Text | Xu Cheng
In the evolution of business, distributors are a species born based on changes in the retail industry, brand characteristics and competitive factors, and are a key link between producers and consumers, whose value lies in creating information, facilitating transactions, and reducing transaction costs.
In the 20 years since cars entered the home, car dealers have played an important role. However, in the past two years, the automotive marketing channel model led by authorized operation is changing, and the models of brand direct operation, agency and direct operation + agent have been continuously landed, and the channel model has begun to be enriched.
So, will the traditional licensing business model be replaced in the future? What kind of changes will be ushered in in the field of automobile circulation? To this end, we exclusively interviewed Shen Jinjun, president of the China Automobile Dealers Association, and conducted an in-depth discussion on the changes in the current automobile sales model.
Shen Jinjun, president of China Automobile Dealers Association
In Shen Jinjun's view, whether it is direct operation or agency, it is not a new thing in the automotive industry. Before the 1980s, car sales were official, using direct sales. With the gradual increase in the category of automobiles, the demand for car purchases increases, and the direct sales outlets of manufacturers cannot be supported, so since the eighties of the last century, automobile associated companies have been established one after another, and there are multiple automobile factories under the main body of an associated company, so at that time, it was not sold by brand, but by associated companies as a unit, with assets as the link, benefit sharing, and risk sharing.
By 1995, the automobile sales model had been further reformed, and the Ministry of Domestic Trade began to implement a commission agency system for automobile sales. Later, car sales began to no longer be based on the manufacturer as the target, but changed to a four-in-one sales store with the brand as the target, that is, the 4S store. In 1999, with the opening of The first 4S store in Guangben, the automobile licensing business model represented by the 4S store officially began, and Guangben became the first practitioner of automobile licensing operation.
The reason why the domestic auto commission agent sales have not been continued is because the manufacturer needs to bear the inventory, and today's authorized operation is actually an agent, which can be understood as a "buyout" agent, the inventory is borne by the dealer, and the dealer serves the manufacturer's brand, so this model has continued to this day.
In the past two years, in order to meet the new consumption habits of consumers, European Volkswagen brands began to sell cars not only in 4S stores, but also on the Internet, delivery is still in 4S stores, this way of selling cars has subsequently begun to be implemented in China, and the commission agency model has been reawakened. In addition, with the gradual increase of new energy vehicle direct sales stores, the automotive industry has entered an era of diversified sales models.
Why is the new sales model emerging?
SG-Auto: Is there a causal relationship between the rapid development of new energy vehicles and the new sales model?
The key language - manufacturers are not willing to only do production
Shen Jinjun: The two are related, but they cannot be defined directly in this way. For the new sales model, Tesla is a pioneer. In 2003, Tesla turned out to be a surprise, in addition to the product to bring people a refreshing, more importantly, the choice of direct sales model, but direct sales in the United States has been controversial, until now, Tesla in a few states still can not be directly sold.
In China, Tesla also uses direct sales, and sales are very good. Frankly speaking, it cannot be said that Tesla has been fully successful, Tesla is also making some adjustments, such as returning to the car business circle, and it can only be said that the brand is on the road to success.
In addition, with the development of science and technology, today's information is more and more transparent, automobile manufacturers are not willing to be only a production enterprise, to transform into a travel service provider, the main body of travel is people, in other words, manufacturers to understand consumers, the way of direct operation can directly reach customers, coupled with Tesla's exemplary role, the direct operation model has begun to appear more and more.
SG-Auto: How do you see the relationship between the direct operation model, the agency model and the licensing operation?
Key words - the cultivation of consumer habits is not a one-sided force, a day's work
Shen Jinjun: The agency model also belongs to a kind of direct operation. Now the mainstream car distribution model we call it authorized operation, and 4S is a format, not only authorized to do 4S stores. But the reason why the authorized operation chose the 4S format is because the automobile management system not only needs to sell, but also needs service.
We see that in the face of consumer goods, in addition to the car is difficult to find sales and service integration of goods, such as televisions, refrigerators, washing machines and other types of household appliances, as well as mobile phones, computers, coffee machines and other daily applications of goods, sales and services are separated, once the use of products has a problem, consumers can query the list of authorized service providers of the manufacturer, to the service provider to repair.
