Economic Daily

Recently, the report on the development of China’s automobile circulation industry from 2021 to 2022 (hereinafter referred to as the report) was officially released. According to the report, by the end of 2021, the total number of passenger car dealers was 29318, with a year-on-year increase of 3.9%, of which the independent brand network had a strong growth.

For the development of the automobile circulation industry this year, Xiao zhengsan, vice president and Secretary General of China Automobile Circulation Association, said that due to the superposition of multiple factors such as the continuous and frequent outbreak of the epidemic, the rise of international commodity prices and the surge of supply chain risks, the new downward pressure on the automobile market has further increased and exceeded expectations.

“The value chain of the automobile industry is accelerating the reconstruction, and the automobile market is facing unprecedented challenges and opportunities, which will put forward higher requirements for the communication industry.” Xiao zhengsan believes that the rapid changes in products and technologies, market and demand, especially the exploration of channel mode triggered by new energy vehicle products around the world, are forcing the automobile circulation industry to accelerate the transformation and upgrading.

Channel diversification becomes a new trend

Xiao zhengsan proposed that, on the one hand, the knockout competition of brand manufacturers began to accelerate, which brought about the transformation of circulation channels. The second-hand car business will become the most core strategic business segment of dealers; On the other hand, new energy vehicles have sprung up, the market penetration has increased rapidly, and the proportion of individual car purchases has increased significantly. It is expected that the sales volume of new energy vehicles will exceed 20% of the sales volume of new cars one to two years in advance.

With the deregulation of second-hand car policies, the second-hand car market has been highly expected by the industry.

Lang Xuehong, Deputy Secretary General of China Automobile Circulation Association, believes that the second-hand car market will usher in a golden decade of development and expects the second-hand car to maintain an average annual growth rate of more than 20%. Based on the above prediction, by the end of the 14th five year plan, the annual trading volume of second-hand cars will reach 30 million, which is basically the same as that of new cars.

Will the development of the used car market crowd out the consumption of new cars? Lang Xuehong told reporters that he also heard a lot of similar concerns. But in fact, consumers who dispose of second-hand cars will not become users without cars. Generally speaking, they will buy a new car. If there is a healthy and active second-hand car market, each second-hand car disposed of will actually drive the demand for a new car.

The rapid development of the new energy vehicle market has driven the rapid expansion of the new energy vehicle channel network, and gradually formed three types of networks with different functions: 4S sellers, exhibition hall / experience center and after-sales service center. According to the report, 2468 4S dealers will be added in 2021, mainly from luxury brands and independent and new energy brands.

Lang Xuehong introduced that with the rapid development of the new energy vehicle market, manufacturers have increased investment in the construction of new energy channels and selected common network or sub network based on their own situation. At present, most of the luxury brands are launched in the way of independent sub network. The joint venture brand takes Volkswagen ID series as an example. On the one hand, it sells online in the original channels, and on the other hand, it encourages agents to establish supermarkets in the business center; GAC Honda has released a new channel of new energy vehicles.

“New and old forces are exploring channel changes, the boundaries between models are blurred, and the service channels of new energy vehicles are also being reshaped.” Lang Xuehong said that whether the network is shared or distributed, they will face their own challenges in the future. The key is to ensure the professionalism of new energy related services and balance the interests of existing channel networks.

Supermarket stores improve consumption experience

According to the report, in 2021, new energy automobile supermarkets located in shopping malls / shopping centers developed rapidly, reaching more than 2200, and nearly 70% of them were concentrated in 20 cities.

Walking into shopping malls such as blue harbor, heshenghui and Huaxi shopping center in Beijing, you can see many supermarkets of new energy brands. On the 5th floor of heshenghui in Beijing, the open space of nearly 3000 square meters in the atrium is now divided into several areas, in which nearly 10 new energy vehicle brands are stationed. After visiting one store, consumers can lift their feet and continue to visit another store.

Xiaopeng automobile salesperson revealed to reporters that the sales volume of heshenghui store is good, sometimes hundreds of units can be sold in a month.

“First tier cities have the highest density of supermarkets, with an average of 107 supermarkets in each city.” Lang Xuehong said that supermarkets can now be seen in third and fourth tier cities, especially in the eastern coastal areas. Supermarket stores can not only improve the consumption experience, but also promote brand publicity. They are still in a period of rapid development. However, due to the limited location resources in the city, the supply resources of supermarket stores will be gradually scarce within two or three years, and the cost of building stores will rise.

Car companies have to start with Tesla to seize the mall. However, while more and more car companies began to settle in shopping malls, Tesla closed some supermarkets and began to overweight the traditional 4S store model.

Tesla’s turn, coupled with the news that other brands have closed their stores, has aroused concerns in the industry. In this regard, Zhang Junyi, managing partner of Aowei consulting, said that the new energy vehicle brand will frantically seize the business district when it first started brand recognition. “This is actually an eye-catching behavior. When the brand is well-known and the sales volume is up, the number of stores will be dynamically adjusted, the stores with high conversion rate will continue to open, and the stores with low conversion rate and poor cost performance will be closed.”

Will supermarkets ebb? Lang Xuehong said that Tesla is actually walking in two ways at the same time. While opening the 4S store mode, Tesla is still looking for shopping malls and super stores in Shandong, Hebei and other regions. Shangchao store should not be just a fixed outlet. The channel format should gradually develop to 4S store, experience, delivery, maintenance, plate and spray center and other formats. The flash store with non fixed location will also be adopted by more brands.

Digital transformation drives innovation

Lang Xuehong pointed out that throughout 2021, multiple factors such as repeated local epidemics and insufficient supply of popular models caused by chip shortage have disrupted the sales rhythm and increased the difficulty for dealers to deal with market changes. At the same time, the high cost of getting customers and the reduction of passenger flow are the core pain points of dealers.

In the face of many pressures and challenges, auto dealers pay more attention to digital transformation, and hope to establish an auto sales and management system with customer needs as the core through digital construction, so as to tap the value of customers in the whole life cycle and achieve excellence