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the development of the auto market this year has been in a state of ups and downs since the beginning of the year. new cars have been pouring into the market, public opinion has been heated, and the price war has intensified. everyone in this industry has deeply felt the pain of the industry's transformation, and no one can be immune.

although the data shows that the market penetration rate of new energy vehicles is rising steadily and the cumulative sales volume is not much different from previous years, fatigue, anxiety, confusion and incomprehension, all kinds of negative emotions run through it.

the intense competition in the market has indeed made consumers overwhelmed with choices, but they also try to buy their favorite cars with the least amount of money. but after eight months of fermentation, is this development trend healthy?

maybe. for some popular online companies, such a disorderly and chaotic market environment has become a natural helper for them to control consumers. in this stage where badmouthing joint ventures has become the norm and independent brands are killing each other, it is a good deal to quickly seize the market with the help of public opinion. even if it is operating at a loss, selling new cars like cabbages is not bad, if it can win people's hearts in the end, it is okay.

however, the chinese auto market is so large that we should understand that the formation of market rules and order is not determined by a single automaker or a few companies. when the market structure is reshaped and evolves towards another form, some pains cannot be covered up by the superficial prosperity.

now, consumers are immersed in the joy of buying cars at a discount, and new energy car companies are happy to encircle and suppress traditional car companies. this is a true reaction to the market beginning to deviate from its past inherent trajectory. on the other hand, most downstream companies in the industrial chain are experiencing unprecedented survival shocks, which has actually become a microcosm of this market change.

especially those automobile dealers, compared with the supply side, they have begun to fall into the development problem of lengthening collection cycle and accelerating r&d speed. a large number of market changes that directly affect their survival lifeline have almost made them lose the ability to face any industry turmoil.

previously, due to the impact of the direct sales system established by new forces, potential users were lost in large numbers, and dealers had to enter the tangled state of becoming internet celebrities; now, while selling inventory at a loss, they have to face the continuous release of new cars by manufacturers and the launch of rounds of price wars. the occurrence of too many changes, the final result is self-evident.

why has the chinese auto market become like this? faced with this topic, i think no one has given a good explanation. but at this point, as more and more disturbing information comes out in the industry, is it really not worth the whole industry to think carefully about the future development of the auto market?

a few days ago, the china automobile dealers association’s official microblog said that in recent times, the association has received feedback from a large number of member companies that the drastic changes in the automobile market caused by factors such as the ongoing “price war” have left auto dealers in a quagmire and facing the prominent problem of extremely tight liquidity. for this reason, the association has formally submitted an “emergency report on the current financial difficulties and closure risks faced by auto dealers” to relevant government departments.

the report also pointed out very realistically that automobile dealers are currently experiencing large-scale losses in new car sales, with a widespread cash flow deficit and an increased risk of capital chain rupture, making it difficult for them to escape their survival difficulties.

as mentioned at the beginning of the article, on the one hand, the lack of vitality in automobile consumption caused by the overall economic environment and the endless wholesale of vehicles by automobile companies have caused dealers' inventory equivalent to remain high. in order to ease the contradiction, they are forced to sell at low prices; on the other hand, the intensified "price war" has directly disrupted the already fragile purchase and sales system, and the contractual relationship between heavily indebted dealers and banks has been directly put to the most extreme test.

in the past two years, especially after the price war started, there have been many news reports about dealers going bankrupt and their bosses running away. from the big guanghui group to guangdong yongao, jiangsu senfeng, zhejiang zhongtong, etc., which one did not collapse or undergo restructuring due to the combination of these reasons?

of course, we do not deny that as the chinese auto market has evolved to today, it is time for those auto dealers who once made money standing still to receive re-education brought about by industry changes. and for many consumers, they are eager for these profit-seeking companies to vacate their positions and hand them over to auto companies that are capable of building their own direct sales systems.

however, any problem must have two sides. behind the arrogant and domineering car dealers' cries of "help" is the sadness of misjudging the speed of the times, which also points out the long-term development risks of the chinese auto market to a certain extent.

according to the information released simultaneously, as of august this year, the highest dealer sales-purchase gap has reached -22.8%, which has further expanded by 10.7 percentage points compared with the same period last year. according to the relevant data analysis of the association's experts, in august, the overall discount rate of the new car market was 17.4%. from january to august this year, the "price war" has caused the overall retail sales of the new car market to lose 138 billion yuan.

looking at the development of the chinese auto market over the past 20 years, such staggering losses are almost unprecedented. in this regard, i can only say that things have come to this point. when the market has lost its ability to heal itself, the only reason that can be confirmed for the market to enter such a state is that the dealers, manufacturers and users in the same chain are no longer on the same channel.

