The author | Yu Weng
Edit | Island
Period: 2796
Source: People and Island members
According to the "2021-2022 China Automobile Circulation Industry Development Report", "by the end of 2021, there are a total of 29,318 4S sales and service networks nationwide", of which "there are 1,655 dealer groups with 3 or more 4S stores, with a collectivization rate of 61.8%." There are more than 800 dealer groups with 3 to 5 4S stores, and 14 dealer groups with 100 or more 4S stores."
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Under the control model of automobile dealer groups, the game between investors and professional managers is difficult to avoid.
The root of the investor-professional manager game in the auto dealer group
The investor-professional manager game of the auto dealer group has its roots within the auto dealer group. Professional managers, as the actual operators of 4S stores, often do not hold a stake in 4S stores, which is more evident in large car dealer groups.
In fact, in the 4S store has just begun to enter the Chinese period, such as Guangqi Honda, SAIC-GM, etc., are looking forward to the application submitted by investors to build stores, can be reserved for professional managers to achieve the purpose of equity incentives; and most of the investors have also made corresponding arrangements "interestingly", but most of them are shelved after the application is completed, and professional managers have not changed the single identity of "workers".
Many large domestic auto dealer groups (such as car dealer groups with more than 50 4S stores) have experienced the fission of dealer groups - auto dealer group executives have set up a separate portal, established a new small and medium-sized car dealer group (generally no more than 10 4S stores), and taken away a number of 4S store general managers, and these 4S store general managers often get a certain proportion of equity.
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Most of this fission occurred 10 years ago, or even longer, due to the gradual maturity of the domestic car dealer industry, the probability of professional managers obtaining 4S store equity has been minimal.
Performance of the investor-professional manager game of the auto dealer group
Due to the professional managers represented by the general manager of the 4S store, most of them failed to obtain the equity of their responsible operation of the 4S store, mainly relying on the salary income, mainly the annual salary + bonus. The so-called annual salary depends more on the achievement of financial indicators such as the size and profit within the budget and the achievement of comprehensive management performance; the so-called bonus is more of an incentive for it to obtain excess (more than the budget target) profit.
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As a professional manager, in order to obtain full and excess returns in terms of annual salary and bonuses, on the one hand, it is necessary to reduce the expectations of investors and make the budget target low; on the other hand, it is necessary to hide various comprehensive rebates as much as possible to achieve the delay in the arrival of rebates. Either way, the starting point can be boiled down to an economic term — information asymmetry. It is precisely because of information asymmetry that investors are actually very tired, often have to deal with a number of automobile OEMs, really too busy to grasp the big and small, focusing on strategic brands, profitable brands.
At present, the mainland's financial policy requirements are based on the realization system of receipt and payment, and automobile dealers, as a typical circulation enterprise, often have a large number of rebates in various names. For example, sales promotion awards, standard awards, and sometimes so-called red envelopes, vague rewards, in fact, more suitable for the "accrual system", by investors and professional managers to make business management decisions, which will appear a BUG - professional managers due to the higher depth of information mastery, often through the control of the time of rebate to the account, and even hide the rebate project, to maximize personal income.
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Therefore, from this point of view, as an investor in the auto dealer group, we must realize the centralized management of the resident financial manager; and the resident financial manager and the main financial management personnel of the headquarters must realize the integration of business and finance, be able to truly business logic, and be a good steward of investors.
The disadvantages of the game between investors and professional managers in auto dealer groups
The failure of professional managers to obtain equity in 4S stores and achieve shared development results is on the one hand the root cause of the game; on the other hand, it often leads to short-sighted behavior of professional managers, that is, lack of consideration based on medium and long-term.
At present, in many car dealer groups, due to the number of 4S stores throughout the country, the rotation of the general manager of 4S stores in different 4S stores has become the norm. At the same time, the general manager considers the factors of current earnings, and its management actions will inevitably focus on short-term interests, and the business of "planting trees before and cooling off after people" will not be done, which also lays hidden dangers for the future development of 4S stores. What's more, the frequent occurrence of 4S store job encroachment has become a major risk to the daily operation of 4S stores, and professional managers often lack in-depth attention to this.
In summary, the final result of the game is that it is difficult for 4S stores to formulate effective medium- and long-term development strategies, and more to pursue the maximization of short-term interests, which also requires the auto dealer group to need a strong enough and large-scale headquarters management team. In fact, many headquarters management teams lack professional capabilities, and it is difficult to effectively see the 4S store operations in situ, and the result will only cause "redundant staff and redundant expenses" at headquarters.