Reflections on the Light City: Feasibility of Automobile Sales Model

Recently, Wang Zhengyin, a member of the Guangdong Provincial People's Political Consultative Conference, proposed to break the monopoly of the auto 4S store from the legal level and received a reply from the Provincial Administration for Industry and Commerce: Guangdong will take measures to strictly control 4S stores. The downturn in the auto market, the declining growth rate, some people have the money to buy a car, some people have a car can not sell money, the contradiction between manufacturers and distributors is constantly intensifying, the quality is falling, the price war is endless, the market is also testing the consumption of the severe The trust of dealers.

Will the current 4S store-led dealer model change in order to adapt to the new situation in the auto market? Under the market, how should the dealers in the front line of sales be able to reflect on the road under their feet? In response, the reporter conducted a survey on the various car sales models that may appear at present and in the future.

Mode 1: The 4S shop model as the core The current status of the Chinese auto market is a seller market that is in short supply. In other words, the production companies have a stronger voice, while dealers and consumers are in a subsidiary position to produce corporate brands and Benefits are the distribution model of core interests.

This business model of 4S stores has been more than ten years into China. More than a decade ago, car manufacturers vigorously fostered the 4S shop model in order to establish a brand. Therefore, 4S stores range from small to large, from weak to strong, and from small to large. Today, there are 6,000 4S stores in the country. According to incomplete statistics, there are only nearly 400 in Guangzhou. However, in the context of the rapid development of China's auto market, the unconventional 4S shop sales model has begun to reveal various drawbacks after more than ten years.

Lee: Brand and after-sale protection In terms of pre-sales, the brand certification 4S shop is franchise authorized, factory certification assessment, such dealers sell products that can allow consumers to rest assured that the included services and values ​​and even trust It is different from other general automobile stores.

Some people say that the advantages of 4S stores are in equipment and the disadvantages are in prices. In a word, the 4S store model clearly demonstrates the obvious advantages in the aftermarket of auto repair and maintenance. Its advantage is mainly from cooperation and technical support with manufacturers.

Many consumers are reluctant to maintain relatively high maintenance prices. The reason why they insist on choosing 4S stores is nothing more than the fact that their “pure original parts, professional technicians, hardware facilities, and one-stop after-sales service” and other private small repair shops cannot match. Traits.

In addition, 4S shop repair parts have one year or 20,000 kilometers (more individual brands) warranty, which is also an element of choice for consumers to rest assured.

Cons: Maintenance price is too "pit"

The high cost of building a shop, and the rapid growth of the buyer’s market in the auto market, masked its drawbacks. Once the auto market went down, this drawback was exposed. For dealers, the manufacturer will not discuss the task at all, saying that rewards will be rewarded, and that you will be punished.

In the relationship between consumers and 4S stores, consumers are still weak. In the face of powerful 4S shops, many consumers choose to silence after they have suffered a loss. Even if complaints are mostly lost, each year 3 15 is the peak of the problem, and most of the dissatisfaction comes from two aspects: maintenance and vehicle prices.

"Light service, heavy sales" has become the biggest problem of 4S shops, but the maintenance quality is not enough, parts prices are too high, and the quality of professionals is not high. Team instability constitutes the main part of after-sales complaints, and queuing increases in prices, etc. The instability of the price system is also another major focus of consumer complaints.

Discussion: Cancel 4S shop model feasibility parameters: 20%

In the current market conditions, this existing dealer model is difficult to fundamentally change. There are two obstacles: First, the "Brand Sales Management Regulations" formulated by the Ministry of Commerce imposes a basic restriction on the distribution system. This system confers a monopoly on the production enterprises, and all commercial activities of dealers are regulated by the production enterprises. "Without size," dealers simply have no room to play their business capabilities.

If you want to get rid of the current dealer system, you must modify the provisions of the brand management approach for automotive manufacturers and dealers. For example, whether or not you are qualified to sell automotive products will not be determined by the manufacturer, but rather by a third party or competent authority. Once this qualification is obtained, it will be able to distribute any brand of automotive products.

However, from the current supply and demand situation in the auto market, it is difficult for dealers to obtain a more independent status even if they change brand management methods. This is because the dealer model changes or not, and it is related to the relationship between market supply and demand.

The second is the brand management method, which is an artificially formulated rule. Therefore, there may be changes. However, the supply and demand of the market is not shifted by the will of the people. The change of position between the distributor and the production enterprise can only wait for the market. The change of situation.

Mode 2: Automobile hypermarkets Auto hypermarkets are not really new concepts. Racetrack Motor City, South China Automobile Trade, Guangwu Automobile and Motor Trade Auto City, Nanling Motor City, etc. can all be counted as very typical auto hypermarkets. Automotive brand, many 4S shops live in or accompanied with them.

