In the first half of the year, domestic auto dealers lost nearly half

According to relevant data, in the first half of 2012, one-third of China’s domestic distributors did not complete sales tasks. The percentage of losses increased from 6% in 2009 to 49% this year. The proportion of profits dropped from 84% in 2009 to the present. 26%. These figures mean that nearly half of the dealers are in a loss state, and among them, the loss of dealers with their own brand is the most serious, the loss ratio has reached 58%, and the profit earners have only a poor 15%.

According to industry experts' analysis, if the dealer's loss or profit decline in 2011 is a chain reaction to the rapid drop in car sales, the main reason for the poor dealers' survival this year should be attributed to the consequences of the expansion of auto companies and the pressure from stockpiling. Because compared to last year, this year's auto market did not deteriorate further, but showed some signs of recovery. The survival conditions of dealers should also have improved, but the result is the opposite.

According to statistics, despite the fact that there has been a slight increase in the Chinese auto market in 2011, the number of auto dealers throughout the country is still growing at a high rate. The number of auto dealers’ outlets increased by 21% to 16,300. While the auto market still has only a slight increase this year, the network expansion plans of many auto companies are still proceeding with great fanfare. Such a strategy will undoubtedly increase the operational risk of dealers.

A report released by Deloitte in September showed that the risks faced by Chinese auto dealers increased significantly in 2012. The debt-to-equity ratio in June was close to 85% alert level, which was a marked increase from 80% in December 2011. The inventory turnover days above the usual level further exacerbated liquidity pressures, with 48% of the surveyed dealers’ inventory turnover days exceeding the current industry benchmark of 45 to 60 days. At the same time, dealers are too dependent on the business policies and support of the OEMs, which also increases their own risks. According to the financial report data of listed companies compiled by Gasgoo.com, in the first half of this year, the revenue of the four listed automobile dealership groups (Big Group, Zhongsheng Holdings, Yaxia Auto and Zhengtong Automobile) increased by 35%, but the net profit However, it has fallen by more than 20%.

Reports on dealers' inventory pressure and capital chain fractures are also frequent. According to the "Car Dealership Inventory Survey Results" issued by the China Automobile Dealers Association in the first half of 2012, stocks of automobile dealers increased significantly in the first half of the year. Inventories of automobile dealers continued to climb in June, and the comprehensive inventory coefficient reached 1.98. According to international practice, the inventory coefficient is within a reasonable range between 0.8 and 1.2; when the inventory coefficient is greater than 1.5, the inventory reaches the alert level; and the inventory coefficient above 2.5 indicates that the inventory is too high, and the operating pressure and risk are very large.

Experts at Gasgoo Automotive Research Institute believe that the main reason behind the pressure from manufacturers to distributors is the excess capacity and the speed with which new vehicles are launched. According to estimates by many agencies, China’s auto overcapacity is 35%. According to public information, by 2015, the production capacity of the top 30 vehicle manufacturers in China is expected to reach 40 million vehicles, and the problem of overcapacity will become even more prominent. According to the general rule, if the capacity utilization rate is lower than 75% to 80%, it may not be possible to achieve break-even.

In addition, the rapid pace of new car launches is also one of the reasons leading distributors to press warehouses. Since the profit of the dealers relies on re-selling cars, it is hoped that dealers can launch more new cars to stimulate sales. The automakers' huge investment in developing a new car has a long cycle. In the fierce competition, they often take the form of a remodeled car. The fast update speed also shortens the life cycle of a car, which intensifies the inventory of dealers.

In addition to the reasons for car companies, domestic dealers themselves have problems. For example, about 90% of domestic automobile dealers' operating revenue comes from sales of new cars, and about 60% of operating profit also depends on sales of new cars. The income of dealers in mature markets comes from the proportion of new car sales is only 55%. Others are used car sales, accessories and after-sales services, and the dealer’s profit model needs to be changed.

According to industry experts' analysis, if the dealer's loss or profit decline in 2011 is a chain reaction to the rapid drop in car sales, the main reason for the poor dealers' survival this year should be attributed to the consequences of the expansion of auto companies and the pressure from stockpiling. Because compared to last year, this year's auto market did not deteriorate further, but showed some signs of recovery. The survival conditions of dealers should also have improved, but the result is the opposite.

According to statistics, despite the fact that there has been a slight increase in the Chinese auto market in 2011, the number of auto dealers throughout the country is still growing at a high rate. The number of auto dealers’ outlets increased by 21% to 16,300. While the auto market still has only a slight increase this year, the network expansion plans of many auto companies are still proceeding with great fanfare. Such a strategy will undoubtedly increase the operational risk of dealers.

A report released by Deloitte in September showed that the risks faced by Chinese auto dealers increased significantly in 2012. The debt-to-equity ratio in June was close to 85% alert level, which was a marked increase from 80% in December 2011. The inventory turnover days above the usual level further exacerbated liquidity pressures, with 48% of the surveyed dealers’ inventory turnover days exceeding the current industry benchmark of 45 to 60 days. At the same time, dealers are too dependent on the business policies and support of the OEMs, which also increases their own risks. According to the financial report data of listed companies compiled by Gasgoo.com, in the first half of this year, the revenue of the four listed automobile dealership groups (Big Group, Zhongsheng Holdings, Yaxia Auto and Zhengtong Automobile) increased by 35%, but the net profit However, it has fallen by more than 20%.

Reports on dealers' inventory pressure and capital chain fractures are also frequent. According to the "Car Dealership Inventory Survey Results" issued by the China Automobile Dealers Association in the first half of 2012, stocks of automobile dealers increased significantly in the first half of the year. Inventories of automobile dealers continued to climb in June, and the comprehensive inventory coefficient reached 1.98. According to international practice, the inventory coefficient is within a reasonable range between 0.8 and 1.2; when the inventory coefficient is greater than 1.5, the inventory reaches the alert level; and the inventory coefficient above 2.5 indicates that the inventory is too high, and the operating pressure and risk are very large.

Experts at Gasgoo Automotive Research Institute believe that the main reason behind the pressure from manufacturers to distributors is the excess capacity and the speed with which new vehicles are launched. According to estimates by many agencies, China’s auto overcapacity is 35%. According to public information, by 2015, the production capacity of the top 30 vehicle manufacturers in China is expected to reach 40 million vehicles, and the problem of overcapacity will become even more prominent. According to the general rule, if the capacity utilization rate is lower than 75% to 80%, it may not be possible to achieve break-even.

In addition, the rapid pace of new car launches is also one of the reasons leading distributors to press warehouses. Since the profit of the dealers relies on re-selling cars, it is hoped that dealers can launch more new cars to stimulate sales. The automakers' huge investment in developing a new car has a long cycle. In the fierce competition, they often take the form of a remodeled car. The fast update speed also shortens the life cycle of a car, which intensifies the inventory of dealers.

In addition to the reasons for car companies, domestic dealers themselves have problems. For example, about 90% of domestic automobile dealers' operating revenue comes from sales of new cars, and about 60% of operating profit also depends on sales of new cars. The income of dealers in mature markets comes from the proportion of new car sales is only 55%. Others are used car sales, accessories and after-sales services, and the dealer’s profit model needs to be changed.