In the middle of December in Guangzhou, a rare cold in Lingnan suddenly came.
In a GAC Toyota dealership located in Haizhu District, the chill in the air was dispelled by the popularity of the hall, and most of the small round tables in the store were filled with customers, and sales consultants were accompanying the discussion**;Some are sitting and consulting products;There are also groups of relatives and friends who watch the car ...... the exhibition hallThe sales consultants standing idle can barely be seen, everyone is busy.
It wasn't the weekend.
We have completed the task of the whole year, who is still impulsing in December?Too late. Our impulses are mainly in October and November. Now it's time to sell the car for next year. A sales consultant told Auto Business Review. "If the guest comes to buy a car in October or November, it is easier to discuss, and now that our annual task has been completed, there is not much room for discounts. If the customer is not in a hurry, we will generally persuade the other party to open the invoice for the purchase of the car in the next month, and the next month's discount will be a little more, and we are ready to rush the sales in January. ”
The store belongs to a state-owned enterprise, established in 2006, is a 17-year-old store, with an annual sales scale of 4,000-5,000 vehicles, and about 20 front-line sales consultants.
GAC Toyota's sales target for this year is 930,000 units, and last year it achieved 1 million units, surpassing FAW Toyota in the north for the first time. Before November this year, the inventory coefficient of GAC Toyota's dealers was high, all at 20 above, such a situation is not only GAC Toyota, other brands including FAW Toyota in order to complete the year-end corporate goals have also led to high dealers' inventory.
On November 3, FAW Toyota announced to dealers that it would reduce production and lower its sales target for December 2023 to January 2024, with a three-month sales volume of 660,000, 60,000 and 380,000 units. At the same time, GAC Toyota also organized a dealer meeting to discuss how to reduce the burden. After several rounds, the sales target of each store was finally lowered before the end of the year.
North and South Toyota have been secretly competing for many years.
In addition to adjusting sales, according to Auto Business Review, GAC Toyota has also set up multiple gears on the reward for the annual sales achievement rate, so that more dealers can receive incentives.
GAC Toyota originally only divided into two gears to issue rewards, which were 100% and 80% of sales completion rates. After this adjustment, the reward tiers have increased by 70% and 90%, and each of these tiers corresponds to different rewards.
The dealership in Guangzhou's Haizhu district apparently achieved its goal 100 percent.
According to the results of a survey conducted by Auto Business Review in Guangzhou and Beijing, most dealerships have completed 100% or 90% of GAC Toyota's sales targets. But at the same time, some dealers with good performance do not want the manufacturer to downgrade the task, because after the adjustment, it means that the high reward under the original high task is diluted by other stores.
Equally popular is the Mercedes-Benz store. Also in Haizhu District, Guangzhou, the amount of the Mercedes-Benz store seems to be in great contrast with the current situation of dealers losing a large area. The service in the store has maintained the level of Mercedes-Benz, and the best strength of the model is more than 10,000 yuan, attracting many users.
This Mercedes-Benz store is a state-owned enterprise holding property, opened in 2006, and the annual sales scale is about 4,000-5,000 vehicles. Because it is a luxury brand, the total number of front-line sales consultants in the store is much higher than that of GAC Toyota, with a total of about 40 people.
I feel like this every year in the market, I don't particularly feel affected by the ** war, this year we are selling about the same as last year, and last month (November) I sold three more cars. A sales consultant wearing a black cashmere coat told Auto Business Review.
Compared with the Guangzhou market, the inventory of Japanese brand dealerships in the Beijing market is generally relatively high, and the person in charge of the store generally says that the pressure is high, and the tasks given by the manufacturer are difficult to complete. But one of the top three dealerships in Wangjing, Beijing, said they had completed their task ahead of schedule.
At present, the dealerships of major brands are trying to find ways to complete the manufacturer's annual sales task, whether it is with compliance or various illegal operations, because this is the threshold for manufacturers' rebates and rewards. If the goal is not completed, it will be difficult to enjoy the next series of subsidies. After all, many dealerships need to rely on rebates and bonuses from manufacturers at the end of the year to make up for their losses throughout the year.
Those who have already achieved their targets are preparing for sales in January next year, as the entire first quarter will become an off-season due to the Spring Festival.
