Research Report on Chinese Auto 4S Shops, 2010-2011China Research and Intelligence Co., Ltd.December 28, 2009 50 Pages - SKU: CRIC2529019 |
| Countries covered: China Since the 21st century, Chinese auto consumption sees a soaring tendency. Autos enter Chinese ordinary families as consumables. Chinese auto sales volume maintained a high growth rate even in the financial crisis. From Jan. to Nov. of 2009, Chinese auto sales volume reached 12.23 million, rising by 42.4% YOY. Presently, there are over 30,000 auto distributors in China. Since the establishment of the first 4S shop of Guangqi Honda, there were over 10,000 auto 4S shops in China by the end of 2008. The number of Chinese auto 4S shops ranks the world Top. With the intensified competition on Chinese auto market, the perfection of the sales and service channels is highly valued by auto enterprises for scale expansion. Though auto 4S shops require a large initial investment, they have become the main sales and service channel for Chinese auto manufacturers dependent on their terminal advantages of specializing in sales and service as well as building brand images. Currently, Chinese auto market gradually enters the mature stage with improving marketing concepts and maturing consumer psychology. After the prosperity for several years, Chinese auto 4S shops enter the adjustment stage with sharp profit decrease and intensified competition. Moreover, auto 4S shops of some brands even face crisis. It is forecast that the 4S shop mode will still be the mainstream for Chinese auto sales in following years. However, owing to the numerous new cars emerging on the market and the rising expectation value on service qualities of consumers, the inherent disadvantages of auto 4S shops are exposed. According to relevant statistics, among auto 4S shops in Beijing, only 1/3 of them make profits; another 1/3 face loss risks; the rest 1/3 suffer great losses. As markets today are quite fickle, none of the auto marketing patterns - trading market, 4S shop, supermarket and auto industrial park - can be duplicated completely. Though auto 4S shop is commonly regarded as the most advanced auto marketing pattern, it is not applicable to all auto models and brands. There are mainly two patterns for the collectivization of Chinese auto 4S shops at present. Firstly, horizontal development, also called multi-brand operating pattern. This is the most common pattern on the same regional market. This is because when auto manufacturers authorize their distributors, they would usually only give one sales network to a distributor in the same regional market considering the network security, distributor strength, management and control capacity of the same regional market. Secondly, vertical development, also called single brand operation. This usually emerges on different regional markets. This is much better than the first pattern, reducing problems faced in the collectivization process. It is easier to get familiar with brands to manage and operate 4S shops and auto manufacturers have fewer worries on network security. This complies with the demand of auto market development. In the coming years, the auto sales will transfer from the distributed pattern to the cluster pattern. Auto street and auto industrial park will become the mainstream sales patterns, setting up auto 4S shops collectively and planning uniformly to create the cluster effect. By analyzing the profit structure of global auto distributors under normal operation, the profit proportion of the whole car sales, after-sales services, spare part and second hand car sales is 10%, 50%, 10% and 20% respectively. To cope with the intense market competition, Chinese auto 4S shops must keep in accordance with the tendency to make quality service as the core competence of enterprises. Presently, most auto 4S shops in China concentrate on the improvement of auto sales volumes while ignoring the management of after-sales service, the raise in customer satisfaction degree and the enhancement in after-sales service and technology development. In the profit structure of the auto industry, the proportion of whole car sales, spare parts sales and maintenance service is 2:4:1. The maintenance service profit is the major contributor of the auto profits. On the present Chinese auto after-sales service market, the competition is mainly between auto 4S shops and auto maintenance factories. Auto 4S shops provide complete after-sales services while maintenance factories supply convenient and cheaper services. With the maturity of Chinese auto sales market and the product differentiation narrowing-down of various auto brands, distributors acquire profits mainly from after-sales services. Therefore, auto 4S shops must perfect their after-sales services to improve the customer satisfaction degree and cultivate the customer loyalty. Through this report, readers can acquire more information:
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