Violation inquiry http://www.biyaode.com www.biyaode.com After the wave of mergers and acquisitions in automobile dealership groups in 2011, the curtain of competition for expansion among dealers in 2012 was raised by the news that Chongqing Guanghui Automobile was preparing to acquire Sichuan Shenrong Automobile. Under market competition and policy support, major automobile dealership groups have expanded their influence in hopes of reversing the trend of slowing growth in the car market in 2011.
Various models have emerged. At the beginning of the year, Yongda Automobile, Shanghai's largest automobile dealership group, planned to list in Hong Kong, aiming to raise $5 billion to $6 billion. Currently, there are already seven automobile dealership groups listed or basically completed listing work domestically, including Zhongsheng Holdings, China Zhengtong Automobile Services, and Pangda Auto Group. Some automobile dealership groups that rarely appear in public are also beginning to plan for an IPO.
The recent domestic automobile market boom has brought substantial profits to automobile dealers in terms of sales and after-sales services. Some dealers have continuously expanded their scale, accumulating substantial funds, laying a good foundation for going public. Listing undoubtedly provides automobile dealers with sufficient capital sources, promoting their growth and strength. Guanghui Automobile once estimated that if it went public and raised 30 billion yuan in funds, it could take out no less than 7 billion yuan annually for continuous acquisitions, which could make its annual revenue reach 35 billion yuan. The number of new or acquired dealerships each year after financing through listing would also see a significant increase.
In addition to going public, many automobile dealers have accelerated their acquisition pace following the acquisition wave in 2011. In 2011, Guanghui Automobile successively acquired more than 30 automobile sales service companies such as Tangshan Zhongrun Automobile; Pangda Auto Trade acquired Changsha Hexin Toyota Automobile Sales Service Co., Ltd. and other automobile sales service companies; Liantuo Group spent 28.5 million yuan to successfully acquire 50% controlling equity interest in a Toyota agent in Zhejiang. China Zhengtong Automobile Services Holding Limited also spent 5.5 billion yuan to acquire Shenzhen Zhongqi Southern Investment Group Co., Ltd., becoming one of the largest circulation industry acquisition cases in recent years. Excluding this acquisition, Zhengtong has completed three acquisition cases totaling 534 million yuan since April this year.
Besides expanding business scale through going public and mergers and acquisitions, some automobile dealership groups are also introducing new business models, such as Pangda Auto Trade introducing automobile outlets. In Beijing's South Fourth Ring "Pangda Outlet" automobile park, in addition to various "old models" of multiple Haier Ma, Beijing Hyundai domestic cars, and high-end cars like Mercedes-Benz, there are more commercial vehicle models such as Jiefang, Auman, and China Heavy Duty Truck. All models enjoy discount offers, with a maximum of 90% off and a minimum of 70% off. For merchants entering the park, Pangda only charges a 1% handling fee. Concentrating on selling "new old models" from automobile manufacturers not only handles manufacturer inventory but also meets consumers' needs to buy new cars at lower prices. Initially focusing on commercial vehicles while involving passenger vehicles, the second phase will introduce more passenger vehicle brands, as well as projects involving passenger vehicles, used cars, automobile parts, automobile repairs, automobile decorations, storage and transportation, and business consulting.
Through various models to drive business development and enhance brand influence, automobile dealers use all sorts of methods, hoping to occupy advantageous positions in the automobile market.
Dual Driving Forces
The increased competitiveness among automobile dealers comes from market pressure and policy promotion. After the rapid development of the car market in 2009 and 2010, the car market encountered a low point in 2011, and hidden problems during the golden decade of the car market gradually surfaced. For example, the predicament of blindly expanding and repetitively constructing 4S stores was further magnified as the market gradually cooled down.
The cooling car market brings pressure to automobile dealers while also providing new opportunities. Many small and weak dealers choose to exit in the face of an unfavorable market. However, large dealer groups rely on strong capital, mature business models, and concepts to recruit talents and expand their influence, Zhangzhou motor vehicle violation inquiry http://www.biyaode.com/zhangzhou/.
Large dealer groups use the advantage of diversifying operational risks, operating multiple stores in multiple locations without being restricted by changes in individual city policies. Therefore, all major dealer groups continue to push simultaneously in two directions in store construction, reducing distribution costs, improving the coverage of the sales network, better promoting the circulation of automobile products, and enhancing corporate competitiveness. Large dealer groups such as Pangda, Guanghui, and Yuntong have applied for and built new brand stores in many main cities across the country.
Moreover, the rapid expansion of dealer groups can also increase their bargaining power with manufacturers. In the current market, automobile manufacturers and dealers are still in an unequal position, with manufacturers dominating and dealers' voices suppressed. Pang Qinghua, chairman of Pangda Group, once complained: "Manufacturers set tasks for dealers without negotiation, giving whatever they want, penalizing you if you don't complete the task. The phenomenon of excessive inventory is very serious, sometimes even reaching 3.5 times." To realize their own interests, dealers accelerate the process of group formation and expand their strength.
Taking advantage of favorable policies is also one of the reasons why dealers continue to expand and enhance their influence and competitiveness through various channels. At the end of 2011, the Ministry of Commerce issued the "Guiding Opinions on Promoting the Development of the Automobile Circulation Industry During the Twelfth Five-Year Plan," pointing out the need to improve industry concentration, striving to achieve by the end of the Twelfth Five-Year Plan that the turnover of the top 100 automobile retail enterprises accounts for more than 30% of the total industry. It aims to cultivate 30 regional automobile circulation enterprises with main business revenue exceeding 10 billion yuan, and 3-5 large automobile circulation enterprises exceeding 100 billion yuan.
However, currently in the market, only Pangda Auto Trade and Guanghui Automobile have revenues exceeding 5 billion yuan, still having a considerable distance from the requirements of the "Guiding Opinions on Promoting the Development of the Automobile Circulation Industry During the Twelfth Five-Year Plan." This also stimulates capable automobile dealership groups to strive tirelessly towards the goal of hundreds of billions.
Profit Model Urgently Needs Innovation
Listing, mergers and acquisitions, new marketing models, automobile dealers are constantly growing larger. Currently, dealers typically use channel下沉 (channel penetration) ways, not just second and third-tier cities, but rural markets are also becoming battlegrounds for dealers competing for automobile consumption. Taking Jiahua as an example, besides starting chain services in central cities, it also begins to involve multi-brand small showrooms in second and third-tier cities.
While expanding horizontally, dealership groups also begin to focus on vertical extension of the business chain, starting to penetrate into post-market service areas such as automobile goods, automobile repair, automobile leasing, and used car businesses.
Dalian Zhongsheng Chief Operating Officer Chen Wei once stated that in the development of dealership groups, not only should they consider the breadth of expansion and store building, but also the depth, "After listing, our breadth of development has been very fast. We now have 70 stores and will exceed 100 by the end of the year. But in terms of depth, there is still a lot of room for improvement."
In Chen Wei's view, the overall profit model of China's automobile dealership enterprises has not been established, mainly relying on new car sales, which is not conducive to resisting market risks, consolidating customer resources, and enhancing profitability in the aftermarket. How to find their own profit model, each automobile dealership is actively searching.