The car is a special commodity, the commodity attributes of the car determine its sales model, the combination of sales and after-sales service, with four in one (sales, accessories, after-sales service, information feedback) in order to be able to provide customers with the best service.
The biggest contribution of 4S stores to China's auto industry is to cultivate consumer habits, and the first choice for buying a car is 4S stores. Today's new cars are mostly sold through 4S stores, and the vast majority of customers during the warranty period are also provided through 4S stores, which is not easy to do. The new sales methods derived today will take at least a certain amount of time to cultivate the habits of consumers.
SG-Auto: We see a lot of auto direct sales stores open in supermarkets, is the most suitable place for the direct sales model to land is the supermarket?
Key words - the purpose of entering the supermarket is more to show the brand
Shen Jinjun: Everyone finds that it seems that to do direct sales of automobiles, you must get a supermarket, which I personally think is a paradox. Taking Tesla as an example, the purpose of Tesla entering the supermarket is not only to sell cars, but also to reflect its brand value.
Today Tesla is slowly withdrawing from the supermarket, because the brand has become a household name, and it is no longer necessary to spend as much money as in the past to show the brand in the supermarket. After the ownership is large, it also needs after-sales service, so this brand began to consider entering the automobile business circle.
SG-Auto: What are the main factors underpinning the current direct vehicle model?
Key words - to see the traditional car companies and new car companies each have different development trends and driving forces
Shen Jinjun: For the new car manufacturers who adopt the direct-operated model, they have no channels from the day they were born, so there is nothing wrong with what kind of channels these brands build, whether they are successful or not, it is an attempt. But we also see that whether it is Tesla or Wei Xiaoli, their direct operation is supported by a large number of marketing expenses, which is the traditional car companies can not play, and the new car companies have the support of capital behind them. Capital looks more at the future, believing that the future of these enterprises is promising, and the cycle of return on investment in the capital market is completely different from that of traditional enterprises.
SG-Auto: Do you agree that the direct model will subvert the existing model and become mainstream?
Key phrase - diversification
Shen Jinjun: We see that today's Wei Xiaoli, in fact, each family's model is different, Weilai takes the direct operation route; Xiaopeng adopts the method of direct operation + authorization, both direct operation and authorization. Personally, I am not against the new business, but I do not think that the original licensing business model will all be transformed into another model. The future automobile circulation mode and circulation format must be diversified development, and multiple models coexist.
Manufacturers and distributors under the mode adjustment
SG-Auto: Some traditional joint venture car companies are planning to adjust the sales model of some of their products.
Key phrase - we must be cautious about the adjustment of the Chinese market
Shen Jinjun: All along, the organizational structure of traditional OEMs from top to bottom is built according to the authorization system, and in the case of unchanged organizational structure, when the business model is adjusted, the resistance from within itself must be very large. For traditional car companies, to make such a change, we must first adjust the organizational structure, the top is unchanged, only from the bottom to change is not enough.
From another point of view, China is the largest market for these joint venture brands, and once there is a problem in this market, it is difficult to clean up, so my view is that I am not opposed to the adjustment of the sales model, but the adjustment of the Chinese market must be cautious.
SG-Auto: Mercedes-Benz and Honda have announced that they will adjust their sales model in Australia in 2022, from the original authorized operation to the agency system. Not long ago, the lawsuit between australian dealers and Mercedes-Benz over the new sales model caused, and Mercedes-Benz was attacked by Australian law. What do you think of the impact of this event?
Key phrase – This matter involves fairness and has a great impact on the local social level
Shen Jinjun: Although this matter appears to be a market behavior in the commercial field, there is a social problem behind it. Although Australia's Mercedes-Benz and Honda systems are much smaller than those in China, they also involve a large number of employed people, and there are families behind these people, if they adopt this method, the impact on them is very large, which is equivalent to abandoning them, which is unfair to them first.
Second, many local car dealers are family businesses, and they have been operating this brand since three generations ago, not only paying a lot of effort on the brand, but also spending a lot of money on investment. In such a situation, if the OEMs simply abandon the dealers, I believe that any government will intervene.
