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Image source: Visual China

Blue Whale News, August 14 (Reporter Li Zhuoling)Recently, JaguarLand RoverThe high inventory coefficient has attracted attention.

According to the latest survey results of "Auto Dealer Inventory" in July 2024 released by the China Automobile Dealers Association, the inventory coefficient of 6 brands exceeded 2 months in July. Among them, Jaguar Land Rover has the highest inventory depth.

Blue Whale News learned from Jaguar Land Rover dealers in many places in Guangdong that due to the increase in terminal discounts, some dealers are experiencing a situation where "the more they sell, the more they lose money." One dealer said bluntly that "10 out of the 12 models in the store are sold at a loss." Other dealer stores that were once dubbed "the first authorized brand in western Guangdong" have switched to selling other brands and only retain after-sales service.

In fact, Jaguar Land Rover is not the only one that is caught in the dilemma of high terminal inventory and increasing dealer losses. These real difficulties are also sweeping many domestic joint ventures and multinational automakers that still mainly sell fuel vehicles. Data shows that in the first half of this year, only 27.3% of auto dealers achieved profits, compared with the profit ratio of 37.6% last year, the loss area has further expanded.

Dealers’ profit margins are being squeezed, and friction and bargaining with OEMs are also intensifying.PorscheIt was revealed that some Chinese dealers launched protests and boycotts, trying to "force the abdication" of Porsche's German headquarters; later, severalBeijing HyundaiThe news that dealers jointly requested to suspend car pick-ups spread like wildfire.

As a community of interests, automakers and dealers are in a relationship of "prosperity together, loss together". With the intensified competition in the auto market, it is a test for dealers including Jaguar Land Rover and other brands to solve the problem of survival and how automakers can overcome the painful period of transformation.

New models have hundreds of thousands of discounts as soon as they are launched

Behind the high inventory coefficient that has attracted much attention, some Jaguar Land Rover dealers have reported that they are facing a situation where "terminal discounts are increasing and selling cars is losing more and more money."

Recently, Blue Whale News consulted Jaguar Land Rover dealerships in Guangzhou, Zhuhai and other places in Guangdong as a consumer. Many salesmen said that there are great discounts and high cost-effectiveness at present, and it is a good time to buy.

Take the 25th Discovery Sport, which was just launched on July 15 this year, as an example. The starting price of the car is 388,300 yuan, but the current terminal quotation has a discount of more than 100,000 yuan.

"This car can be purchased for 238,000 yuan, including purchase tax and insurance, but it will be more expensive if you buy it on mortgage or pay in full," said a salesperson at a Jaguar Land Rover 4S store in Guangzhou. Another salesperson at a Zhuhai store also said that the car currently has a 140,000 yuan discount at the terminal, and the high-end version can be purchased for more than 260,000 yuan.

With such a big discount on the terminal, will it be a loss?

"We have been losing money all the time, but the price has dropped from 80,000 to 90,000 yuan to 130,000 to 150,000 yuan per car." A Guangzhou Jaguar Land Rover dealer said frankly. He also said that many models in his store are selling at a loss. "Among our 12 models, except for (Land Rover)Range RoverandGuardIt is profitable, while the other 10 are all losing money.”

In fact, the phenomenon of dealers "moving forward with heavy burdens" is not unique to Jaguar Land Rover.

According to the latest survey results of "Auto Dealer Inventory" released by the aforementioned China Automobile Dealers Association, the comprehensive inventory coefficient of auto dealers in July was 1.50 (0.8-1.2 is a reasonable range), up 7.1% month-on-month, and the inventory level is at the warning line. It is estimated that the terminal sales of passenger cars in July were about 1.75 million vehicles, and the total inventory of auto dealers at the end of July was about 2.6 million vehicles, and the total inventory of channels increased.

Currently, high-end luxury, imported and joint venture brands are under great inventory pressure. Data shows that the inventory coefficient of high-end luxury & imported brands is 1.38, up 34.0% month-on-month; the inventory coefficient of joint venture brands is 1.63, up 14.8% month-on-month. Among them, the three brands with the highest inventory depth in July are: Jaguar Land Rover, Beijing Hyundai,Dongfeng Nissan。

Image source: China Automobile Dealers Association

"The uncertainty of the automobile market will increase in the future. Dealers should rationally estimate the actual market demand based on the actual situation. At the same time, they should increase the publicity of the 'old for new and scrap renewal policies', boost consumer confidence by strengthening services, put cost reduction and efficiency improvement first, and guard against operational risks." The China Automobile Dealers Association suggested.

