang Liang chose to stabilize his existing user base. He believed that the actual demand in the used car market had not yet fully exploded. Once the price of new cars stabilized and the era of "equal rights for oil and electricity" arrived, consumers would vote for the leading used car platforms with a long history.

"Strengthening the operation of online self-media and offline customer circles is the unchanging basis for steady progress during the industry adjustment period."

Luo Lei pointed out that the overall used car industry is transitioning from extensive development in the past to refined division of labor. During the industry reshuffle period, practitioners should strengthen their own management capabilities, cultivate their internal strength, and develop towards scale, standardization and branding.

(At the request of the interviewees, Li Ming and Wang Liang are pseudonyms.)