The "subsidy event" triggered by luxury brand dealers is considered to be of epoch-making significance in the automotive circulation field.

"After engaging in sales management for many years, I have never heard of similar incidents." A sales manager of a luxury car company told the reporter of the "Daily Economic News" that "the occurrence of a subsidy event" is partly due to the company's own reasons, and more The contradiction caused by the unequal relationship between manufacturers and dealers in the automotive circulation field has exploded over the years.

On November 28, 2014, BMW dealers filed five appeals with BMW (China), the most notable of which was the requirement for BMW to distribute cash subsidies of RMB 6 billion to dealers. After several rounds of negotiation, BMW (China) finally confirmed the total amount of subsidies for all BMW dealers totaling 5.1 billion yuan.

The "subsidy event" has spread in a number of luxury car brands such as Audi and Porsche. In addition, brand dealers such as Volkswagen Imported Vehicle and FAW Toyota have successively joined the "subsidy seeking" ranks. “Subsidies have resolved losses in 2014 and are still unpredictable in 2015. “A luxury brand dealer who received a subsidy told the Daily Economic News.

The reporter found through survey that dealers generally believe that the living environment in the next few years is not optimistic. First, China still bears the important responsibility of the auto giant's global sales competition. The sales orientation will be difficult to change in the short term, which will make it harder to improve the sales profit of new vehicles. Secondly, with the opening up of after-sales market services such as maintenance and repairs, it will currently support the profitability of dealers. The most important business suffered from eating out, and some dealers expect that after-sales profits will be halved in the next two years. A dealer even told reporters that before 2018, the number of dealers “loosening” half of the predictions is very likely to become a reality.

Do not make money to trigger the dealer "resistance"

Ten years ago, the 4S shop had a case of “investment in the year, recovering costs in the year,” and it is difficult to repeat this glory today. Right now, the auto 4S shop is becoming a "hot potato."

“We did not have any conspiracy theories, and we naturally need to support the loss too much.” On January 7, Sun Gang, the president of the China Automobile Dealer Investors’ Federation, made his first voice. He told the "Daily Economic News" reporter: "We are businessmen, pay attention to business and market environment, and concern with the upstream and downstream cooperative relations and benefit-sharing."

It was the statement made by the China Automobile Dealers Investors’ Federation to subsidize Anguso, the president and chief executive of BMW Group Greater China, that triggered the "subsidy event" of the auto industry.

After several rounds of negotiation, BMW’s total subsidies were set at 5.1 billion yuan. Sun Gang stated that BMW (China) has set up a working group, and the group said that it will use this as an opportunity to build a dialogue mechanism between distributors and manufacturers. He hopes that the two sides will be more regular and avoid similar incidents from happening again.

Under the influence of BMW's "subsidy event," Audi and Mercedes have successively subsidized distributors to make up for the losses in 2014. On January 3, an Ashkenazi luxury brand dealer revealed to the reporter of “Daily Economic News” that the subsidy was already in place and that with additional subsidies, the store had a profit of less than 200,000 yuan in 2014, which was an investment of tens of millions of yuan. For 4S shops, it can be described as "horrible."

According to reports from the media, the final plan for Mercedes-Benz to subsidize dealers has also been issued to various dealers. It is reported that Mercedes-Benz bicycle dealers for the subsidies in the range of 4000 to 7,000 yuan.

At the same time, actions taken by the Volkswagen Imported Vehicles and Porsche dealers to subsidize and boycott cars are still in progress. At present, enterprises have not made any clear statement.

“As far as I know, more than 90% of the VW imported car dealerships were losing money in 2014. “A dealer who has been engaged in the sales of VW imported cars told reporters, “We not only asked for resupply dealers’ losses in 2014, but also Volkswagen Import Vehicle Payment is required to have a long-term default on the 'rebate point' of dealers since 2009."

In addition, after knowing that China's sales target for 2015 has been significantly raised, Porsche dealers also expressed their willingness to not mention cars. It is reported that Porsche has set China's sales target for 2015 at 64,000 units, an increase of approximately 24,000 vehicles over the previous year.

A Porsche dealer told reporters that “Our profits have dropped sharply in 2014.” Profits have shrunk by more than three-quarters, new car sales have suffered losses, and rely on aftermarket sales to make profits.

In this regard, a veteran of the automotive circulation industry stated that not making money is the root cause of the collective “fighting” of distributors at the end of 2014. By convention, companies usually press for impulses at the end of the year. The difference from the past is that in 2014, the dismal dealers had “impulse” the impulse task and the cash flow had a crisis of collapse. Therefore, Baotuan demanded subsidies from the manufacturers.

BMW's reform assessment Audi down target

After a series of "subsidy events," 2015 will be a turning point in the relationship between OEMs and dealers. Sun Gang believes that the subsidy is only to overcome the temporary difficulties. Only by establishing a brand-new automobile circulation model from “the dealer alone faces the market risk” to “the main engine factory and the dealer responds together” can we solve the problem fundamentally.

The reporter learned that some BMW dealers signed a staged sales task for 2015 with BMW (China) after receiving subsidies. However, unlike the starting point of passing the sales assessment, the dealer's profits were placed on an important position in the assessment.

"For example, if the market situation in the first two months is not good, the task will be cut in March." Sun Gang told reporters that the two sides establish a regular dialogue mechanism, so that manufacturers participate in the first-line sales, forming a profit-centered automobile circulation The new form, not the previous market share or sales.

Another BMW dealer said that before the vehicle manufacturer's customers were dealers, they would be profitable after the vehicles had been sold to dealers. In the future, it is expected that OEMs and distributors will face the same end-consumer market circulation model.

The reporter learned that the next round of negotiation between BMW and distributors will be centered on business policies. The contents include the establishment of store standards and investment methods, cost structure management, marketing management and rebates, assessment and objectives, liquidity crisis management, and product positioning. Pricing and so on.

According to reports, at the Audi dealers' annual meeting held at the end of 2014, Audi reduced the dealer's evaluation system by six items, while reducing the appraisal rebates related to assessment scores, increasing the proportion of fixed rebates, and increasing the total rebates.

The reporter was also informed that Audi's 2015 sales target was lowered from the previous 700,000 units to 640,000 vehicles. This is the first adjustment made by the Audi brand based on the Chinese market environment to ease distributor pressure.

Some analysts believe that the struggle for market share is one of the root causes of the automotive vehicle circulation crisis. In the process of manufacturers' pursuit of share, dealers' rational profits are selectively ignored or ignored.

"If Audi does not lower its target, BMW and Mercedes are also difficult to make compromises on sales targets. "An ethical luxury brand dealer bluntly argues that crazy games for market share will continue in the luxury car camp. " The subsidy incident "just sounded an alarm for the game, not the final whistle."