The decline of sales channels is the trend of brand sales, but the choice of models is worth considering. The sales of single brands in small and medium-sized cities do not reach the scale of the corresponding 4S stores. If there are no large and medium-sized cities around 4S stores that can radiate into the area, these small and medium-sized cities will become blind spots in the market. Under the general trend of increasing saturation of large and medium-sized cities, car enterprises will no doubt give up these markets. However, the cost of building stores is too large. Manufacturers are in urgent need of a relatively low-cost sales model, and the form of large stores has emerged.

Lee: Reduced operating costs Since there is no need for separate business premises, land-based property costs and human resources are controlled, and the sales cost per brand and car is significantly lower than in 4S stores. This is reflected in the change in the status of OEMs and distributors. Obviously, such as the number of annual tasks, the amount of vehicles mentioned in the month, rebates and subsidies are more than a single 4S shop has the advantage of the right to speak, a local dealer told reporters that more hands holding the brand have more conditions with the host plant Number, the pressure under market competition will be relatively small.

As the strength of auto dealers continues to increase, the number of auto dealer groups that represent multiple brands is increasing, and auto malls will also become a new model that is increasingly valued by auto dealer groups.

For consumers, the convenience of buying models is enhanced. The competing models of the same level may be encountered in the left hand and right hand, respectively. They are not compared with Chengnan North City and Juma Lawton, and large groups usually have higher credibility. Degree, there is a relatively high level of protection before and after sales.

Disadvantages: High capital operation requirements In the current situation of “one inch of land” in the first and second tier cities, dealers often find it difficult to locate the “Chinese-Italian” locations and lay out outlets, or even large-scale stores. Both Guangwu Group and Heli Group began to develop new outlet maps in Foshan, Lishui last year. Nanling Group focused on the development of Shenzhen, Dongguan and Huidong regions, and Meilun Motor also built a brand new automobile city in Zhaoqing earlier this year. "Going out" has become the only way for distributors to expand their site.

After finding the right place, it is the place where the real test of strength is needed. There is no need to know where the strength is to dare to lay down such a large plate. Last year, it revealed that Foshan Kia brand dealers had lost money on their entire line of auto brand stores due to loss of real estate projects, and the boss had absconded with money. As a result, there are more than a dozen or so brand-operated hypermarkets with dealer capital operating capabilities and operating capabilities. There are very high requirements for cost control.

Exploring: Development of hypermarket feasibility parameters: 80%

It cannot be said that the auto shopping mall is a retrogression of the 4S shop model. Can only say which is more suitable for a particular consumer, which is more in line with the merchant's specific sales behavior under the cost and effect considerations. The choice of the model is due to the time, place and destination of the sale. It is necessary to build a large shopping mall to build a large shopping mall. It is also necessary to build 2S and 3S.

Mode 3: The 3S, 2S, etc. branch store system In the domestic leading market growth from the southeast coast and the first-tier cities to the second and third tiers and the transfer of western cities, this high-cost 4S model is not suitable.

In the past two years, many car companies have begun pushing 3S, 2S and other franchise stores to meet the downward demand of channels. As a result, under the franchise agency, 4S dominated and multiple models began to coexist. FAW Toyota Motor Co., Ltd. is the first manufacturer to establish a branch store model. Two dealers in Guangzhou have brewed down exploring channels to build branches and share sales tasks.

Lee: Reducing the waste of expensive stores The change in the channel model of China's auto industry has indeed reduced the costs of the intermediate links in auto trading, thereby reducing the amortization of intermediate prices in transaction prices. Less investment in 4S than 3S, 2S is indeed more in line with the downward trend in China's auto market.

For the current automobile market, the essence of the channel reform is not only to reduce the intermediate link costs, but also to shift the channel dominance from the car companies to the market.

Disadvantages: It is still the manufacturer's lead, whether it is 4S, 3S, or a second-level distributor authorized by the manufacturer, which is essentially a franchise store authorized by the manufacturer. For these franchised stores, it is entirely manufacturer-led to go from construction to operation.

Discussion: Cancel the feasibility of the branch store system: 90%

The root cause for manufacturers to dominate sales channels is that the brand management approach is caused by policies. With the current changes in the auto market, as long as the policy does not change, the promotion of a pure market is still limited. After all, for manufacturers, it is impossible to voluntarily give up this dominance, but for now, this kind of scheme is the most quick and feasible way to save costs and reduce dealer pressure.

