Author | Gary
Two years ago, some industry insiders predicted that 10,000 4S stores would be eliminated within five years.
At present, the number of 4S stores in the country is less than 30,000, and if this prediction comes true, it means that the number of 4S stores will be cut by one-third.
What are the facts?
The auto service world sees from the data on Tianyancha that there are 1944 car dealers in the country in 2021, which is 161 more than 1783 in 2020, and the speed of cancellation is further accelerated.
In addition to the data, in the past year, there has also been a bit of negative news about 4S stores.
At the beginning of last year, a number of brand 4S stores retreated from the network, more than a hundred 4S stores were named by 315, Honda, Mercedes-Benz and other OEMs tried to cancel the 4S shop model, and the multinational automobile dealers association publicly boycotted the OEMs...
4S stores, is accelerating the demise in the Chinese market?
Nearly 2,000 4S stores will be written off in 2021
In the professional version of Tianyancha, auto service world according to the keyword "auto sales service", the registered capital of more than 5 million, the cancellation time from January 1, 2021 to December 31, 2021, these conditions search.
The results show that 1944 car dealers wrote off last year, and this figure is infinitely closer to 2000.
Searching again according to the same criteria, we will find that since 2016, the number of car dealership cancellations has shown a significant increase in each year.
As you can see in the chart below, the first time in 2018 exceeded 1,000, since then, more than 1,700 for three consecutive years, and in 2021, it has created a historical peak, compared with 398 five years ago, an increase of nearly 400%.
Look at the logout data for the year from several other dimensions.
The first is the regional distribution of provinces.
Shandong Province ranked first with 236 companies, with a proportion of 12.14%, followed by Anhui Province, Henan Province, Jiangsu Province, Zhejiang Province and Guangdong Province, which are also 6 provinces with more than 100 cancellations, accounting for a total of 48.6%. Last year, there were also 100 in 6 provinces, accounting for 46.3% in total.
In addition, there are 15 provinces with more than 50 cancellations, mainly in the east, south and central region, and 19 provinces with a number of no more than 50 cancellations, mainly in the west and north.
Overall, the distribution is similar to last year.
The second is the time of establishment.
As you can see from the chart below, more than 58% of enterprises are established for 1-5 years, that is, 2016 at the latest. More than half of the 4S stores have been deregistered in less than 5 years, which also shows that the living environment of 4S stores is relatively harsh.
In addition, car dealers established for 5-10 years account for more than 27%; more than 10 years account for a total of about 11%. This shows that the longer the operation time, the stronger the viability.
The third is the survival time.
The proportion of 4S stores that survive for 1-3 years and 4S stores in 3-5 years is about 29%, which basically coincides with the above establishment time. 5-10 years and more than 10 years are also similar to the above data. This shows that the competitiveness of investing in new 4S stores is not as competitive as the old 4S stores.
Finally, let's summarize based on the charts above.
First, the number of 4S store cancellations is on the rise year by year, and it is basically around 2,000 per year.
Second, the number of cancellations in the east, south and central is higher than that in the west and north, of course, this is also related to the regional 4S store base.
Third, more than half of the 4S stores survive for 1-5 years, and the survival time is not long.
Fourth, the competitiveness and vitality of the new 4S store (within 5 years of establishment) are significantly less than those of the old 4S store (more than 5 years old).
Turbulent 4S dealers
In the past 2021, in the Chinese market, 4S stores have never been so turbulent, and this turmoil is not an isolated case in the market, behind which there are some factors that shake the fundamentals.
First of all, in February last year, the China Automobile Dealers Association released a report on the survival of automobile dealers, showing that only one-third of car dealers completed the sales target for the whole year.
Moreover, in 2020, there were 3920 dealers withdrawn from the network, more than 10 per day, and the number of new ones was only 2181, which was the first time that the number of authorized 4S dealers in the country had negative growth.
Then, in early March, within half a month, SAIC MG, Chery Jetto, Changan Automobile, Volvo and other OEMs were exposed to the "4S shop return to the network storm", and related complaints involved new car sales, renewal deposit refunds, and maintenance and other links.
During the 315 period, more than 100 dealers of Zhengtong Automobile were pointed out that all of them installed face recognition cameras in the store to obtain customer information, and they were directly named by CCTV, and gave the operation of the 4S store a head-to-head drink.
In July, Honda and Mercedes-Benz announced that they would try to cancel the 4S store model. First honda Australia announced that from July 1, the current authorized car dealers can not sell new cars, customers can only book from the manufacturer's official website, the new car unified retail price. In addition, Mercedes-Benz also announced that it may follow up similar policies in Australia from 2022.
In fact, since the second half of 2020, Mercedes-Benz, Volvo, Volkswagen and other OEMs have tried the direct sales model.
At the level of domestic after-sales policies, there is also news that is not conducive to 4S dealers.
In August, the State Administration for Market Regulation issued the "New Three Guarantees" policy, which, in addition to adding new provisions on "new energy vehicles and new energy after-sales", also changed the content of maintenance channels.
