Dealers temporarily breathed their breath due to the lack of cores in the main engine factory, and they were vigilant against the recurrence of the price war in the future

In recent years, the auto market has been fiercely competitive, dealer knockouts have intensified, and high inventory and losses have become the norm for some dealers. However, in the past 2021, due to the shortage of chips, the pressure on dealer inventory has been greatly reduced, and some dealers even think that this is the best year in recent years.

Data released by the China Automobile Dealers Association shows that from June 2021, the dealer inventory index began to fall below the warning line. The inventory coefficient is between 0.8-1.2, reflecting that the inventory is within a reasonable range; the inventory coefficient is greater than 1.5, reflecting that the inventory has reached the alert level; the inventory coefficient is greater than 2.5, reflecting that the inventory is too high, and the operating pressure and risk are large. From June to November last year, the average inventory level of dealers was less than 1.5, which was lower than the inventory coefficient of the past two years.

"Without a chip shortage, dealers would be much harder off than they are now." The automobile market is becoming more and more saturated, the overall demand is declining, the chip shortage has given dealers a shot in the arm to continue to live, at present, the dealer inventory pressure and profitability level are generally good. In this case, it is necessary to predict the form and avoid returning to the light. When the supply of chips is restored, it is likely to fall into a price war. Dealers should use this buffer period to explore the transformation to future service providers and improve the stickiness of users. Chang Legui, chief data officer of Zhuosi, recently told the first financial reporter.

In Chang Legui's view, car dealers have gone through three stages, the first stage of staking land and expanding vigorously, which is accompanied by the rapid development of China's auto market; the second stage from 2015, with the gradual stabilization of the car market, dealers began to differentiate, some dealers sold cars losses, mainly relying on after-sales business and derivatives to obtain profits, dealers' business also began to diversify; the epidemic accelerated the arrival of the third stage, dealers began to digitally transform.

According to the "2020-2021 China Automobile Circulation Channel Development Report" released by the China Automobile Dealers Association, the number of authorized dealer networks in china fell to 28,000 in 2020, down 5.8% year-on-year. In 2020, the domestic auto market withdrew a total of 3920 4S stores, with an average of more than 10 exits a day. Among them, there are 2375 dealers who have withdrawn from the network due to poor management of car companies, the proportion is 61%, and there are also dealers who have switched to other brands. By brand, among all the 4S stores that have withdrawn from the network, the proportion of independent brands has accounted for up to 61%, the proportion of joint venture brands is 34%, and the proportion of luxury brands is 5%.

The industry believes that the contradiction of excessive release of automobile production capacity, relatively insufficient market demand and insufficient ability of dealers to operate services are the main reasons for the difficulties of dealers. In this case, there are also some chaos in the automobile sales industry, including dealerships to mark up products, bundle sales and high maintenance costs. In addition, the car sales model began to change, dealers in the digital transformation at the same time, Tesla's direct model also led to the emergence of a new retail model. At present, the new car-making forces are using the direct operation model, and traditional car companies are constantly exploring the retail model.

"At present, the automobile sales industry has the phenomenon of buying cars for a long time, dealer price increases, opaque prices, expensive car repairs, and parts that do not know whether they are true or false, which are all superficial problems, and the root cause is that with the fierce competition in the automobile market, the drawbacks of the authorization franchise system are exposed, and gradually come to the end of the life cycle." Chang Legui told reporters that dealers under the franchise system of brand authorization are not completely the product of marketization. On the one hand, the auto market is becoming more and more competitive, and dealers are accustomed to lying down to make money, and they do not have the ability to build their own to make money. On the other hand, for automotive OEMs, it is impossible to ignore dealers from the perspective of economic development and social responsibility. What kind of retail model will be adopted in the future, so that OEMs and dealers can complete their respective role transformations without sacrificing the consumer experience, which is the biggest challenge at present.

In the exploration of new sales models, some dealers have appeared to be dissatisfied. Taking the Volkswagen brand ID series as an example, the Volkswagen brand has innovatively adopted the agency system model on the basis of the original 4S store channel, and the ID series adopts a national unified price, and the agent price is consistent with the official website. This model of fixed production by sales can solve the problems of pressure storage and asymmetry of supply and demand information that have long been criticized by the 4S store model. However, in this model, there are still agents who privately reduce prices, and an internal document has been exposed on the Internet showing that SAIC Volkswagen has severely punished dealers who make price reduction posters for Volkswagen ID models.

In the new model of electric vehicle marketing launched by traditional brands, why can't the price of vehicles be unified? Oliver Wyman Managing Partner Zhang Junyi pointed out that under the agency system, the maintenance system and insurance system will slowly separate from dealers, agents only earn vehicle agent sales commissions, coupled with the new brand of agents inevitably have to invest more energy in market development, especially this year, encountered chip shortage, insufficient vehicle supply, agent sales are blocked, and profitability will inevitably deteriorate. Agents to ensure revenue, must expand sales to get more commissions, so it is not excluded that agents in order to increase sales and use more discounts to attract consumers. But whether this offer is cash or other forms, it has touched the manufacturer's original price system. The purpose of the manufacturer's implementation of the agency system is nothing more than to make the agent more focused on vehicle introduction, customer consultation, test drive, delivery, replacement and other customer services. If only preferential treatment is used to attract consumers, it will return to the vicious circle of "price war", deviating from the original intention of the agency system, so whether the ID. series can hold the price also means that the agency system can be successfully promoted in China.

"Fuel brands should not copy the marketing model of new energy, and new energy has no baggage." But 4S stores are responsible for the cars sold, for example, if models that are more than 5 years old are no longer repaired, there will be a series of chain reactions, such used cars will depreciate sharply, the brand premium will fall, and new cars will not sell well. Therefore, it is impossible for fuel brands to copy the model of new energy. The success of the new energy direct operation model lies in price transparency, but fuel brands do not necessarily use the direct operation model to solve price transparency. The reason why some dealers will increase the price of the product is because the profit distribution model is not clear, the dealer provides the corresponding service, to the manufacturer to do delivery, provide venues, provide car guidance, etc., if these can be priced, the problem will be solved. Chang Legui told reporters that the traditional distribution model is no longer suitable for the development of the automotive industry, but it is impossible to make all 4S stores disappear. The future retail model is not direct operation, but fragmentation. Now the function of the 4S store is too large, the sales function, display function, experience function, after-sales function, information feedback function in the 4S store should be separated, according to the scene of customer needs to redefine the scope of service, cooperation mode and profit model, the 4S store function of the segmentation and fragmentation is a direction of the future way out. At the same time, it is necessary to respect the objective market law, the authorized franchise is a 4S store can only sell one brand of cars, the efficiency is low, and the form of brand alliance can be considered in the future.