Mode 4: Manufacturers build their own channels to prevent distributors from having too strong discourse power. Auto vehicle companies are planning to build their own channels. They also ensure that their sales channels are safe, efficient, and highly profitable. They adopt self-built channels. Currently, domestic A number of car companies have started to directly or indirectly set up their own sales channels, involved in sales and display of new and used cars.

Lee: To effectively control the price system for enterprises, there is only one ultimate incentive for self-built terminals, which is the imbalance of the profit distribution system. Whether it is to control the market or promote the brand or change the test, the purpose of the company is only one, that is to make profits . The increase in the strength of distributors, which have always been disadvantaged in their cooperation with manufacturers, also means that the right to speak has increased. This has caused vehicle manufacturers to feel pressure.

Luo Lei, deputy secretary-general of the China Automobile Industry Association, told reporters that this phenomenon is already very common. “On the one hand, the profits on the retail side are very impressive, and manufacturers will infiltrate the retail side in pursuit of profits. On the other hand, after all, the authorized dealers and the manufacturers are not one family, so the manufacturers also hope to cultivate their own pro-arms, compared with authorized dealers. These volunteers can effectively implement the company's business strategy."

For consumers, there is no inventory car after self-built channels. Consumers and manufacturers establish one-on-one order production and sales relations. They are simple and quick, and they no longer have high-end and low terminal concessions.

Cons: Triggering turbulence in the channel is not the same as the home appliance market. The automotive industry needs courage to build its own channels. The company is not careful enough to deal with the relationship between channels, or attempt to replace the original channel model with self-built channels. Smaller ones lead to continuous channel conflicts, which may cause channel turmoil. Under such circumstances, how to effectively integrate channel models and resolve channel conflicts has become the biggest challenge for companies.

Explore: Manufacturers self-built channel feasibility parameters: 50%

For a long period of time in the future, even if the outlets for self-built channels can only appear in an auxiliary form, because the base number of 4S stores is too large, it takes a lot of money, manpower, and time to fully receive the rights. Self-built terminal as an effective complement and adjustment of the regular channels, give full play to its brand promotion and the role of pilot reform, the effective integration of the two in place, complementary advantages, is it not the best of both worlds?

Mode 5: Selling cars online is a form of self-built channels for car companies. However, as a consumer product, tens of thousands of tens of thousands of mobile phones, I am afraid it is difficult for consumers to dare to order through the Internet, which is a too insecure thing. At the same time, the sense of security and pleasure that the entire service process brings in the car may not be experienced by the computer.

Li: Reduce the cost of building a 4S shop "Online car sales" For car companies, it can reduce the cost of building a 4S shop, increase control of the overall market, broaden consumer groups, and increase the visibility and attention of brands and models.

Although it cannot directly promote sales, the establishment of an online 4S shop and the promotion of an online car purchase model is undoubtedly a good marketing model for brands and models. For car companies, they can get rid of the entanglement with the dealers, truly control each link strictly, and choose this kind of wide coverage, interactive and flexible forms of advertising, not bad.

Disadvantages: Internet consumption environment Immature cars, as a consumer product, are still a large item for today's nationals. There are hundreds of thousands and tens of thousands at a time. I am afraid it is difficult for consumers to dare to order through the Internet. How to pay? How to mention the car? How to protect the quality of new cars? Who are you looking for? How to protect their own rights and interests? Various practical problems lie ahead.

In recent years, such statements have often been heard. "We sell more than just cars, we provide a lifestyle for cars."

In the car companies and dealers are paying more and more attention to the service quality of automobile sales and after-sales service system, and various kinds of auto life extension value-added services, the “selling online” model seems to ignore the consumer experience of the service and the guarantee The pursuit of car life.

Explore: online car feasibility parameters: 20%

In the long run, although the Internet-selling model is a development trend, it has not yet reached a period of sufficient credibility. The online-selling model has a long way to go and is now a bit premature. As the saying goes, one quick step in the market is “advanced”, two steps are “pioneers,” and three steps become “heroes”.

The reporter's observation that manufacturers cannot decentralize their power in the short term is a common expression under the weak market, and thinking about change is the positive attitude that the industry should take when the market is sluggish.

The formation and change of the automobile sales model is not determined by either the manufacturer or the distributor, and ultimately comes from the market. Changes in the market determine the changes in the distribution model. Only those companies that have keenly captured this kind of change can create a distribution model that is more in line with their own characteristics and meets the market demand in the future automobile market.

Although there are many controversies about the 4S shop model, which is currently the core of sales, the appeal of the anti-monopoly law may be just a good wish. The implementation will be accompanied by two main results. First, the factory's guiding price is in name only; The second is the end of the 4S model.

