Only one car was sold in a month, and the sales of parallel imported cars plummeted by 70%. Many car dealers in the bonded area closed their stores.
2024-08-13
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Sales have dropped sharply, car prices have dropped, and merchants have withdrawn... The once prosperous parallel imported car industry is facing huge challenges. Relevant data show that in the past five years, the sales volume of parallel imported cars in the country has dropped from 154,600 in 2019 to 39,300 in 2023. In Tianjin Port Free Trade Zone, the largest parallel imported car distribution center in the country, all second-tier car dealers in a car city have withdrawn.
Compared with ordinary imported cars, parallel imported cars have the advantage of filling the gaps in some domestic car models, but they are not authorized by brand car dealers, do not have their own repair and after-sales stations, and now face multiple pressures from internal and external factors.
Industry insiders believe that not only parallel imported cars, but also all imported cars and fuel vehicles are facing a shrinking situation. On the other hand, my country's new energy vehicles have risen strongly, and in July, the penetration rate exceeded 50%, officially surpassing fuel vehicles. The automobile industry is facing a major transformation and a major turning point. Experts believe that with the iteration of new energy technology, the space for fuel vehicles will be smaller in the future.
Pacific International Auto City 2nd Floor
A whole floor of car dealers closed down
The light was dim, there was no one, not even a single car. This was the scene that a reporter from Qilu Evening News and Qilu One Point saw on the second floor of Pacific International Auto City in Tianjin Free Trade Zone. All the parallel imported car dealers on this floor had withdrawn, and even the adjacent restaurant had closed down.
The so-called parallel imported cars refer to cars that are purchased from overseas markets by traders without the authorization of the brand manufacturers and then introduced into the Chinese market for sale. Xiu Xian, who has been in the industry for 11 years, made an analogy, "It's a bit like purchasing agents in the imported car industry."
As the largest distribution center for parallel imported cars in my country, Tianjin Port Free Trade Zone has gathered thousands of car dealers, and is regarded by many industry insiders as the "holy land for imported car transactions." According to Tianjin Customs, in the first 11 months of 2023, the import volume of parallel imported cars at Tianjin Port accounted for more than 80% of the total import volume in China.
But the Tianjin Port Free Trade Zone, which was once bustling with people, is now deserted.
According to data released by the Tianjin Parallel Import Automobile Circulation Association, a total of 161,800 parallel imported cars were sold nationwide in 2019. Four years later, in 2023, sales fell to 39,295 vehicles.
Recently, a reporter from Qilu Evening News and Qilu One Point came to Tianjin Port Free Trade Zone and visited several auto cities there and found that there were very few customers.
Salesperson Wang Dong (pseudonym) said that the people in the exhibition hall were basically all salespeople, and they could only receive a few waves of customers in a day.
On the second floor of Pacific International Auto City, the reporter saw a different scene. The entire second floor was dimly lit, empty of people and cars. The adjacent restaurant had also been closed.
Wang Dong estimated that at least one-fifth of the merchants had closed their stores. When he was browsing his WeChat Moments, he found that some of his colleagues had gone to Dalian to sell sea cucumbers, some to sell insurance, and some even to sell buildings.
Warehouses are also in a slump. The head of a warehouse said that with the decline in the import and sales of parallel cars, the storage space that was previously in short supply has also begun to drop in price. "It used to cost 15 yuan a day to store a car, but now it's 10 yuan." Despite this, this warehouse, which can park thousands of cars, now has about 300 parking spaces waiting to be filled.
No one is interested even after the price is reduced by 700,000
Since arriving in Tianjin Port Free Trade Zone in 2013, Xiuxian has developed from several small exhibition halls to an exhibition hall on the first and second floors, and now only has an exhibition hall on the second floor.
At its peak, the company had hundreds of sales staff, but now the number has been reduced to more than 20.
Some time ago, Xiuxian complained to a friend who was engaged in the wholesale of parallel imported cars that business was not good recently. Unexpectedly, the friend said that he had wholesaled one car in July. "He is engaged in wholesale!"
In order to sell cars, many businesses have started to reduce prices, but the effect is not ideal. Wang Dong said that his company had a car priced at 2.9 million last year, and this year the price was reduced to 2.2 million, but still no one was interested.
Xiuxian's company also had a similar situation. There was a batch of cars imported in November 2021, totaling more than 40 cars. After being in stock for nearly two years, they began to be sold in September last year, and the last car was not sold until August 6 this year. Except for the first car sold at a price 10,000 yuan higher than the cost price, the rest of the cars were sold at a loss. "The last car lost the most, 210,000 yuan." Xiuxian said that if it was not sold, the losses would only increase.