in the past, manufacturers could resolve the contradiction between vehicle supply and sales through the distribution capabilities of dealers. dealers who held the dominant position could influence consumers' decisions by using the source of vehicles. if there were funding problems, there were a large number of financial institutions and banks behind them to disperse the pressure in this link. but now, watching the bargaining chips in everyone's hands being gradually eliminated by the flames of price wars, living without rice means that being hurt by the environment has become a reality.

in today's world of frequent survival crises, if we look at the problem from the perspective of dealers, most people would think that since the situation is so serious that we have to use the china automobile dealers association to implore relevant departments to take quick action and study and introduce phased financial relief policy measures in the automobile distribution sector, then it is understandable for dealers, as the weaker party, to make such a request.

but in fact, looking back at the distribution logic that the chinese auto market has always adhered to, i think that the foundation of many problems has been formed for a long time.

we used to think that after the "automobile sales management measures" came into effect on july 1, 2017, the original "automobile brand sales management implementation measures" were abolished at the same time. the output of the new policy promoted reforms such as breaking the single system of brand authorized sales, which would have a positive impact on automobile sales methods, consumer rights and interests, etc.

among them, many clauses are aimed at guiding and regulating the trading behaviors of automobile suppliers and dealers. for example, suppliers are prohibited from unilaterally determining sales targets, bundling products, restricting multi-brand operations and resales, etc. but in fact, as the saying goes, "there are policies from the top and countermeasures from the bottom", when the market continues to emerge with dividends, don't expect everyone to do things according to the rules.

in the industry, car companies have always had rules for the allocation of car sources to dealers. hot-selling cars are paired with inventory cars and unpopular cars, and are handed over to dealers together to balance their interests. this is almost a default for all participants. similarly, as the game gets bigger and bigger, leveraging becomes something that everyone is happy to tinker with.

all of a sudden, dealers wanted to maximize their profits and needed hot-selling cars to offset the losses of slow-selling cars. it became the norm for them to go to banks to get financing by mortgaging certificates of conformity when they had no money. in order to sell new cars to as many consumers as possible, various financial institutions were introduced to offer various preferential conditions with inherent blood-sucking properties.

in fact, whether you have noticed these chaos or not, they have been exposed to the outside world through many channels a long time ago. however, because the pie is big enough and the upward momentum of the market is too strong, no one cares about them, and even directly attributes them to accidental events.

is business really just about making money? since the establishment of the dealer system, i think the answer to this question has always been yes.

especially in the decade when the chinese auto market was growing rapidly, how could auto dealers adhere to the long-term approach in order to maintain the healthy development of the market?

in the era of brand chaos, making quick money is what the entire industry chain is doing, and dealers in it will always be overwhelmed by such an environment. but obviously, this is also destined, when the tide recedes, we will definitely see who is really swimming naked.

in fact, since entering 2024, everyone knows that the consequences of the price war will definitely make most people feel painful. with the existing stock being eroded and the increase unable to be obtained, traditional dealers will inevitably be attacked from both sides. however, when all the unpleasantness came, who would have thought that this chain of pain would lead to such an outcome. the suffocating feeling of a knife inserted into the lung tube is too deadly.

previously, the "2024 first half national auto dealer survival status survey report" released by the china automobile dealers association showed that in the first half of the year, the loss rate of domestic auto dealers was as high as 50.8%, while the profit rate was only 35.4%. the reason behind the substantial year-on-year increase in losses is that many dealers are already in a deficit state and on the verge of bankruptcy.

perhaps, in order to change this situation, in the middle of the year,bmwbmw took the lead in sounding the horn of price tightening and went against the trend, trying to reverse the situation with its brute force, but the reality was too harsh. the fall in sales shattered bmw's ideals and dealt a heavy blow to all its peers who wanted to stop the price war.

some people may suggest that if the dealers who are going through all this can just use the money they previously earned to deal with the emergency, or if the car companies take the initiative to reduce production and scale, wouldn’t all these problems be solved?

but the root of the problem is that self-guidance within the industry alone is no longer enough to correct the chaotic way of life in the industry. the broken capital chain of dealers is actually paying off the debts of the past. the impact of car companies' production cuts on employment and the practice of undermining the stability of the entire industry chain are also unacceptable to local governments.

in this way, whenever a dealer complains about how difficult it is to survive and that the original method of relying on shipment volume to compete for rebates is gradually becoming ineffective, what is the use of having more empathy?

using extraordinary measures to rescue this precarious system is of course a last resort. but for the chinese auto market, which has now entered a new stage of development, if this turmoil can be safely smoothed out, the dealer system, which is plagued by chronic problems, needs to be reformed from the source. otherwise, the magical situation of forgetting the pain after the wound has healed will continue to repeat itself.

in fact, in the end, the "price war" is just a mirror that exposes the various aspects of the industry. at the same time, it allows the industry to reflect from top to bottom on who is pushing dealers to the brink of death step by step.