SG-Auto: Dealers and manufacturers have always been weak compared, in today's car electrification trend and changes in car sales models, how should traditional authorized dealers adapt to the development of the times?
Key words - change is not separated from its people, to be people-oriented, to improve efficiency around service
Shen Jinjun: In fact, I also have a question: is it only the way of direct operation to sell electric vehicles? In other words, does the licensing system sell electric vehicles well? The change of sales model is actually the behavior of the main engine factory, the dealer does not have the desire to take the initiative to change, nor does it have the ability to take the initiative to change, the dealer has invested a lot of time and money for the manufacturer's brand, but in the process of change is indeed passive.
At this year's Guangzhou Auto Show, the CEO of a manufacturer said very well, he said that first, we should pay attention to the profitability of dealers; second, manufacturers should work with dealers to improve efficiency through digital transformation. I strongly agree with that.
So what are dealers going to do now? First of all, we must improve the efficiency of our own services. In the future, the core point of measuring the success of the channel is to improve customer experience and satisfaction, and it is indisputable that everything is inseparable from others. The second point is efficiency, under the premise of sustainable cost, who is highly efficient, who can go on in the long run.
SG-Auto: At the Annual Meeting in Haikou, dealer associations in many countries spoke out about the new car sales model through video, which roughly summarized two points: one is to restrict the behavior of manufacturers that do not conform to the principle of reasonable competition, and the other is to protect the interests of dealers. Under the new sales model, how do you think manufacturers should balance the interests of dealers?
Key phrase - oppose unilateral change and endorse joint consultation
Shen Jinjun: For manufacturers that originally had channels, if they gave up the original channels when selling products, it is obviously not a wise move. We oppose manufacturers to unilaterally change the sales model, and I believe that the government department will not be indifferent in such a situation. However, if the change in sales model is the result of joint consultation between the manufacturer and the dealer, we are approved, provided that the dealer accepts such a change.
I agree with some traditional brand manufacturers, that is, the channel is the competitiveness of the brand, the dealer is the strategic partner of the brand, and the main engine factory should give full play to the advantages of partners and channels. Therefore, manufacturers and dealers must work together, and should not unilaterally and disregard the existing interests of dealers to promote new sales models.
SG-Auto: Can you summarize that in the licensing model, where is the value of dealers?
The key phrase - artillery bombardment positions, complete victory by infantry
Shen Jinjun: There is a classic line in the movie "Southern Expedition and Northern War": cannons cannot be bayoneted, and it is up to infantry to solve the battle. Extending this sentence to the automotive industry, artillery is the manufacturer's sales company, manufacturers do marketing, equivalent to first bombarding the front position with artillery, and then the 4S shop is the infantry, the infantry is to solve the battle, complete the last kilometer, deliver the vehicle and provide service.
The authorization system has been proven successful for many years, it is not a decaying system, even if the authorization system has various defects, it has gone for more than 100 years of history, and has the ability to repair itself at every stage, because the authorization system is jointly built by manufacturers and dealers, it is an upstream and downstream relationship of the supply chain, and its brand attributes are too strong. If you let a third party do sales and service, it is difficult to do a good job without the full authorization of the manufacturer.
Therefore, the car brand can have today, the role of authorized dealers is self-evident, the quality of brand development and dealers are closely related to the dealers, manufacturers and dealers perform their duties. Manufacturers directly to do sales, in fact, there is a problem of efficiency, especially after the product sales are large. This is also the value of the dealer's existence.
epilogue
In Shen Jinjun's view, in today's ever-changing automotive industry, the automobile sales model has both a "change" side and an "unchanged" side. "Change" is the way of sales, changes in the industry environment, changes in development trends and changes in consumer consumption habits, making new sales models come into being, which is caused by changes in market development. However, "change" is not the same as subversion, and the future automobile sales model will be diversified and multi-format development. What is "unchanged" is the authorized business model, which will always exist, and the service of dealers to customers remains unchanged, and the value of channels for manufacturers remains unchanged. This is also the result of the development and evolution of the automobile circulation system.
WeChat public number: used car wisdom Pan Pan (id: carman228)
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