The top dealer camp and the first-line luxury brand stores have maintained their profit margins in this year's ** battle, of course, there are differences between stores, and there will be exceptions.
The dealerships of the top camp often have a large sales scale, which means that they can get more discounts from the manufacturers when buying in batches.
For example, a store that sells 3,000 vehicles a year, after combining various incentives from the manufacturer, the purchase price of a bicycle will be cheaper than that of a dealership that sells 1,000 vehicles a month. Because ** is cheap, it is cheap when it is sold, and you don't have to bear the cost. This is a purchase price that a small store can't get, which means that if you want to compete with such a store, you have to sell the car at a loss, and ** is more favorable than him.
In addition, when the first is relatively low and at the same time does not need to reduce the price by itself, the sales volume of the store will increase, and the capital turnover will be fast. Because the sales of traditional fuel vehicles still adopt the wholesale sales model, the loan turnover used to buy cars at the store side will also be faster, the interest paid will be less, and the cost of capital will also be reduced.
In addition, the more the store sells, the more rebates the manufacturer has. Therefore, the head dealer camp still maintained profitability in this year's first battle.
Auto Business Review visited one of the top three SAIC Volkswagen stores in Beijing, and the person in charge of the store said: "This year's annual task has been exceeded, and the profit is higher than last year." ”
First-tier luxury brands such as Mercedes-Benz and BMW dealerships are also profitable. Although these brands have often been benchmarked by new domestic forces in recent years, they still have strong brand bargaining power, and the price reduction has attracted more people to buy.
In addition, at the beginning of June this year, BMW subsidized dealers by 4 billion yuan, Mercedes-Benz also gave stores subsidies in the first quarter, and Audi issued a 2% subsidy on the price of each car sold by dealers.
The high subsidy of manufacturers is also an important fund for each company to maintain income or cope with the war this year.
In addition, dealerships that are state-owned or controlled by state-owned enterprises also have high profit potential. "A lot of their land was bought by the group in the early days, and some of it was leased at a low price. Land and personnel salaries are the two fixed costs of dealerships, state-owned enterprises have inherent advantages in land rent, and they are generally old stores, with large-scale and fixed after-sales groups. A dealership manager said.
In addition, state-owned dealerships have become the marketing selling point of the store, and "state-owned enterprises" are equivalent to "reliable", "safe" and "reliable". In fact, this marketing has worked for a lot of people. The Mercedes-Benz store in Guangzhou, in terms of car viewing and after-sales service, has become the first place for the surrounding people to buy a car.
For the sinking market, when it is generally the exclusive dealership in a certain area, it also has an advantage, because there are no competitors, and it has pricing power in the price of new cars and after-sales maintenance.
According to the "Survey Report on the Survival Status of Auto Dealers in the First Half of 2023" released by the Automobile Dealers Association half a year ago, this part of the dealer group that is alive well accounts for between 20% and 30%.
Most of the dealerships that have difficulty in operating and withdraw from the network are related to the development of manufacturers.
Lang Xuehong, deputy secretary-general of the China Automobile Dealers Association, pointed out at the 2022 Blue Book Forum of the Automobile Dealers Industry that the dealerships that have withdrawn from the outlets are mainly second-tier joint venture brands, such as Beijing Hyundai, Jeep, Guangfic, Skoda, etc.
According to data from the China Automobile Dealers Association, joint venture brands accounted for 57% of the 1,400 dealerships that withdrew from the network in 2021.
With the rise of domestic brands, some joint venture brands with similar price points are facing greater pressure, and some joint venture brands have withdrawn from the Chinese market. In addition to joint venture brands, second-tier luxury brands, including Acura and Infiniti, have also withdrawn from the network.
In a market environment where supply exceeds demand, it is often difficult for dealerships that are not in the top camp. Especially for those new stores, the after-sales business has not yet formed a scale. For this reason, the subsidies given by manufacturers are particularly important, sometimes equivalent to life-saving money.
Take a domestic self-owned brand dealership as an example. The store is new for three years, but its parent company already has a number of brands. Half of the sales in the store were sold to other places through the second network, so in the past three years, the after-sales business has not been cultivated. This year, they sold a total of 1,500 vehicles, of which 360 were completed in the third quarter, barely meeting the manufacturer's target.
