50% of dealers are profitable The development of the second-hand car industry standards has accelerated

Source: International Business Daily Wang Xuguang

With the continuous development of the domestic second-hand car industry, the gradual improvement of the institutional system, the increasing optimization of the business environment, and the increasing acceptance of second-hand cars by consumers, standardization and transparency will become the main theme of the development of the second-hand car market. At the same time, the standardized development of the second-hand car industry has not only made many customers who did not dare to buy second-hand cars in the past start to buy second-hand cars, but also allowed the second-hand car operating enterprises themselves to develop and grow.

A few days ago, the China Automobile Dealers Association released the "2021 Business Environment Report for Used Car Operators", which analyzed the current business environment and survival status of used car operators through detailed data analysis. Luo Lei, deputy secretary-general of the China Automobile Dealers Association, pointed out that the release of the "Report" has a benchmarking and guiding effect on the development of second-hand car dealer enterprises to a certain extent.

The proportion of dividend release dealer companies has increased year by year

The survey data reflects the overall operation of enterprises, from the perspective of the company's age, enterprises that have been operating for more than 10 years account for 31.5% of the total second-hand car dealer enterprises, 44.6% of the enterprises that began to operate from 2012 to 2018, and 23% of the second-hand car dealer enterprises that began to operate after 2018. It can be seen that most of the companies in the current used car dealer enterprise group are relatively young.

From the perspective of the distribution of second-hand car dealer enterprise formats, most of the second-hand car dealer enterprises are mainly operated in the second-hand car trading market, accounting for more than 80% of the total, and their business formats are mainly based on brokerage companies, distribution companies and individual merchants. Among them, the individual merchant format is the main format at present, accounting for 47.5%; Brokerage company format accounted for 11.9%; With the release of the second-hand car policy dividend, the proportion of second-hand car dealer companies has increased year by year, accounting for 40.6% of the scale.

From the perspective of operating area and employees, the majority of used car dealers with an operating area of less than 500 square meters account for 75%, showing that the overall scale of used car operating enterprises is small. From the perspective of single store employees, companies with less than 3 employees still account for the highest proportion.

Luo Lei said that from the data of the "Report", it can be seen that enterprises operating high-end brands are more likely to achieve profit growth and strong profitability. As the profits of used cars become more and more transparent, in the actual business process, the models operating more than 100,000 yuan, especially the models between 100,000 and 200,000 yuan, are the most profitable, and the worst profits are models within 30,000 yuan.

According to the survey data, used car dealers are still in the state of "cash king", and the proportion of development funds obtained through banks and financial institutions is relatively small. At the same time, the dealer companies with the best profits and the highest losses are dealer companies that use their own funds. Therefore, in Luo Lei's view, in the current situation of optimizing the operating environment, whether to choose to use its own funds or choose to use mixed funds is a problem worth thinking about by the majority of second-hand car dealers.

From the perspective of inventory management of operating indicators, the survey data shows that most of the second-hand car dealers with the best profitability are in the range of 10 to 30 vehicles. "Through comparison, it can be found that the smaller the inventory, the easier it is to make a profit." Luo Lei said.

Attaching importance to brand enterprises has a long way to go

With the development of the used car industry and the establishment of industry norms, used car operators are paying more and more attention to brand building and brand value.

From the complaint dimension data, 97% of second-hand car dealers were complained about less than 5 times, 2% of the enterprises were complained about 5 to 10 times, and the enterprises that were complained about 10 to 20 times were abnormal enterprises in the industry, accounting for 1%.

From the perspective of providing test report services, 42% of the second-hand car operators provide third-party test reports, 30% of the enterprises do not have test reports, and 18% of the enterprises provide self-inspection reports and 10% of the enterprises provide third-party certification.

Luo Lei believes that from the two dimensions of the "Report" survey, it can be seen that the current development of the second-hand car industry tends to be standardized, the service is gradually improved, and most second-hand car dealers can provide consumers with test reports on vehicle condition information.

With the increase in car ownership year by year, the landing of second-hand car-related policies, and the increasingly optimized business environment of the second-hand car industry, the survey shows that the distribution model has gradually become the mainstream model chosen by second-hand car operators.

The data shows that the proportion of conversion from self-employed households and brokerage companies to distribution companies is increasing, 40% of second-hand car operating enterprises have changed from the original brokerage model to distribution mode, 19% of enterprises plan to switch to distribution mode, indicating that they will maintain the status quo and do not change their business model.

After experiencing the downturn in the industry after 2018, most used car operators have increased their after-sales service, and their profitability has gradually improved. The data shows that during the severe period of the epidemic in 2020, 37.5% of used car operators achieved profitability through after-sales service.

Luo Lei said that most of the operating income of the second-hand car dealers surveyed is relatively small, and the annual income is concentrated below the level of 1 million yuan. In 2020, companies whose sales fell year-on-year accounted for 84% of the total, and companies with an overall decline of more than 10% accounted for 62% of the total. It can be seen that due to the impact of the epidemic and other factors, the overall industry situation of used car dealer companies last year was not very good.

In 2020, 80% of used car operators operated smoothly, and the data showed that 50% of used car dealers were profitable, 32% of enterprises were flat, and the proportion of enterprises that clearly stated that losses was 18%.

For the development of second-hand car dealer enterprises, Luo Lei put forward five suggestions, one is to do a good job in strategic planning, the second is to grasp the industry trend, the third is to pay attention to innovation and development, the fourth is to do a good job in enterprise positioning, and the fifth is to keep up with the industry trend. (International Business Daily Wang Xuguang)