Car.
The rise and fall of the parallel import car market.
Introduction: In recent years, China's auto market has undergone tremendous changes, especially in the parallel import market. Parallel importers, once lucratively profitable, are now in bankruptcy and huge debts. Why has this once-high-hoped, market, experienced such a rapid process of prosperity, decline, and even demise? This article will provide an in-depth analysis of the history, definition, mode of operation, profit model, market changes, and future prospects of the parallel import car market, as well as the economic mechanism and the reasons behind it.
1. The historical scene of parallel imported cars.
In the past few years, the parallel import car market has been booming, and car dealers have leveraged to import a large number of models, hoping to obtain high profits through direct procurement of foreign models. However, there has been a 180-degree shift in recent years, and many parallel import car manufacturers are facing bankruptcy due to inventory backlog and rising costs, and the market outlook is worrying. This drastic change has drawn attention to the parallel import car market and prompted us to dig deeper into the historical context of its development.
In the early days of the rise of the parallel import market, this model was seen as a kind of "cash cow", and car dealers achieved high profits by purchasing models directly from overseas and avoiding a series of first-class business links. However, this boom is not sustainable, market changes and the rise of the domestic auto industry have made the former "** era" gradually farther away.
2. Definition and operation of parallel imported vehicles.
Parallel imported cars are in stark contrast to Chinese imported cars. Medium-sized imported cars are shipped by car companies and finally reach consumers through first-class **, while parallel imported cars are car dealers who directly purchase models abroad, and can finally be licensed and settled in China through customs entry and commodity inspection procedures. Due to the avoidance of layers of dealers, the ** of parallel imported cars is relatively much cheaper. Imported models from different regions, such as American specifications and parallel imports from the Middle East, are mainly high-end cars, including some off-road vehicles and sports cars.
The operation mode of the parallel import car market is essentially to directly face the foreign automobile market, and select models that sell well in the market and are in demand in China for procurement. This model did bring high profits for a certain period of time, but with the intensification of market competition and changes in consumer demand, this simple and crude profit method began to appear inflexible and even in trouble.
3. The profit model of parallel imported cars.
Why did parallel importers make sure they didn't lose money in the past? In fact, the reason is very simple, there is an audience. The models that car dealers choose to import are all marketable in China, because the ** of taking goods abroad is relatively low. Add tariffs, transportation costs and other costs, and then sell to domestic consumers, there is almost no possibility of losing money before. Taking the BMW X7 as an example, the domestic price is about 10390,000 yuan, while the price in the United States is only 73,900 US dollars (about 520,000 yuan). Even when all the expenses are taken into account, there is still a lot of profit margin. Coupled with sales strategies such as loans, accessories, and decorations, parallel import car dealers used to be synonymous with making money in the past.
However, this profit model is gradually becoming ineffective in the midst of market changes. The domestic auto market has gradually become highly dependent on domestic cars, and consumers' recognition of domestic quality has increased, and the demand for parallel imported cars has declined. In addition, policy adjustments and fluctuations in the international market have led to an increase in the cost of parallel imported cars and a squeeze on profit margins.
Fourth, the transformation of the parallel import car market.
However, with the implementation of the National VI emission standard, car dealers have not reduced prices, but hyped up "sell one less one", "today's sky-high price will be tomorrow's **" and other methods. Models such as hardcore off-road vehicles, powerful sports cars, and huge pickup trucks are even more exaggerated. But there is a problem behind this market boom: overstocking and prolonged customs clearance cycles are making parallel importers pay higher costs. In particular, some traditional off-road vehicles, under the impact of the rise of domestic off-road vehicles, have led to a huge dilemma for car dealers who have previously hoarded a large number of vehicles on leverage. Taking Toyota's new generation of Land Patrol as an example, its ** fell by as much as 1.16 million yuan in a short period of time.
The change in the parallel import car market is not only affected by the adjustment of domestic auto market policies, but also by the fluctuation of the international market. With the development of the domestic automobile industry, the requirements for emission standards are getting higher and higher, and parallel import car manufacturers have to face stricter environmental protection standards, resulting in an increase in the cost of models. The favor of domestic consumers for domestic off-road vehicles has made some traditional imported models face sales pressure, and the problem of inventory backlog has been further highlighted.