The general manager of the store told the auto business review that because of the war, they made a profit of more than 100,000 yuan per car, with almost no profit, and there was not enough income after sale. At this rate, they will lose a lot of money this year. However, in the third quarter, the manufacturer suddenly issued a new business policy, subsidizing 10,000 yuan for each car that has been sold. This means that they received a subsidy of 3.6 million yuan from the manufacturer, which can make up for the quarterly loss in the third quarter.
In the fourth quarter, the manufacturer has not yet clarified the business policy, and the store always said that each store is waiting for the manufacturer's information, and if they do not subsidize, they cannot afford this loss.
In recent years, the market share of second-tier joint venture brands has been declining, the market share and profit margin have been declining, and the manufacturer's funds are very limited, so there is little support for dealers.
At present, according to the Auto Business Review, in the northern region, Japanese brands are not selling well in the south. Guangqi Honda's Guangzhou store has a much higher volume of products and consumer recognition than in the northern region. Even for the same brand, the survival situation is very different because of the different geographical locations.
If there is no subsidy from the manufacturer, the dealer will close the store if there is no hope of losing money for one or two consecutive years. The general practice is that several stores in the same city will be merged into one, and the big stores will be treated as small stores, which is generally the way to close down and transfer. Another way is not to do it yourself, and rent the venue to others to open new energy. If the venue can't be rented or sold, hold on first. A person in charge of a Beijing dealership said.
The automobile industry is very attractive, and after ordinary people come in, they are reluctant to do other businesses, because the scale involved is large and the amount of money is relatively easy to earn. I'm going to quit the store that doesn't make money now, and then go to the Kaiwenjie and Xiaomi stores, and I heard that the Wenjie is very profitable. A person in charge of a number of brand dealerships said.
At present, there are about 30,000 dealerships in the country, and the withdrawal rates from 2020 to 2022 are: 8% and 56%, the data for 2023 has not yet been released by the China Automobile Dealers Association.
However, based on Huawei's recruitment of terminal partners, Xiaomi's expansion of channel stores, BYD's rapid layout and the listing of NIO's second brand, the demand for terminal stores by the entire car factory will still be strong next year. At present, the growth area of the terminal next year is still an independent new energy brand. Therefore, although this year's first-class war has thinned the sales profit of new cars, the total volume of the overall terminal is still expected to rise year-on-year.
For the dealerships of the head camp, they still have an advantage, especially the first-line luxury brands, to do a good job in reducing costs while maintaining service capabilities. They have enough funds and enough support from manufacturers to cope with the market next year.
Most dealerships are reducing costs to varying degrees. From the management of vehicles**, logistics and daily consumables, "In the past, the older generation used to manage the store lavishly, and the car could make money at that time, but now we have to manage it again, and we have a fixed budget for the greenery in the store and the snacks of the day." The general manager of a German joint venture brand said.
Through the construction of vertical media channels, live broadcast and promotion are the direction that many dealerships are working towards. The dealership does a live broadcast, and the manufacturer also gives corresponding financial support. "One of the best employees of the year in our store is doing live broadcasting, and she sold 100 cars on her own this year. One Japanese brand always says, "It's a trend," he said.
In addition, judging from several sets of data in the "Survey Report on the Survival Status of Auto Dealers in the First Half of 2023", when the profit of new car sales in dealerships is almost zero, other revenues on the store side will increase year-on-year, which mainly includes after-sales, financial insurance and second-hand car business.
We didn't set KPIs for retrofitting and peripherals before, but now that new cars don't make money, we let sales make money from these places. "The store of the Japanese brand always said.
During the interview, Auto Business Review found that brands with a small market share, such as Jeep, have better dealership profitability than expected. At present, Jeep has changed to the ** model, which is the same as the previous way of selling ID models in the north and south. There are only four dealerships left in Beijing Jeep, and the manufacturer no longer presses the warehouse, sells a car, and the cash rebate is also maintained. It is relatively easy in terms of funds, because this is an old store, except for ground rent and labor, other equipment has been depreciated, and there is also a fixed after-sales service.
There are more than 30,000 dealerships in China, except for the 10%-20% or so groups in the head camp, the others are more normalized survival status. Everyone has their own way of living.