The author believes that these two results may be the wishful thinking of the market. Judging from the content of the anti-monopoly law, the style of instruction that is more instructive than the implementation of the law shows that this law is not very effective in the short-term if it is a norm for the automobile industry, which is a special industry market. However, the introduction of this law made the profit model of the 4S model near collapse.

In the short term, manufacturers are not likely to give up pricing power, and due to the long-term regional market segmentation restrictions, off-site car purchases cannot be guaranteed in terms of after-sales services. Therefore, consumers are less likely to choose cross-regional car purchases for cheap reasons. . At the same time, beyond the legal level, manufacturers’ control of distributors remains effective and tough. For example, a large part of a dealer’s income comes from returning profits from vendors after they have achieved sales figures according to the manufacturer's pricing (even if they have a large number of warehouses). Where legal provisions are not very detailed, and industry associations are unable to play an effective regulatory mechanism. This income has become a leverage that manufacturers can use flexibly and pinches the life of the dealer.

At the same time, for manufacturers, let the market price, and go to see the car industry Gome and Suning to make big, this is what they absolutely do not want to accept. To curb the development of the sales side, segmenting the market is the only effective way. Therefore, it is impossible for auto companies to adjust themselves on the issue in the short term because of the introduction of a law that has not yet been implemented. The after-sales, service, maintenance costs, etc., are the trump card manufacturers maintain the status quo, and brand building needs and the introduction of technology can also become the weight of the car enterprises and the government negotiations. Therefore, a large automobile market as unified as the European Union can be bought in any area and can be served in any area. In the short term, it cannot be formed in China.

As a consumer, we may wish to see that one day, a car can truly become an ordinary commodity that can be regulated by consumer rights protection laws or specific regulations in the automobile consumption field. Relying on non-consumer laws such as the anti-monopoly law, it is unlikely that the special industries and special markets for automobiles will be fully regulated.

Hotspot commentary broke 4S shop monopoly Recently, media reports said that Guangdong’s proposal to break the monopoly of auto 4S stores. When I saw the title, I was rather puzzled. Why does the auto 4S shop monopolize? A certain brand of 4S stores has and can only monopolize the brand models. For other brands, it is just like “Ridge” or “Ridge”. Most auto companies will sign an exclusive agreement with 4S stores, and 4S stores can only sell the brand. Model.

After careful reading of the report, it became clear that the "monopoly" that the proposal had removed was not a "monopoly" in sales, but a "monopoly" in the sale of automobiles. Because, the reality is that maintenance and repair, spare parts, maintenance work hours and other prices are the final decision of the auto 4S shop, although auto companies have introduced a unified national price, but there are policies, there are countermeasures, car 4S shop total There are ways to make money, such as push repair packages, such as replacement repair. The owner of the car couldn't say anything because the original spare parts were in the hands of the 4S store and went outside to repair. They were not assured.

The high profit of 4S after-sales service is an open secret in the industry. However, the contribution of mature large-scale 4S stores after the sale each month exceeds 50%, which is higher than the sales of new cars. The after-sales manager is usually the deputy general manager of the 4S store, and is on an equal footing with the vice president in charge of sales. Many dealers’ after-sales vice presidents are even “secondary” holders.

A high profit does not mean that the service is good. Although auto companies are striving to improve service quality, especially after-sales service, it is not uncommon for queuing, repairs, and rough repairs. Last year, a friend of the author went to the nearest 4S store for regular maintenance and was told to take it in 3 days. After 3 days, he went to the store and saw that the car did not move at all. The explanation given by the 4S store was that there were too many maintenance vehicles and that there was a delay. He could not accept, complained, and under the coordination of car companies, he barely completed maintenance. After this incident, he is now maintained outside the private store, not only fast but also of high quality. He gave an example. He used to only change the oil, but the private shop master took down each wheel for free and checked to see if there were any nails. If so, he handled it.

Does not rule out the possibility of 4S shop closed down, some dealers are struggling with the after-sales profit, once the sale of no money to earn, or earn less, it will die. It is recommended here that 4S shop investors, the relevant customs clearance, the next few years, car brands must die, not to mention 4S shop, presumably the past 10 years, but also earn a lot of money, it is time to wash hands .

For car owners, it is now possible to maintain them outside. It takes at least one year from the launch of the relevant policies to the implementation, and the difference between the 4S shop and outside maintenance is not small. Seeing here, it is estimated that all of the officers and men know what the author most wanted to say. Yes, that is: To eliminate the monopoly of the 4S store, you can start from now and start from yourself. You do not have to wait for the policy.