After BMW adjusted its prices, many consumers encountered difficulties in getting cars from dealers
2024-08-08
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As of June this year, the national passenger car inventory was 3.44 million vehicles, exceeding the same period in 2022 and 2023. The average number of days that inventory supports future sales is 56 days, which is further increased from 54 days in June 2023, and the structural pressure is relatively large. Visual China
Recently, the reporter visited several BMW 4S stores in Beijing belonging to different dealers and visited them as consumers. The picture shows the display cars in the Beijing Huadebao BMW 4S store. Wang Zhiyuan/Photo
"I think some auto 4S stores need to be cleaned up. Buying a car should be a happy thing, but now it's a mess. It's no use for me to complain to the BMW manufacturer. It takes too much energy to defend my rights every day, and I even feel that the delivery of the car is becoming a distant prospect." Recently, Guangzhou citizen Yang Liu told reporters about her experience - when the delivery date was approaching, she was told by the BMW 4S store that the new car could not be delivered on time.
In fact, the "difficulty in car delivery" problem encountered by Yang Liu is not an isolated case. Not long ago, rumors such as "BMW China withdraws from price war", "BMW price increases across the board", and "being asked to pay 30,000 yuan more when picking up the car" attracted people's attention. Some consumers reported that BMW 4S stores in many places across the country were unable to deliver cars on time or refused to deliver cars. The related topic once topped the Weibo hot search list.
The crisis of trust caused by delayed delivery
In early June this year, Yang Liu and his wife, who were buying a car for the first time, were carefully sorting out the matters needing attention in the car purchase contract at the Guangzhou Zhongsheng Zhibao BMW 4S store. "I heard that some dealers, in order to boost sales, induce consumers to sign contracts regardless of whether the cars can be delivered on time. Will we encounter a situation where there are no cars or the cars cannot be delivered before July 31? What should we do if this happens?" Yang Liu expressed her concerns to the sales staff in the store.
Liang Jun, the sales consultant who received the Yang Liu couple, said confidently: "We have verified that a batch of new cars will arrive at the store before the end of July. Unlike imported BMWs, domestically produced BMWs can be delivered on time by arranging cars within the group even if the store does not have them."
With Liang Jun's solemn assurance, Yang Liu dispelled his doubts and finally signed a BMW X1 purchase contract with Guangzhou Zhongsheng Zhiba BMW 4S store on June 27, which included terms such as "car delivery before July 31, 2024".
Later, Liang Jun said that what Yang Liu had signed was a "new car sales paper contract" and that the contract would be kept by the finance department. "Liang Jun said that he would send me a complete electronic contract the next day and that the electronic contract would prevail. But after the loan pre-approval was passed, the so-called electronic contract was still not sent to me," Yang Liu recalled.
Just when Yang Liu wanted to ask about the relevant situation of the electronic contract, on July 16, Liang Jun forwarded to Yang Liu a notice issued by Tang Jiahui, sales director of Guangzhou Zhongshengzhibao BMW 4S store: Starting from July 12, BMW has reduced production and emissions to maintain its product value, stopped all new car production in July, and temporarily suspended deliveries, giving priority to handling the inventory of each store. Please inform customers immediately that the arrival time of new cars will be delayed, and wait for the manufacturer to issue an announcement for details.
After receiving the news, Yang Liu communicated with Liang Jun and Tang Jiahui immediately, but only got the reply that "If you are willing to wait, the new car can be delivered to the store at the earliest by the end of September, and if it is slower, you have to wait until after October."
"I had already signed a contract with the 4S store before BMW introduced the 'production reduction and emission reduction' policy, and the 4S store should have delivered the car on time," Yang Liu said angrily. "Both the 4S store and the manufacturer should have delivered the car on time as agreed in the contract. Can BMW's temporary policy extend the delivery period at will? Where is the reputation and credibility of the BMW brand?"
In response to Yang Liu's feedback about "no electronic contract" and "delayed delivery", the reporter called the Guangzhou Zhongsheng Zhibao BMW 4S store. Tang Jiahui told the reporter that BMW headquarters did not approve the contract because there was no new car in July.
"At the same time, the sales consultant did not respond to this situation in a timely manner, which ultimately led to Ms. Yang not signing the electronic contract." Tang Jiahui said that since the contract was not signed, the company did not breach the contract, there was no "delayed delivery" and it did not need to bear any responsibility.