Fifth, the rise of domestic cars and the decline of parallel imported cars.
With the rise of domestic off-road vehicles, some parallel import car manufacturers who mainly make Japanese off-road vehicles are facing unprecedented pressure. In the past, the imported Land Cruiser (Land Patrol) used to make money almost lying down, but with the rise of domestic off-road vehicles, the traditional off-road vehicle market declined, and these car dealers faced a huge inventory problem. Due to the high enthusiasm of domestic consumers for domestic off-road vehicles, and the fact that it is relatively close to the people, the life of parallel import car dealers has become more difficult. This rapid change in the market raises questions about the future prospects of parallel imports.
The rise of the domestic off-road vehicle market has far exceeded expectations, and has become a major variable in the parallel import car market. Some automakers may not be able to adjust their strategies in time and still cling to the profit model of the past, resulting in a mountain of model inventory. The domestic off-road vehicles have great competitive advantages in terms of performance and quality, which makes traditional imported models gradually lose market share. From the import in 2021 to the passage of various procedures in 2023, the inventory backlog and the extension of the customs declaration cycle brought about by the conversion of the National V emission standard to the National VI emission standard have also made parallel import car manufacturers pay higher costs.
6. The rise of China's auto exports.
In stark contrast to the decline of the parallel import car market is the rise of China's car exports. According to the customs data compiled by the China Passenger Car Association, China's automobile exports rank first in the world in terms of volume and value. From January to November 2023 alone, China's auto exports reached 4.76 million units, with an export growth rate of 60%. This strong export momentum has made the once busy Tianjin Port car showroom less popular, demonstrating the strong competitiveness of China's auto industry. This also means that the position of parallel imported cars in China's auto exports will be further impacted, and their market share may continue to be challenged.
The reasons for the rise of China's auto exports are complex and varied. First of all, China, as one of the world's largest automotive markets, has strong production and manufacturing capabilities to meet the automotive needs of different countries and regions. Secondly, the gradual rise of Chinese auto brands in the international market has led to an increase in consumer recognition of Chinese brands, and as a result, the export volume has also increased significantly. Coupled with the support and guidance of the automobile industry, the trend of China's automobile exports dominating the global market is becoming more and more obvious.
This rise contrasts sharply with the decline in the parallel import market, highlighting the strong competitiveness of China's auto industry. Tianjin Port Automobile Exhibition Hall from the previous few years of the crowd, to now can be said to be almost unattended, this contrast is in just a few years, and behind this is the rise of domestic cars, and the change of domestic consumer psychology, in a few years, parallel import cars may become a historical vocabulary.
7. Future prospects for parallel imported cars.
In the face of the rise of domestic cars and the strong growth of China's auto exports, the parallel import car market may usher in a more difficult time. The decisive role of changes in consumer psychology on the market, as well as the decline of the traditional off-road vehicle market, have made parallel importers face unprecedented challenges. China's global leadership in the auto industry, and its growing preference for domestically produced cars, could make parallel imports a historical word in the future. In this era of change, the parallel import car market needs to deeply reflect on its own positioning and development strategy to adapt to the new market environment.
The changes in the domestic automobile market are not only related to the future of the automobile industry, but also involve the adjustment of the economic structure and the upgrading of the entire country. The challenges and dilemmas of the parallel import car market are not only a phased problem in the development of the market, but also a new challenge faced by the automobile industry. In the new stage of development, parallel importers need to flexibly respond to market changes and find innovative development paths.
Conclusion: The rise and fall of the parallel import car market is a complex and profound process. Under the dual effect of market change and consumer demand, the once money-making machine has become more and more fragile. However, no matter how the market changes, it is worth thinking deeply about the development of the automotive industry. The vigorous development of China's auto market has made the parallel import car market emerge in the midst of huge challenges. In the future, whether parallel imported cars can adapt to market changes and find new ways to survive will become the focus of attention of the industry and consumers. In this era of change, the parallel import car market needs to deeply reflect on its own positioning and development strategy to adapt to the new market environment.