The New Deal clearly points out that operators must not restrict consumers from independently choosing enterprises that maintain and maintain household automobile products, and use them as a reason for refusing to bear the responsibility of the three guarantees. In other words, the era of "you can't enjoy three packs without 4S shop maintenance" has passed, and 400,000 repair shops have benefited from it.
In the case of internal and external difficulties, the originally balanced OEM-4S shop relationship cracked, and the latter began to fight back against the OEMs.
In the second half of last year, dealer associations in many countries, including China, France, germany and other countries, recently collectively spoke out, believing that "in the process of the layout of new car distribution models such as direct sales, direct sales and agency system of OEMs, the interests of dealer groups have been ignored or harmed." ”
The main points of complaint of the Dealers Association are:
First, the change measures of the main engine factory are too sudden, resulting in the dealer group being too late to respond;
Second, OEMs often try to change the terms of sale, putting dealers at a disadvantage;
Third, the direct sales model promoted by the main engine factory has harmed the interests of dealers.
The above incidents occurred in just one year, and the policies issued by OEMs and the national level have brought irreversible damage to 4S stores.
The darkest hours of the huge, Rundongs
In addition to macro policies and data, in the past few years, large dealer groups such as Huge, Rundong, and Zhengtong, once market predators, have encountered serious crises, even to the point of bankruptcy and reorganization.
The vast experience is probably best known to industry professionals.
In 2021, the huge group also ranked first in the list of the top 100 automobile dealers with a turnover of 53.8 billion yuan, and officially landed on the A-share market in April 2011.
In 2019, Huge was deeply involved in the whirlpool of bankruptcy and reorganization, and officially entered the reorganization process at the end of the same year, during which Pang Qinghua resigned as the chairman of the company, the chairman of the strategic committee of the board of directors and the general manager.
At that time, the announcement of the "progress of reorganization" showed that a total of 286 creditors declared their claims to the administrator, with a total declaration amount of 24.699 billion yuan.
Following the huge, in August 2020, Rundong, a former top 100 dealer group, was also applied for bankruptcy reorganization by creditors due to the problem of arrears. Prior to this, Rundong filled the gap in cash flow by selling 50 4S stores.
Also in 2020, Zhengtong was also exposed to have a $100 million installment loan default, and many Zhengtong 4S stores could not pick up the car, which obviously also suffered from a serious capital chain rupture.
The darkest hours of these dealer groups are related to aggressive expansion strategies, internal management, and market environments and development trends.
Some industry insiders believe that the main reason for the encounter between dealer groups and 4S stores in recent years is that traditional 4S stores and 4S groups are resource enterprises bred under the traditional automobile sales management methods.
After the introduction of the new automobile sales management measures, as well as the background of the comprehensive transformation of the entire automobile market, many 4S stores and 4S groups have no way to keep up with the pace of history.
This is still a confirmation of the view in business: the resources that once supported you will also become your shackles.
4S shop accelerated elimination,
400,000 repair shops are strong
In the case of new energy vehicles impacting traditional channels and OEMs exploring direct sales models, it is reasonable that 4S stores, which are backed by resources, encounter greater challenges.
Although some large dealer groups rely on expansion strategies and still grow in terms of revenue and profitability, in general, it is difficult for small and medium-sized dealer groups that account for the vast majority of market share to use high leverage such as finance and real estate to resist the general trend of the industry.
The accelerated elimination of 4S stores is not a joke.
In fact, regarding the elimination of the automotive aftermarket, several years ago, there were industry leaders who predicted, "In three or five years, 400,000 repair shops will be eliminated by half." ”
Looking back at these statements now, the current 4S stores are accelerating the elimination of the situation, and the number of repair shops is increasing.
On Tianyancha, auto service world searched for the keywords "auto repair" or "auto service" and found that there were more than 13,000 newly established and active enterprises last year, while no more than 10,000 companies were cancelled or revoked, which means that 3,000-4,000 repair shops were added a year.
From the industry level to observe the phenomenon, although the past year many repair shops in the operation of the situation is not very good, but due to the cost control, most of the repair shops are still in a relatively strong state, even if the final transfer, the probability of taking over the investment is still to continue the original business.
There are also cases of come back to life through new business strategies after the transfer, such as the post-95 store manager of Meifu Automobile reported by auto service world last year, Ah Trench, who has achieved a turnaround by re-positioning the store to achieve a profit.
Compared with the bloated 4S system, the workshop is more flexible and constantly smooths out the gap with the 4S shop.
There are several aspects, one is that resources such as original parts are becoming more and more open, the second is the use of tools such as systems, the third is the blessing of Internet infrastructure such as Douyin, and the fourth is the attention and mining of young operators to private domain traffic and build their own service circle.
In the past few years, the share of the 4S system in the aftermarket has dropped from 70% to 65%, and the cake distributed by independent after-sales has become larger and larger.