What made Yang Liu even more angry was that after the 4S store failed to deliver the car on time, Tang Jiahui said that what they had signed before was not a legally binding paper new car sales contract, but some agreements on car purchase and delivery. At the same time, the "internal transfer" backup plan that the 4S store had previously "patted its chest" to guarantee has now become a mirage. "Tang Jiahui said that the 4S store tried to transfer new cars from the group, but because the quotes from other stores were too high, it ultimately failed. Now, in addition to continuing to wait, the 4S store only offers two options: "convert to a current car" or "refund the deposit." Yang Liu told reporters.
Li Yiming, who lives in Nanchang, Jiangxi, also encountered a similar problem. She signed a contract to buy a BMW X3 with Nanchang Baocheng BMW 4S store on June 30, but has not received the car yet.
"We agreed to deliver the car in late July or early August, but the sales consultant later contacted me and said the price of the car had increased, so he refused to deliver the car," said Li Yiming. "The sales consultant said that if I paid the difference, I could get a car in stock, so I could get the car right away. I definitely couldn't accept such an unreasonable request, so I had no choice but to take legal action or get my deposit back."
In response to the recent "BMW 4S store refused to deliver the car" situation, BMW China responded: "We have noticed the relevant content and conducted a preliminary internal investigation. The cases involved are all individual cases, and the specific circumstances of each case are different. We are actively communicating with relevant dealers and urging BMW authorized dealers to comply with the "Automobile Sales Management Measures" and related laws and regulations and contractual agreements, safeguard consumer rights, and ensure that consumers get a satisfactory service experience."
Regarding Yang Liu and Li Yiming's car-buying experience, the reporter consulted Wang Kunlun, a lawyer at Hubei Zhenwu (Wuhan) Law Firm. He said that the behavior of the above-mentioned BMW dealers seriously violated the principles of honesty and trustworthiness in the Civil Code of the People's Republic of China and the Consumer Protection Law of the People's Republic of China, and should be condemned.
"However, such incidents cannot be generalized. If the consumer has paid a non-refundable deposit to the 4S store, the 4S store's breach of contract will be subject to the relevant provisions of the deposit penalty, and the store should generally return double the deposit to the consumer," Wang Kunlun analyzed.
"But currently in the domestic motor vehicle consumer market, consumers usually pay a refundable deposit. This kind of reservation usually has no legal binding force on both parties, and it is difficult for consumers to claim the 4S store's liability for breach of contract. This may be the reason why the 4S stores involved dare to raise prices, delay or refuse to deliver vehicles, and are fearless." Wang Kunlun added.
Who will reasonably “reduce the burden” for car dealers?
"Behind all the delays and refusal of delivery is a microcosm of BMW's declining sales and problems with its dealer distribution," said Sun Wei, an automotive industry analyst.
Statistics show that in the first half of this year, the Chinese market has become the market where BMW Group's sales have declined the most. In the first half of the year, BMW Group delivered 494,600 new vehicles in the Asian market, a year-on-year decline of 3.6%, of which 376,400 were delivered in the Chinese market, a year-on-year decline of 4.2%, while global sales increased by 2%.
In this context, is what happened to Yang Liu and Li Yiming a common phenomenon or an isolated case? As a consumer, the reporter visited several BMW 4S stores in Beijing belonging to different dealers to find out.
A sales consultant at Beijing Huadebao BMW 4S store told reporters: "When supply exceeds demand, the price is low, and when supply is less than demand, the price is high. Judging from the current market situation, the price of the BMW i3 will only go up and not down. If you order a BMW i3 now, you can pick up the car in about a week."
A sales consultant at Beijing Baoxing BMW 4S store said that the BMW X1 and X3 are available, but the iX3 electric car will not be available until September or October. At the same time, the above models will not require a "surcharge to pick up the car".
"I think it is understandable that BMW dealers are adjusting their sales strategies. But how to properly handle the signed car purchase contracts is the focus of dealers' attention," said Zhang Xiang, a researcher at the Automotive Industry Innovation Research Center of North China University of Technology. "If consumers are unable to pick up their cars on time and their legitimate rights and interests are damaged due to changes in market strategies or adjustments in the strategies of OEMs, then this behavior is obviously undesirable."
Zhang Xiang said frankly that the game between major car companies often leads to price fluctuations, but no matter how the market changes, companies should adhere to the principle of honest operation and respect the legitimate rights and interests of consumers. Only in this way can they continue to narrow the distance with consumers and accumulate good reputation and credibility.
Sun Wei holds the same view. He said: "Last year, two BMW executives in China, Gao Xiang and Shao Bin, were promoted. BMW Group wanted to show its long-term optimistic attitude towards the Chinese market and its determination to continue to attach great importance to the Chinese market. However, the recent behavior of some BMW dealers delaying or refusing to deliver cars has disappointed many consumers."
