Background: The three brands of Beverly, China, and Hainan Mazda cars in a certain car market in Beijing are seeking for transfer. The transfer price of a huge 4S shop in Chengdu has been reduced from the original 18 million to 15 million. Some dealers in Shenzhen that operate Nissan, FAW-Volkswagen and Fiat have begun to sell stores. Since April 2004, Beijing has basically had one or two 4S stores closed every month.
Li Jun: The 4S shop is a trap for multinational companies in China.
Reporter: Why can you see it?
Li Jun: Foreign automotive multinational companies have designed a three-step marketing strategy in China. Through a three-step approach and 4S shop approach, they gradually control China's automobile circulation.
Reporter: What are the three steps?
Li Jun: The first step is to control the manufacturer. Volkswagen and Toyota are increasing their control over Chinese domestic manufacturers. First on the vehicle, then on the parts. FAW-Volkswagen, Shanghai Volkswagen will soon be about to become the public - FAW, Volkswagen Shanghai. China’s control over automobile production will become weaker and weaker.
The second step started after the manufacturer was controlled. Manufacturers are very demanding on dealers, the exhibition hall area is large, the decoration is luxurious, and more than one store must be built in one city. The rebate of these low-level and repeated 4S stores with huge investment amounts to the final say by the manufacturers. Multinational companies have long been a good 4S shop in what kind of rebate is to fall.
The third step is that when these 4S stores are unsustainable, multinational corporations will again acquire low-priced products, re-integrate sales resources, and use China's high investment in building 4S stores to control China's auto sales.
Reporter: Why do multinational companies have to control China's auto sales?
Li Jun: Nowadays, the profits of automobile production in the world are 3%~5%, the profit of automobile sales is 8%~10%, the profit of after-sales service is 10%~15%, and the multinational company sees the sale and after-sales service. High profit. The most fundamental thing for a multinational company to come to China is to look at China's huge auto consumption market, not China's auto manufacturing plant. The purpose of multinational companies controlling sales channels is to control the market.
Background: In 1986, when Shanghai Volkswagen was founded, the right to sell products was controlled by Shanghai Automotive Industry Sales Corporation. In August 2000, the sales right was transferred to SAIC Volkswagen Sales Co., Ltd. The sales company, China VW, accounted for 30%, Shanghai VW took 20%, and SAIC Group took 50%. In 2003, many Shanghai Volkswagen and SAIC Volkswagen sales companies exchanged senior executives.
Toyota and FAW established a joint venture sales company in Changchun, Tianjin and Sichuan. The joint venture production base is only responsible for production, and sales are handed over to the joint venture sales company. The Japanese side has a great deal of discretion in the selection of dealers.
Reporter: As you said, multinational companies require 4S stores this way to control China's auto sales market?
Li Jun: Yes. Foreign countries have much higher income levels than China, but foreign 4S stores do not have high demands from China. "Luxury" is the factory's request, the factory is not to trap a lot of 4S shop is what?
Background: The scale and grade of Chinese 4S auto brand stores are second to none in the world. Even the most developed US 4S stores in the world cannot compare with the hardware facilities of Chinese 4S auto brand stores. For example, the 4S shop of Fuji Heavy Industries Subaru Automobile Co., Ltd., which is invested by Jidong Trade and Industry Group Co., Ltd. in the country, covers an area of ​​30 acres, a building area of ​​5,400 square meters, a car showroom of 1,100 square meters, a maintenance workshop of 1,150 square meters, and 161 sets of maintenance equipment purchased. . The store was also specially built as a test venue. The perimeter of the test runway is 262 meters long and the approach road is 62 meters. Among them, the slope of the test driveway is 6 degrees east and 8.5 degrees west. The friction coefficient of the test lanes was 0.3, water 0.17, and ramp 0.16. Most of the stores are invested and built by dealers themselves. Automobile manufacturers invest a small amount of capital or even no investment. Each manufacturer will have a number of 4S stores in each city, such as Shanghai Volkswagen's 3S stores in Beijing.
Reporter: Do you think the current 4S shop has a great crisis?
Li Jun: Yes. It is not the point that the Chinese automotive marketing industry is facing a crisis, but the entire level. In 2005, once China's automobile circulation areas are opened to foreign capital, for many 4S stores, it is simply sheep entering the wolf's mouth. These 4S stores in China have exhausted their energy in fighting for agency rights, developing sales channels, and promoting their brand image. They encountered the current downturn in the auto market. Those expensive shops do not have the means to recover their investment. It is difficult to maintain even these four stores. . Some brands of 4S shops have now begun to transfer. It took hundreds of thousands of yuan to buy the 4S shop's agency right now, and it took hundreds of thousands more to throw out.
Reporter: Are foreign car sales companies threatening Chinese domestic auto companies?
Li Jun: Of course. Overseas car sales companies and auto finance companies have strong capital and management experience. After entering China, if they acquire a group of 4S stores, they will form a strong chain store after integration. At that time, the foreign car sales company was an aircraft carrier, and our Chinese 4S shop, which was doing well in the local market, became a small board. I am afraid it was not an opponent of foreign companies.