There are more and more direct sales stores of new energy vehicles, and traditional 4S stores are forced into the corner.

Amid the uproar, the domestic auto market handed over its half-year answer sheet. According to the data released by the Federation on July 10, in the first half of this year, the retail sales of domestic passenger car market maintained a month-on-month growth for six consecutive months, and the cumulative retail sales reached 9.524 million units, up 2.7% year-on-year.

However, the gradual recovery of the auto market has not brought too much warmth to auto dealers. On June 30th, the first huge group of domestic automobile dealers was officially delisted. The sudden delisting of the former "king of 4S shops" is regarded as the epitome of the difficult situation of the current automobile dealer industry.

Facing the tide of new energy, the traditional automobile 4S shop is constantly being pushed to the corner.

Industry normal: "can’t make money"

Han Zhen, secretary general of Anhui Automobile Dealers Chamber of Commerce, bluntly said that "no money" has become the industry norm.

The hard life of domestic car dealers did not begin this year. 2018 is regarded as the turning point of the automobile distribution industry. In this year, the cumulative sales of new cars in China reached 28.0806 million, down 2.76% compared with 2017, which was the first annual decline since 1990, and it has been declining year by year since then. The era of "lying and earning" by automobile dealers is gone forever.

According to the Survey Report on the Living Conditions of National Automobile Dealers in 2022 released by china automobile dealers association in February this year, less than 20% of the dealers achieved their annual sales targets last year, less than 30% achieved profits, and 45.2% were at a loss.

The price war in the automobile market in the first half of this year, in a sense, was triggered by the dealers’ struggle for survival. Tesla’s unexpected price cut at the beginning of the year started the first shot of price reduction for new energy vehicles. Under the dual pressure of switching the national standard of fuel vehicles and declining sales, the price reduction tide quickly swept the fuel vehicle market. In March, marked by Hubei Province’s "hard-core subsidies" to Dongfeng’s brands, the price war started in an all-round way, and almost all mainstream brands were involved. The main theme of price reduction runs through the automobile market in the first half of the year.

Han Zhen told reporters that in Anhui market, for example, luxury brands led by BBA (Mercedes-Benz, BMW and Audi) generally offer more than 10% at present, and some models can reach as high as 18%. Moreover, the pressure of price reduction continues to be transmitted downward, and the original economic models with relatively small profit margins are not allowed, resulting in sluggish sales; The mid-range brands located in the "sandwich layer" are the most injured, especially some mainstream joint venture brands, and the market performance of their traditional fuel vehicles is terrible.

Dealers hope to sell more cars through price strategy to complete the sales task, and the impact of price reduction on the overall profit rate is also immediate. Han Zhen revealed that after this price war, the profit of luxury brand dealers in Anhui market lost at least 30%. In some parts of China, there is even an extreme situation in which dealers "cut meat" subsidies. In the face of sales pressure and sharply shrinking profits, the current situation of car dealers can be imagined.

On July 6th, China Automobile Industry Association organized 16 automobile manufacturers to jointly issue the Commitment Letter on Maintaining Fair Market Order in Automobile Industry, aiming at stepping on the brakes for the increasingly intensified price war. However, after the letter of commitment was issued, the first article "Do not disturb the fair competition order in the market with abnormal prices" was accused of violating the spirit of the anti-monopoly law. Since then, the China Automobile Association has issued a statement announcing the deletion of relevant clauses in the letter of commitment.

Does it mean that the price war will continue in the future after the storm of clause deletion? An automobile dealer who asked not to be named said that the industry is generally not optimistic about this. More importantly, the price war is not the main reason for the hard life of car dealers. Even if the price war turns off immediately, the industry still has greater challenges to face.

4S shop: not needed

On July 3, China’s new energy automobile industry ushered in a milestone, with the cumulative output exceeding 20 million vehicles. At the same time, the market performance of new energy vehicles has also made great strides. According to the data released by the Federation, the cumulative retail sales of new energy vehicles in the first half of this year was 3.086 million, a year-on-year increase of 37.3%. In June this year, the domestic retail penetration rate of new energy vehicles has reached 35.1%.

The hot sale of new energy vehicles has nothing to do with traditional car dealers. On the contrary, the impact of the direct sales model brought by new energy automobile manufacturers on the traditional automobile distribution model has further aggravated the "hard life" of dealers today.

"In the popular words now, the gameplay has been subverted." Han Zhen said.