In addition to the service that was criticized by consumers, the BMW 530Li was singled out in this year's "3.15" evening party because of the abnormal noise of the drive shaft, becoming one of the focuses of this year's automobile rights protection incidents.
Complaint data from the consumer service protection platform Consumer Protection shows that as of the first half of 2024, there were 446 valid complaints related to the BMW brand, and the number of complaints has increased year by year, involving a total amount of up to 79.624 million yuan. Product quality issues and related after-sales service issues have become the focus of consumer complaints, accounting for 33.6%.
"Compared with other car-buying groups, consumers of luxury brands pay more attention to the brand's reputation, quality and service level." Sun Wei analyzed, "If consumers spend more money but do not enjoy 'excellent quality' products and 'time-saving and labor-saving' services, and instead have to communicate repeatedly or even defend their rights, then luxury brands like BMW will lose their price advantage and brand reputation that they have maintained for many years. Therefore, both BMW executives and dealers in China should make timely adjustments and sound the alarm."
In fact, due to the ongoing "price war" in the auto market, domestic auto dealers are currently facing great operating pressure. The "National Dealer Survival Status Survey in the First Half of 2024" released by the China Automobile Dealers Association shows that market competition is fierce, price wars are frequent in the auto market, and brand manufacturers and dealers compete for market share through price cuts and promotions to achieve sales targets. The strategy of "trading price for volume" has also forced OEMs and dealers to face the severe challenge of declining profits.
In May this year, the "Porsche dealers jointly boycotted car delivery" incident occurred in China. Reporters learned that due to high inventory, sluggish electric vehicle sales, and a sharp drop in terminal car prices, many Porsche dealers refused to deliver cars, demanded Porsche China to provide car delivery subsidies, and put forward requirements such as "replacing senior executives in China". Among them, three dealers, Xinfengtai, Baideli and Meidong Group, proposed that Porsche China should subsidize 1% to 4% of the gross profit of purchasing new cars.
The incident ended with Porsche China issuing a statement and the two sides shaking hands and making peace. On July 20, Porsche China suddenly announced a major personnel change. According to the arrangement of Porsche headquarters, Alexander Pollich will officially take office as President and CEO of Porsche China on September 1 this year, and will be fully responsible for the brand's business in mainland China, Hong Kong and Macau.
In fact, the "Porsche dealer boycott" is just a wave in the current automobile dealer system. According to a survey report by the China Automobile Dealers Association, the loss rate of dealers reached 43.5% in 2023, and the profit rate was only 37.6%; in the first half of this year, only 18.4% of dealers completed their sales tasks, 34.8% of dealers completed more than 80% of their tasks, and 13.5% of dealers completed less than 50%.
"Sales volume not meeting targets in the first half of the year" not only tightened dealers' cash flow, but also brought huge inventory pressure. Cui Dongshu, secretary general of the Passenger Car Market Information Joint Branch, said in a statement that as of June this year, the national passenger car inventory was 3.44 million vehicles, exceeding the same period in 2022 and 2023. The average number of days that inventory can support future sales is 56 days, which is further increased from 54 days in June 2023, and the structural pressure is relatively large.
Liu Yingzi, president of the All-China Federation of Industry and Commerce Automobile Dealers Chamber of Commerce, also said at the 2024 China Automobile Distribution Industry Conference: "Market competition based on price as the main means is still continuing, and the industry's excessive internal circulation is still intensifying. Under the influence of various factors such as inverted car prices and declining brand sales, the majority of auto dealers are facing tremendous pressure in business operations, and anxiety continues to spread."
In Zhang Xiang's view, the business environment for dealers is mainly affected by the relationship between supply and demand. In order to "reduce the burden" on dealers, OEMs should not only reduce inventory pressure, but also allocate marketable models to dealers, reasonably adjust supply and demand, and avoid sales inversion due to excessive inventory pressure on dealers.
"Although the challenges are considerable, auto dealers still have many opportunities for development. They should actively respond to market changes and challenges, deepen digital transformation, strengthen brand building and channel expansion, focus on the new energy vehicle market, optimize inventory management, improve service quality and customer experience, and strengthen talent training and team building," said Zhang Xiang. "Through these measures, auto dealers may be able to maintain their leading position in the fierce market competition, form a positive complementary relationship with OEMs, and achieve sustainable development."
(Yang Liu, Liang Jun, Tang Jiahui, and Li Yiming in this article are all pseudonyms)
China Youth Daily and China Youth Network reporter Wang Zhiyuan
(Source: China Youth Daily)
