news

Blue Whale News, August 20 (Reporter Lu Pengpeng)Difficulty in picking up cars, wage arrears, store closures, on the verge of delisting... With a market value of over 100 billion at its peak and nearly 700 4S stores across the country, Guanghui Auto, the country's largest auto dealer, has reached its darkest moment.

It is difficult to pick up cars at Guanghui's 4S stores in many places

A store has 40 cars mortgaged to the bank

In recent days, consumers have revealed to Blue Whale News reporters that they are unable to pick up the cars they purchased at 4S stores under Guanghui Auto.

Ning Ning, a consumer from Jiangsu, told reporters: "At the end of June this year, I ordered a car from Xuzhou Mingzhibao Automobile Sales and Service Co., Ltd. under Guanghui.BMW X5, signed a formal sales contract, paid the deposit and down payment, completed the loan procedures, the car has arrived at the store, and it was originally agreed that the car would be delivered on June 20, but now two months have passed and I still can’t pick up the car. ”

It is worth noting that at the 4S store where this consumer bought the car, there were more than 40 cars that could not be picked up.

When asked about the specific reason why he couldn't pick up the car, Ning Ning said: "The new car certificate was mortgaged to the 4S store.BMWFinance, the store’s capital chain is tight now, the certificate of conformity cannot be redeemed, and the car cannot be taken away even if it is in the store.”

The reporter learned that the new vehicle certificate is the only legal document printed by the vehicle manufacturer and distributed with the vehicle to prove that the vehicle is qualified. It is equivalent to the "identity card" of the vehicle. Without the certificate, the vehicle cannot be registered or licensed.

In order to ease the financial pressure, some 4S stores will mortgage the certificate of conformity and spare keys as collateral for loans. It is worth noting that the certificate of conformity of a new car does not have property attributes and cannot be used as a pledge object, so this operation is not compliant.

According to Ning Ning, the store had a funding gap of more than 20 million yuan, and more than 40 cars were mortgaged for collateral.

A few days later, the reporter contacted Ning Ning again. He said: "Since the 4S store refused to deliver the car, consumers collectively went to the store to defend their rights and finally negotiated a solution. The 4S store had no choice but to use the copy of the certificate to apply for a temporary license plate before driving the car away. But it feels like the store is stalling for time, because the temporary license plate has a time limit. If the original certificate of compliance is not obtained, the car still cannot be driven on the road normally. I paid a down payment of 110,000 yuan for the car, and I have to start repaying the loan on the 8th of next month. It's really annoying to buy a car."

The reporter then called Xuzhou Mingzhibao, and the operator said that there had been some problems in the store recently, and many car models were out of stock, so it would take a long time to pick up the car, and it was recommended to go to another 4S store to buy it.

A consumer from Hefei told the reporter: "I am from a Guanghui store in Hefei.BenzThe car purchased from the 4S store isMercedes-Benz E300l. The contract originally stipulated that the car would be delivered on August 20, but the salesperson recently changed his mind and told me that they would give me a reply in September. This is just a reply, not the delivery of the car.

Another consumer from Liaoning said: "I am in the Zunrong Yifang Jaguar in Shenyang.Land RoverI bought a car from a store. The contract originally stipulated that I could pick up the car on August 20, but the salesperson said that I couldn’t pick it up and the certificate of conformity had not been redeemed.”

Blue Whale News reporter learned that there are many consumers with the same situation. In recent days, consumers in Jiangsu, Shandong, Guangdong, Liaoning, Anhui and other places have encountered difficulties in picking up cars, involving Mercedes-Benz, BMW,Volvo, Jaguar Land Rover and other brands.

It is worth noting that the 4S stores involved are all dealers of Guanghui Auto, and the difficulty in picking up cars mainly occurred in July and August. According to consumers, the responses given by the stores were mostly "financial bank problems, financial difficulties", etc., but the actual reason was that the car certificates were mortgaged.

Many stores owe employees wages

Manufacturers withdraw from the network and stop cooperation, and stores have no cars to sell

4S stores are facing operational difficulties and tight capital chains, which not only harms consumers but also employees.

A reporter from Blue Whale News learned that stores under Guanghui in many places, including Anhui, Zhejiang, Sichuan, Liaoning, Jiangxi, etc., have problems with wage arrears, affecting a wide range of areas.

Xingxing is a former Guanghui employee at a 4S store in Anhui. He revealed: "The store withheld my salary for two months, did not pay my social security in August, and has not paid my salary for June. Last year, I also helped the store advance 2,000 yuan. Although I went through the reimbursement process, I have not been paid. I have already resigned."

Another employee said: "2024 is already halfway through, and the store has only paid four months' salary. It's already August, and May's salary has not been paid yet."

Based on the information provided by the interviewees, the situations of wage arrears can be roughly divided into three types. Some stores withheld employees' wages for two or three months and only paid May or June wages in August. Some stores paid wages but the wages were 40% off. Some stores with poor performance simply did not pay wages. The operating conditions of different stores are different.

Blue Whale News reporters learned that although these stores that owed wages have not yet closed, some stores are unable to operate normally and are on the verge of closing.

