The Blue Book Forum on Automobile Circulation answers three major questions

Author | Jia Weizhong

Source | Car selection network

In the past two years, the transformation of the automobile industry has superimposed on the fluctuations of the epidemic, the upstream OEMs have transformed in difficulties, and the downstream channels have changed under heavy pressure.

Data from the China Automobile Dealers Association shows that at the end of 2021, the number of 4S sales and service networks in the country was 29,318, although the year-on-year increase was 3.9%, but the number of withdrawals from the network was as high as 1,379, which meant that the elimination of the channel side was extremely fierce.

At the same time, under the trend of intelligent electrification of automobiles, the overlapping and vague models of authorization, agency and direct operation, and the decline in the number of automobile supermarkets, where will the channel reform go in the future?

On April 27, the 2022 Blue Book Forum of the Automobile Circulation Industry, Lang Xuehong, deputy secretary general of the China Automobile Circulation Association, made a comprehensive analysis.

Will sales meet expectations this year?

Last year, China's auto market ended three consecutive years of negative growth, and the industry is full of confidence in continuing to grow this year. However, the epidemic situation in many places rose in March, and the production and sales of automobiles in April were seriously affected, and the doubts from the channel side were: Can sales meet expectations this year?

In the long run, the ceiling of China's car ownership is 500 million, and the sales ceiling is about 40 million. Lang Xuehong said: "According to the Data Of Statistics, the number of households in the seventh census is 490 million. Of the nearly 500 million households, 60% of the households are currently car-free, last year the number of motor vehicles more than 400 million, if in the future 80% of the families can own a car, plus some families own more than one car, we expect the peak car ownership to reach at least 500 million. Based on the 15-year service life of a vehicle, it can basically support the demand of at least 40 million units. ”

This year's automobile production and sales reach expectations is a high probability event. Lang Xuehong believes: "In 2018, the automobile entered the downward cycle of the industry, and after 4 years of adjustment, it basically entered the market recovery cycle. Although the current external environment is more complicated and the domestic market is affected by the epidemic, from the perspective of overall market development, we always believe that the market is spiraling upwards. At the beginning of the year, we predicted that this year's sales would be 27.5 million units, and we still believe that this year will be close to the forecast. And, now confidence is more important than gold. In the case of weaker general expectations, I prefer that the entire industry can turn expectations stronger, and only with stronger expectations can we challenge higher goals. ”

Obviously, in Lang Xuehong's view, difficulties are temporary, and there are always more ways than difficulties to be confident in the future and actively think of ways.

Used cars crowd out new car consumption?

In recent years, the annual trading volume of used cars has increased significantly, and it is expected to exceed 20 million units this year. At the same time, new car sales continued to be sluggish, falling from a step away from 30 million to 25 million. As a result, there is a "concern that used car transactions are crowding out new car consumption" in the industry, is this really the case?

Lang Xuehong analyzed: "Just imagine, if the second-hand car transaction is absolutely not allowed, then consumers buy a car until it is scrapped. We calculate according to the service life of a car for 15 years, the car company sold a car to the owner, and then wanted him to buy a car to wait for 15 years. However, if we have a healthy, active, and reassuring used car market, many car owners with spending power will have a shorter period of car ownership. Moreover, the technological change of the car is changing with each passing day, every year there will be different functions, different configurations, different new products launched, consumers want to try new products, must be in the hands of the second-hand car disposal. I optimistically judge that the annual trading volume of used cars in 2025 will reach 30 million units, which is a one-to-one ratio with new cars. ”

Therefore, Lang Xuehong's judgment is that a healthy used car market is like a market with faster water flow, and speeding up the circulation of used cars will help new car sales.

Where is the channel change heading?

The transformation of the automobile industry superimposed on the fluctuations of the epidemic, the transformation of upstream OEMs in difficulties, what changes will occur in the downstream channel operation model?

From authorization, to agency, and then direct operation, the participation of dealers has changed from heavy to light. Lang Xuehong introduced: "Car authorization model, dealers need to rent land to buy land, and then to invest in the establishment of stores, need to bear inventory, most traditional dealers to adopt this model; agency model, inventory is borne by manufacturers, agents fund to build stores, responsible for the early stage of customer collection and follow-up delivery services, such as SAIC Audi; direct operation, that is, all by the manufacturers themselves, such as Tesla."

The three modes are still in a state of chaos. Lang Xuehong introduced: "At present, the boundaries between direct agents and authorization are still relatively vague, and various manufacturers have some swings at different stages of development, such as about one or two hundred stores close to agents in the early stage of Weilai, but these stores gradually turn into Weilai directly operated stores after expiration. In the after-sales link, the general adoption of a stage of development process, such as Tesla, Weilai in the early stage are authorized dealer groups to do sheet metal spray, or do into the store maintenance, do authorized services, with the large amount of ownership and expiration will also withdraw the after-sales authorization, their own after-sales direct operation. From the perspective of traditional manufacturers, we found that since last year, many traditional manufacturers are also trying online sales models, and they are also paving the way for direct sales of future manufacturers. ”

The withdrawal of some supermarkets is a normal phenomenon. Lang Xuehong believes: "Some people see that the number of beijing auto supermarkets withdrawn is greater than the number of new ones, and they think that the number of supermarkets is in a big ebb. In fact, the supermarket should not have been a fixed, permanent outlet. On the one hand, it is affected by the traffic, operation and positioning of shopping malls. If a car brand's supermarket stores stay in an area for a period of time and do not have too many new users, this determines that you need to withdraw the supermarket to choose a new supermarket; on the other hand, a brand withdraws the supermarket stores in Beijing and sinks to the third and fourth-tier cities, which may mean that it has completed the task of marketing and brand promotion in first-tier cities. Moreover, although Tesla withdrew in some areas, other 'new forces' that have just emerged are in a large-scale layout, so this matter cannot be generalized. Supermarkets must be a normal existence, of course, combined with flash mob behavior, will be a broader layout, but in a certain location may not be too long. ”

Overall, the automobile industry is in the midst of major changes that have not been encountered in a century, coupled with the impact of the epidemic, the frequency of fluctuations on the supply side and demand side has been amplified, so the channel side has felt unprecedented pressure and is facing unexpected challenges. However, the long-term development trend of the automobile industry has not changed, and the experts of the 2022 Blue Book Forum of the Automobile Circulation Industry have answered the questions of the confused channel end and strengthened everyone's confidence and determination to develop.

(Image source: Internet)