With the rise of domestic cars, why are 4S stores closing down on a large scale?
China's auto industry is going through two days.
On the one hand, there is the rapid rise of domestic automobiles, and on the other hand, there is a large-scale closure of 4S stores. Recently, Guangdong Yongao Group has fallen into the cusp of public opinion. Almost overnight, the Internet was full of videos of "Yongao Group picking up the car and running away", many car owners paid a deposit, did not get the car, not to mention, the 4S store was also emptied and closed. Especially in the Dongguan area, it is rumored that more than 80 4S stores have closed down.
In response to the rumors on the Internet, Yongao Group issued an announcement saying that the company had indeed encountered difficulties, but the news of the closure of the store was all rumors.
In this era of social media, the more you refute rumors, the more you can't refute them. What is certain is that Yongao Group must have closed its stores, and many stores have been closed, and many show cars have been pulled to the bank to pay off debts. The only one that was rescued was only 31 Wenjie M7, and Huawei and Cialis shot in time. In the past, many people questioned and asked the industry to find Huawei's endorsement, but the after-sales service was done by Cialis, and if there was a problem with the car, should you look for Huawei or Cialis?
In this wave of interception of show cars and delivery of car owners on time, Huawei and Cialis jointly made a move, which really swiped a large wave of goodwill. Because the cars that were towed away were not only Wenjie, but also Toyota, Honda, Lynk & Co, Volvo, Aion, Lotus, Mercedes-Benz and other brands. In the captain's opinion, there are two main reasons why Wenjie can be rescued:
First, Huawei and Cialis responded in a timely manner, pulled the car back as quickly as possible, and handed it over to the owner. Second, in the territory of Dongguan, Huawei's influence is indeed too great. The local government and banks want to sell Huawei a face.
Huawei is the largest taxpayer in Dongguan, paying more taxes than tobacco companies in Dongguan. At the same time, Huawei is also a leading enterprise in Dongguan's transformation to high-end manufacturing. With the introduction of Huawei, Dongguan not only built Songshan Lake, but also attracted a large number of supply chain enterprises to settle in. If the car in Dongguan has a problem, Huawei can mobilize a lot of resources to rescue the car, and other car factories do not have such energy.
However, China's automobile industry is thriving, production and sales are booming, not only exports have topped the world, production and sales have also broken through the historical record, why 4S stores are closed down on a large scale? This is closely related to the industrial transformation of new energy vehicles.
You can find that starting from Tesla, China's new car-making forces have basically adopted the direct sales model, and no longer engage in the traditional 4S store franchise model. At the beginning, Tesla did direct sales because it wanted to unify the brand and service, without middlemen to make a price difference, and the benefits could be maximized. In the direct sales model, in addition to the relatively large fixed investment in the early stage, the profit margin will be infinitely magnified when the scale advantage runs in the future. In this model, Tesla's profit margin once surpassed Mercedes-Benz and topped the world. At the peak of Tesla's profits, for every car sold, the gross profit was 70,000.
On the one hand, this money is brought by the brand premium, and on the other hand, it is exchanged for cost compression. Before the "brake failure incident", Musk himself was the only spokesperson for Tesla, did not produce any commercial advertisements, and did not pay public relations fees to any media. Regarding advertising, Musk also debated with Lenovo President Yang Yuanqing. Yang Yuanqing believes that advertising is indispensable in order to sell products to the world. Musk retorted that advertising is deceptive, and good products do not need to be advertised, and should focus on technology research and development.
But after the "brake failure incident", in the face of overwhelming public opinion attacks, Tesla compromised, established a public relations department, and began to cooperate with the media. Later, because new energy vehicles were too rolly, Tesla's sales continued to decline, and it slowly began to advertise. At that time, netizens were still frantically mocking Yang Yuanqing, but Musk still became Yang Yuanqing after all. Tesla didn't advertise in the past because this market was not enough to roll, as long as it was rolled up, advertising costs and public relations fees were inevitable.
However, Tesla's auto brand direct sales model has made many new car-making forces choose to follow. New brands such as NIO, Ideal, Xiaopeng, and ZEEKR have all chosen direct sales. When the brand does direct sales, the living space of the 4S store is greatly compressed.
In the face of the bloody price war, the profits of 4S stores are not as good as before. 4S stores mainly rely on selling cars to make the difference, but when car companies desperately fight price wars, 4S stores do not have much profit. Cars did sell more, but the profits didn't increase dramatically, and those profits were passed on to consumers. In the past, 4S stores could also earn hidden income through services such as financial loans, but now it is an era of information transparency. How much profit does the so-called "financial service" have, and how much price can it cut? All major auto bloggers have made it clear and clear that consumers are not easy to decide.
But what really dealt a fatal blow to the 4S store was that the joint venture car was not easy to sell. The vast majority of 4S stores grew up in the era of joint ventures and have a high dependence on joint venture brands. But now, in addition to the German Volkswagen is still strong, Nissan, Toyota, Honda, Hyundai, Peugeot, Citroen and other joint ventures have all declined seriously. In order to clear inventory, many 4S stores even sell cars at a loss. Nowadays, consumers have too many choices, and if you don't sell it, you immediately turn around and replace the next one.
In addition, electric vehicles have disrupted the price system of traditional cars. The second-hand car market is basically collapsed, car dealers basically dare not accept second-hand electric vehicles, the price cut in half is a common phenomenon, and it may not be sold if it is recovered, in case the car company goes out of business, it will be out of print directly.
Today, the prosperity of China's auto market is the prosperity of consumption, not the prosperity of capital. On the consumer side, ordinary people can buy better cars at lower prices. But on the capital side, not only 4S stores are losing money, but major car companies are also losing money. Car companies such as Weilai, Xiaopeng, Zeekr, Deep Blue, and Cialis are all selling cars at a loss. Especially for NIO, it will lose 100,000 yuan to sell a car on average, with a cumulative loss of 92.1 billion yuan in 8 years!
This situation of continuous losses of 4S stores and new car-making forces cannot be changed for the time being. The market has not yet completed the reshuffle, and there will be people who will be eliminated from the competition all the time. Xiaomi remains the biggest uncertainty. If Xiaomi Auto succeeds in breaking the game, there will only be more traditional 4S stores going out of business. But the wealth in this market will not disappear, but will be transferred from the distributors to the brand's direct stores.