Xiaorong is an employee of a 4S store under Guanghui in Jiangxi Province. According to her description, the store where she works has basically ceased operations. Although it has not closed, it is just an empty shell. The manufacturer has withdrawn from the network and stopped cooperation. The store can no longer get cars from the manufacturer, and the new cars in the store have also been transferred away by the group under various names.

In terms of salary, Xiaorong only received his June salary in August, but starting from July, these front-line sales people could only get a basic salary of more than 1,000 yuan because the store had no cars to sell.

"Now the store is not closed, they are just trying to keep the employees from leaving voluntarily. I have been working in this store for more than 10 years. If it is delayed for another half a year, the compensation will be based on the salary standard of more than 1,000 yuan, which will be meaningless to me." Xiaorong said.

A Guanghui employee of a Mercedes-Benz 4S store in Dezhou, Shandong revealed: "Mercedes-Benz is about to close. It's already August and I haven't received my salary for June and July. The store can only do maintenance now, and can't even do repairs. The engine oil is almost gone. The sales here haven't sold any cars for a month, and I don't know if this store will be sold..."

There are nearly 700 4S stores in China, with a peak market value of over 100 billion yuan

Now on the brink of delisting

Guanghui Auto, whose full name is Guanghui Automotive Service Group Co., Ltd., was established in 1999 and listed on the Shanghai Stock Exchange in November 2015. The actual controller of the company is Sun Guangxin, who was once known as the "richest man in Xinjiang". Guanghui Auto is mainly engaged in passenger car distribution services and passenger car leasing services. It was once one of the largest passenger car distribution and service groups in my country.

Guanghui Automobile was originallyToyota、Honda, GM and other mainstream mid-to-high-end brands. In 2016, it began to enter the luxury and super luxury market. For example, through the acquisition of Baosight Auto, Guanghui Auto became one of the largest dealers of BMW in China. After strengthening its luxury car business, Guanghui's brand influence and market share continued to increase.

As of December 31, 2023, the company has established a passenger car distribution network covering 28 provinces, autonomous regions and municipalities across the country, distributing more than 50 passenger car brands, operating 735 business outlets (including 695 4S stores), and deploying 245 ultra-luxury and luxury brand outlets.

However, in 2023, Guanghui Auto closed 50 4S stores. An insider revealed to the Blue Whale News reporter that the number of Guanghui stores closed may reach 300 in the future.

In terms of market value, at its peak, Guanghui Auto’s market value exceeded 100 billion yuan, but now it is less than 6.5 billion yuan and is on the verge of delisting.

On the evening of July 21, Guanghui Automobile issued an announcement stating that the company received a "Regulatory Work Letter on Matters Related to the Termination of Listing of the Company's Shares and Convertible Corporate Bonds" issued by the Shanghai Stock Exchange on July 21, 2024.

Guanghui Automobile announced that because its stock price closed below 1 yuan for 20 consecutive trading days from June 20, 2024 to July 17, 2024, the company's stock and convertible bonds have reached the conditions for delisting.

With a debt of nearly 70 billion, Guanghui Auto is on the verge of delisting:

Passively involved in price wars, luxury cars lose their profit advantage

As the largest automobile dealer in the country, why did Guanghui go from a market value of hundreds of billions to the brink of delisting?

According to Guanghui’s first quarter financial report for 2024, Guanghui Auto’s total liabilities were 69.254 billion yuan, and its cash on hand was 8.336 billion yuan.

On July 13, Guanghui Auto released its 2024 semi-annual performance forecast, with an expected loss of 583 million to 699 million yuan.

As for the reasons for the performance loss, Guanghui Auto stated that market consumption has downgraded, the industry competition landscape has intensified, and major automakers have launched price wars to grab market share, causing the company's new car sales volume and gross profit margin to decline compared with the same period last year.

It is worth noting that Guanghui Auto mentioned the term "price war" in many of its previous financial reports.

For example, in last year's annual report, Guanghui Auto mentioned that the main contradiction in the Chinese auto market in 2023 is reflected in overcapacity and insufficient demand. This contradiction has led to an imbalance in market supply and demand, which in turn has stimulated fierce competition for market share among manufacturers. In order to maintain or increase market share in the competition, automakers generally adopted a strategy of exchanging price for volume, triggering a comprehensive "price war".

This year,Porsche, Mercedes-Benz, BMW,AudiAs traditional luxury car brands slashed their prices, dealers' profit margins were further compressed, and financial and operational pressures increased. The luxury car profit advantage that Guanghui Auto once prided itself on was gradually eroded.

In addition to this reason, another problem facing Guanghui Auto is that its transformation is too late.

As a large-scale automobile dealership company in China, Guanghui used to rely mainly on joint venture brand authorized 4S stores for revenue. During the years when joint venture automobiles were profitable, the company's performance achieved rapid growth. However, in recent years, new energy vehicles have gradually become mainstream, and joint venture car sales have shrunk significantly. Since Guanghui Automobile's joint venture auto companies have a large proportion of mainstream brand outlets, its performance has naturally been affected.

From a peak market value of hundreds of billions to today's wage arrears, difficulty in picking up cars, store closures in many places, and on the verge of delisting, the current situation faced by Guanghui Auto is a microcosm of domestic auto dealers. If they do not actively embrace change, it may only be a matter of time before they are eliminated by the times even with a market value of hundreds of billions.