However, this is not the case for all models. Xiuxian said that in the past few years, parallel imported cars were indeed easy to sell and had high net profits. Although the profits are thin now, at least her company is profitable as a whole, otherwise she would not have persisted.
There is also a saying in the parallel imported car industry that "September is golden and October is silver", and the period from September to the Chinese New Year every year is the peak season.
Wang Dong said that at his peak, he could buy a house in his hometown in Northeast China after selling a car. Last year, his income was more than 300,000 yuan, but so far this year, he has only made 50,000 yuan. Facing the upcoming "golden September and silver October", Wang Dong did not show much confidence.
Just choose the right one, not the expensive one
Cui Dongshu, secretary general of the National Passenger Car Market Information Joint Conference, said that not only parallel imported cars, but the entire imported car industry is now in a state of drastic contraction. "The main reason is that demand is not strong and consumption is downgraded."
On August 6, the China Automobile Dealers Association released the situation of China's imported automobile market in the first half of the year. The data showed that from January to June 2024, my country imported a total of 332,000 vehicles, a year-on-year decrease of 4.1%; the import value was 132.35 billion yuan, a year-on-year decrease of 11.8%.
Another data shows that in July this year, the monthly penetration rate of new energy vehicles in my country exceeded 50%, officially surpassing fuel vehicles. This is a historic moment for the Chinese auto industry.
The China Automobile Dealers Association said that the rise of domestic cars and the accelerated localization of international brands have led to a continued downturn in my country's automobile imports in recent years. After four consecutive years of decline in automobile imports, "destocking" will still be the main task in 2024.
In fact, it is not just the imported car industry. From 2018 to 2020, the development of my country's automobile industry was affected by multiple factors such as economic structural adjustment, public health events and the implementation of the "National VI" emission standards, and automobile production and sales continued to decline. It was not until the second half of 2020 that my country's passenger car market ushered in a recovery under policy encouragement.
Compared with ordinary imported cars, parallel imported cars have the advantage of filling the gaps in some domestic car models, but in recent years, the number of featured products has decreased, vehicle costs have risen, exchange rates have become higher, and because they are not authorized by brand manufacturers and do not have their own after-sales maintenance stations, many consumers are discouraged.
Cui Dongshu believes that under such industry conditions, parallel imported cars are also facing regulatory pressure from the switch from National V to National VI emission standards. "The road ahead will be difficult."
In addition to the above factors, Xiu Xian believes that the sluggishness of the parallel imported car industry is also affected by the saturation of domestic automobiles and the change in Chinese people's consumption concepts.
Xiuxian has a client in Guangdong who bought an imported car worth 1.7 million yuan from her. Some time ago, the client test-drove a domestic electric car and found that it was spacious and could carry many people, and had complete functions, and could even sing karaoke in the car. "He decisively sold the imported fuel car worth 1.7 million yuan and bought this domestic electric car worth hundreds of thousands of yuan."
This incident made Xiuxian feel that more and more people no longer care about face. Compared with the previous concept of "I drive a luxury car and I have money", more and more people now tend to pursue comfort.
Xiu Xian is live streaming
Seeking transformation amid depression
Although many people have left this industry, there are still many people sticking to it.
Xiu Xian said that many car dealers have been in the industry for many years and are now entering middle age. It is more difficult to start over at this age, so it is better for them to delve deeper into the industry they are familiar with.
In 2020, Xiuxian started to engage in self-media, trying to sell cars through live broadcasts and short videos. Not long after, a customer in the United States placed an order online. "This customer is Chinese. He bought a car for his child in Xi'an. After the online communication and payment, his child came to pick up the car."
Wang Dong, who has been in the industry for three years, has also been committed to self-media. "Salespeople who don't actively transform and don't know how to livestream are slowly being eliminated."
In addition to adhering to the active transformation of car dealers, the government is also introducing relevant policies to promote the development of the industry.
Zhang Tingting, Secretary General of Tianjin Parallel Imported Automobile Circulation Association, once said that when the industry encountered obstacles in the National VI environmental protection policy, Tianjin Parallel Imported Automobile Circulation Association actively cooperated with the relevant departments of Tianjin Municipal Party Committee and Municipal Government to seek solutions from relevant national departments to solve the National VI problem. At the same time, in order to ensure the healthy development of the industry, the "Three Guarantees Service Specifications for Parallel Imported Automobiles" and "Parallel Imported Automobile Sales Contract (Standard Template)" were successively issued.
Zhang Tingting believes that when the supply of cars is insufficient, the sales price will naturally rebound appropriately. "What companies need to do now is to optimize all aspects of their operations, strengthen integrity and service, jointly create a good integrity order and environment in the parallel car market, promote their own brands, and make consumers willing and dare to buy parallel imported cars."
(Presented by Chen Chenyue from Qilu Evening News and Qilu One Point Client)
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