There will be more dealer investors who want to loosen the shackles from the 4S model, strip away the "baggage" of new car sales, and obtain various after-sales service authorizations with the role of "service provider" - the main engine factory will do a good job of "interaction and transaction" with the owner, and the service provider will do a good job of service "delivery", which is a better arrangement for both sides.
Author 丨Liuyi
Please indicate the source: AC Auto (ID: acqiche)
Once again, the 4S store is on the cusp of the storm.
A few days ago, according to the German media "Autohaus" reported: BMW Group or will cancel the MINI brand in the German market authorized dealer system from 2024, BMW brand or from 2026 to cancel the authorized dealer system, and will use a new agency model to sell new cars in the future.
The relevant person in charge of the BMW Group also expressed his position on this decision when announcing the sales volume in the first quarter of 2022: "For the European region, we believe that the future belongs to the pan-European agency (sales) model. We focus on tight customer loyalty and delivering a seamless, high-quality customer experience both online and offline. ”
This means that another car company has publicly stated that it will cancel or change the "4S store" model.
In fact, in July 2021, Honda announced that it would cancel the "4S store" model in Australia, and the new car would be uniformly retailed, and customers could only book from the official website. Mercedes-Benz then said it would launch a similar business model in January 2022, and Volkswagen sub-brand Cupra will follow suit.
As mainstream car companies have announced plans to change the traditional sales model, the topic of where 4S will go has once again become a hot topic of industry controversy.
So, is the value of 4S really decaying? Why are OEMs eager to change channels?
Two sets of alternatives
Cancel the traditional dealer model, OEMs have roughly two alternatives: one is to implement the agency model, and the other is the direct operation model.
Bmw Group said in the channel adjustment statement that it will implement the agency model in Europe, but the specific details were not disclosed. The statement emphasized that BMW evaluates changing customer expectations, continuous digitization and the expansion of online sales on the Internet, and hopes to provide the highest quality customer experience with partners, and future dealers will continue to be the backbone of BMW's sales success.
Mercedes-Benz is a representative of the direct operation model and gives a specific plan.
Quoted in April this year, the German Manager magazine reported that from 2023, Mercedes-Benz will carry out direct sales models in Germany and the United Kingdom; it plans to reduce the dealer coverage area in Germany by about 15% to 20% by 2028, and will transform the digital sales model.
According to the plan, mercedes-benz dealer outlets and coverage areas will be reduced in the future, and offline outlets will be concentrated in the center of the metropolis and attractive locations in order to show new models to consumers. At the same time, as a supplement to the "digital display window", the online store has begun to operate.
According to the report, Mercedes-Benz's digital transformation of sales is another revolution in addition to the "electrification platform transformation". Mercedes-Benz hopes to increase the profit of bicycle sales through the new direct sales model.
Undoubtedly, the direct operation model has the greatest impact on the 4S store model. In particular, Tesla, Weilai and other new car-making forces have gained a large number of loyal users in the direct operation model, which has also made many traditional car companies extremely popular and have followed suit.
Anxin Securities analysis believes that Tesla's direct sales model bypasses the middleman (dealer), directly obtains customer data information and feedback, and adjusts the product in time to make it more suitable for customer needs, which can improve the competitiveness of the product and the user's recognition of the brand. Moreover, the direct sales model of "first pay and then deliver" and "on-demand production" not only effectively reduce the cost pressure caused by vehicle inventory turnover, but also alleviate the financial pressure.
The Fall of 4S Mode
Looking at the long-term dimension, the 4S model is only a product of the times. In the era of digitalization and intelligence spawned by the mobile Internet, the 4S model has three major challenges: market universality, efficiency and cost structure.
Since the birth of the first domestic automobile 4S store in 1999, in the following 22 years, the number of domestic 4S stores has increased to more than 30,000, an average of more than 1,300 per year.
As we all know, the so-called "4S" refers to sales (Sale), spare parts (Spare part), after-sales service (Service), information feedback (Survey). Looking further, the first three tangible "S's" are all related to transactions and delivery methods, and intangible information feedback (Survey) is the interaction between brands, 4S and users.
With the rapid development of the mobile Internet, the new "information feedback" model such as digitalization and intelligence is the main reason for the change of the 4S model - this is the same as the trade (transaction) in human history from the rush between villages, to cross-regional transnational trade, to e-commerce and live streaming with goods model, information transmission efficiency is getting higher and higher, and the transaction mode has become more and more efficient.
Before the in-depth penetration of the mobile Internet, information transmission mainly relied on centralized layer-by-layer penetration, and the main engine factory relied on the carrier of 4S to collect and feedback user information, brand influence and marketing penetration, so as to achieve low comprehensive cost and maximum efficiency.
However, with the gradual popularization of vehicle intelligence and digitalization, OEMs can obtain vehicle condition information from intelligent on-board systems and user information from brand APP. This means that OEMs can rely on more and more vehicle and user data to disassemble and combine the previously centralized sales, spare parts and after-sales service according to local conditions, and more flexibly adapt to the different needs of China's multi-level market.
Correspondingly, the cost of building tens of millions or even hundreds of millions of stores and greater operating costs are becoming more and more out of date under the external environment of slowing down or even negative growth in new car sales (4S stores are therefore difficult to sink). In the case that 4S selling new cars is difficult to make money or even lose money, the price chaos of new cars and after-sales minor illnesses have become a problem that 4S has been criticized; it has also affected the car purchase experience of car owners and hurt the brand image of the main engine factory.
The bad experience of 4S at both the pre-sales and after-sales ends has also made its own situation more and more embarrassing: in the whole year of 2020, about 11 4S stores will close and withdraw every day.
Change and challenges
"The traditional Chinese 4S store model will still dominate the market in the next 5 years, but it is expected to be replaced by various more flexible models."
Cui Dongshu, secretary general of the National Passenger Vehicle Information Joint Association, believes that although the development of direct sales channels for new energy vehicles is still in its infancy, with the addition of baidu, millet and other technology companies as "new new forces" for car manufacturing, the marketing channels of automobiles will become more diversified and rich, and consumers will be able to enjoy more high-quality car services and car experiences.
Lang Xuehong, deputy secretary-general of the China Automobile Dealers Association, also believes that the conclusion that the new retail model replaces traditional dealers is premature. She believes that the bottlenecks encountered by the traditional distribution model are not all 'innate' and can be changed with the trend.
Most dealers in the new car sales business is difficult to make money, but also to invest the most money and human resources to do "thankless" things, money-making after-sales service to rely on the "4S" model bundling to obtain authorization. In the future, there may be more dealer investors who want to loosen the shackles from the 4S model, peel off the "baggage" of new car sales, and obtain various after-sales service authorizations with the role of "service provider" - the main engine factory should do a good job of "interaction and transaction" with the owner, and the service provider should do a good job of service "delivery", which is a better arrangement for both sides.
In fact, with the rise of new retail formats such as the direct operation model, the traditional car dealer group with 4S stores as the main model is also seeking change.
The head dealer group continues to optimize the brand structure, continues to deepen the luxury car market, and strengthens the layout of after-sales, second-hand cars and other derivative businesses; explores online and offline marketing models in the front end of the sale, providing car owners with online car viewing, online car purchase and other ways; and timely obtains user needs through digital means at the back end of the sale to optimize the user maintenance experience.
Although the direct operation model of car companies has not yet been fully rolled out in the Chinese market, the series layout launched by 4S for future changes may have a greater impact than opportunities for more independent after-sales companies in difficulties.
Reference article: Daily Economic News, "Car-making new force shopping mall directly sells cars, no middlemen earn the difference, how long can the 4S store model live?" 》
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