In 2013, Tesla, regarded as an industry catfish, entered the China market. Its direct sales model has been followed by many new domestic brands, and has gradually become the standard in the field of new energy vehicle sales. Different from the traditional 4S shop distribution model, the new energy automobile direct stores that blossom everywhere in the city business circle are often named as image stores and experience stores, which carry more product exhibition functions, aiming at shaping brand image and enhancing brand awareness and presence. In terms of sales, consumers directly pay the manufacturers through the system platform, and the direct stores do not make profits in the sales link, but the manufacturers pay the commissions to them after the delivery is completed.

This game, in which there is no middleman to earn the difference, completely excludes automobile dealers from the sales system of new energy vehicles. For manufacturers, the direct sales model can bring them greater control over the sales side; For consumers, buying a car has also been simplified as walking into a Huawei or Apple store to buy a mobile phone.

Since Tesla landed in the domestic market, the direct mode of new energy vehicles has taken root for 10 years, and consumers’ consumption habits have been basically shaped. Direct-operated stores of new energy vehicles are gradually changing from brand standard to business standard. In a large commercial complex in Changning District, Shanghai, most of the space on the second floor of the basement was transformed into a "new energy car block" last year, and nearly 20 brands of direct stores settled in it.

Han Zhen believes that the product characteristics of new energy vehicles are highly compatible with the direct mode. For new energy vehicles, the traditional 4S shop seems to have become an unnecessary existence.

The so-called 4S means vehicle Sale, Spare part, after-sales Service and information Survey. The follow-up service of car owners after buying a car is the most important function of 4S stores besides sales, and it is also an important source of profits. However, the structure of new energy vehicles is far less complicated than that of traditional fuel vehicles, so there is little concept of "maintenance" and no extra manpower is needed for after-sales service; For the basic maintenance of car body, brands have invested in their own car body painting centers in recent years, and traditional dealers have no way to say anything. Under the tide of automobile intelligent network connection, the owner’s information feedback can be completely arranged by the car machine system.

When the car company personally leaves the sales end, the final existence value of the 4S shop will also be shattered. At present, many traditional car companies have also begun to introduce direct stores or authorized stores in their new energy product lines. Volkswagen ID, SAIC Zhiji, Dongfeng Lantu and some luxury brands of new energy vehicles have also joined the team that opened stores and set up sample cars in shopping malls.

Abandoned 4S stores have to continue to stick to the position of traditional fuel vehicles and face the bleak sales figures feebly.

"Version answer": Not necessarily reliable

The increasing market penetration rate declares that new energy vehicles are the general trend in the domestic market. How 4S stores save themselves has become a widely discussed topic in the industry. A basic consensus is that traditional car dealers must actively embrace new energy sources. In Han Zhen’s words, this is "a step that has to be taken".

The rapid development of domestic new energy automobile industry in recent years is obvious to all, and the market share of traditional fuel vehicles is being eroded. For the automobile dealer industry, it is obviously unwise to continue to tie up the exhausted fuel car when the car companies repeatedly transmit the pressure to the circulation end. It is imperative to actively seek opportunities and entry points under the new market structure.

Some people in the industry said that the direct stores widely used in new energy vehicles are certainly the current "version answer", but they may not be the final format of new energy vehicle sales. As the industry volume becomes more and more serious, it remains to be considered whether the current direct sales model can be maintained for a long time for middle and rear brands.

On the other hand, the rental cost of large business districts should not be underestimated, and after years of staking, there are few high-quality space resources left for brands. Relatively speaking, car dealers still have advantages in terms of channels and land resources. If these superior resources can be effectively docked, 4S stores and new energy vehicles are not completely incompatible.

Han Zhen also pointed out that after more than 30 years of development, the domestic automobile distribution industry has accumulated enough teams and talent reserves. For new energy automobile brands, especially start-up brands with relatively small volume, it is better to let professionals do professional things than to build their own teams to arrange sales and maintenance. At the same time, the sales volume of the traditional 4S shop model and the role of the fund reservoir can also provide a certain guarantee for the stable development of car companies.

However, it is not difficult to embrace the "one step that has to be taken" of new energy. It is a great embarrassment that dealers have to face that they used to love to answer and ignore, but now they can’t afford to climb high. Dealers can certainly show a more open attitude towards new energy vehicles, but it is not easy to convince new energy vehicle companies that have achieved success in the market to leave a piece of cake for themselves. Trying the wrong brand down will also require dealers to bear a lot of risks.

From Sai Lin and Ranger, who died early, to Weimar and Aichi, who recently fell, the "death list" of new energy car companies is also constantly lengthening under the upsurge of new energy car making. Han Zhen said that at present, there are many brands in the domestic new energy automobile industry, and it is still unknown who will win. If dealers are eager for success and blindly bet, it may be counterproductive.