Some stores have switched to selling other brands

Operating losses increased, and some dealers withdrew from the Internet. According to the data of China Automobile Dealers Association, in 2023, the top 100 dealers opened a total of 555 stores, of which new energy brands accounted for 60%, and the cooperation partners were mainlyBYDMainly domestic new energy brands such as etc.; at the same time, 333 stores were closed, most of which were mainstream joint venture brands.

Taking Jaguar Land Rover as an example, Blue Whale News found that there are currently no Jaguar Land Rover sales stores in some areas of Guangdong.

According to the official website, Jaguar and Land Rover brands have previously established channel networks in ten cities in Guangdong, including Guangzhou, Shenzhen, Dongguan, Huizhou, Shantou, Zhongshan and Zhuhai. However, dealers in Qingyuan and Zhanjiang currently only provide after-sales services.

It is reported that the dealer of Jaguar Land Rover in Qingyuan is Qingyuan Qingfeng Aoda Automobile Sales and Service Co., Ltd. According to the dealer profile, the company covers an area of ​​7,000 square meters, with a total investment of 30 million yuan. It is designed and built according to the latest global standards of Jaguar Land Rover. It is currently the largest and most luxurious automobile 4S store in Qingyuan. "It is a standard exhibition center integrating brand experience, model display, new car sales, after-sales service and Jaguar Land Rover used cars. The business scope covers the sales and service of Jaguar Land Rover's full range of products."

Its dealer in Zhanjiang is Zhanjiang Gangchang Automobile Service Co., Ltd. According to the introduction, the company is the first dealer in western Guangdong to obtain authorization from two British luxury car brands, Jaguar and Land Rover. It is a Jaguar Land Rover 4S store that integrates vehicle sales, spare parts, after-sales service and information feedback.

However, at present, both dealers show that they only provide after-sales service. Blue Whale News called the after-sales telephone numbers of both dealers, but no one answered the call. A person from another dealer said that Jaguar Land Rover is not sold now, only after-sales service is provided, and "other brands are now sold."

Regarding the high inventory coefficient, Blue Whale News also interviewed Jaguar Land Rover to ask whether the manufacturer will introduce any support measures to dealers in the future, but no response was received as of press time.

Models with near-zero profits are being eliminated

In fact, from the perspective of automobile companies, accelerating transformation, improving the overall competitiveness of their models, and assisting dealers in solving profit difficulties have become urgent issues.

Previously, Jaguar Land Rover was also exposed to be "cutting off its arms to survive". Global Network Technology reported on July 15 this year that Jaguar Land Rover's global CEO Adrian Mardell revealed in a public interview that in order to optimize the brand structure and improve overall profitability, the Jaguar brand is planning to significantly reduce and eliminate some existing models.

It is reported that the models included in the elimination list include Jaguar XE, XF,F-TYPE, E-PACE and I-PACE, mainly because the "profitability of these models has been close to zero."

For reference, according to Jaguar China's official website, its current full range of models includesJaguar F-PACE, E-PACE, XEL, XFL, F-TYPE, etc. If the above remarks are implemented, combined with the above list, many Jaguar models in China may be eliminated.

It is worth noting that at the beginning of 2021, Jaguar Land Rover announced that all Jaguar cars produced by the company will be electric vehicles starting from 2025. However, at present, as this time point approaches, Jaguar's models on sale are still mainly gasoline vehicles.

In order to accelerate the pace of transformation, Jaguar Land Rover intends to useCheryThe platform is used to build pure electric vehicles.

In June this year, it announced that it had signed a letter of intent for strategic cooperation with Chery Automobile, authorizing Chery Jaguar Land Rover to use the "Freelander" brand on its new electric vehicles.

Public information shows that Chery Jaguar Land Rover Automotive Co., Ltd. was established in November 2012, jointly funded by Chery Automobile Co., Ltd. and Jaguar Land Rover Automotive, with the shareholding ratio of the two parties being 50:50.

Specifically, Chery Jaguar Land Rover's new product line will adopt the reborn "Freelander" brand and Chery's pure electric platform, and will be produced at Chery Jaguar Land Rover's Changshu plant. The "Freelander" electric product line will be produced in parallel with Chery Jaguar Land Rover's existing product line.

Regarding the current progress of the Freelander electric brand and whether it will adopt independent sales channels in the future, Jaguar Land Rover told Blue Whale News that other than the information that has been released, other information will have to wait.