New trends in selling cars to second- and third-tier cities


In the face of the second- and third-tier markets, Tang Bailu, which was reset to the east of the Tangshan Earthquake Museum, is a car hub that was spontaneously formed in the past. Now, due to the widening of the road, the street-facing door-faced houses on the roadside are facing dismantling. From the row of door-to-door signs that have never been removed, it can be seen that this was a sales outlet for various automobile brands providing “through-train” services, both as FAW-GAS Bao's own brand is also a luxury brand like Volvo. The dusty shops seemed to be closed soon, and the head-to-head couplet was still full of red, and it seemed to vaguely tell the passersby about the excitement of the past.

In contrast to the door-to-door demolition, several 4S stores clustered across the road have not moved, including Guangzhou Honda, Beijing Hyundai, Dongfeng Nissan, FAW-Volkswagen, and Subaru. Most of these 4S stores are owned by the huge Auto Group. In August 2009, a huge board secretary, Wang Hao, told reporters from the “Automotive Business Review” who drove that these 4S stores were not included in the scope of demolition. After the road is widened, the future will be a huge building a "car culture park", with automotive sales services as a leader, both with the vehicle culture communication function.

In the construction of the main road in Tangshan, Mercedes-Benz, BMW, Audi, Land Rover and other luxury brands 4S shop than a family. Going south along this road is Tang Bailu, where 4S stores are concentrated. Although there is no luxury brand in 4S stores, the scale is not small, and some areas are even larger. In the past, the sales model of renting a table to face the table began to be marginalized.

Tangshan is a two-hour drive from Beijing and is an important industrial city in Hebei. In the words of the local people, it is: “There are quite a lot of rich people here, and they love to compare.” From the car market situation in Tangshan, you can take a glance at the overview of the auto market in China's economically developed cities.

Some of the smaller 4S stores in the past have expanded their area or upgraded their stores because of growing market demand. In the construction of Tangshan North Road, an expanded Land Rover store covers an area of ​​over 10,000 square meters and is completely renovated according to Land Rover's global standards. This scale is also among the best in Beijing. Also on this road, a Chevrolet shop is undergoing a store upgrade. Under the pressure of the 4S store, some of the 2S stores, directly-operated stores and even cooperative sales channels that used to survive in the past have become smaller and gradually fade out, just like those on Tangbai Road in Tangshan City.

"Automotive Business Review" believes that the changes in the sales status of car sales in Tangshan City reflect a trend that is emerging in China's second- and third-tier auto markets. As 4S stores in first-tier cities such as Beijing, Shanghai, and Guangzhou have become saturated, automakers have begun to increase the number of second- and third-tier cities. Among the important second and third-tier cities, 4S shop layout is a typical symbol.

The coastal economically developed cities like Wenzhou in Zhejiang Province and Foshan in Guangdong Province are in urgent need of mentioning, and even some cities in the next level have begun to build large-scale 4S stores. For example, the largest city in Asia with the most advanced investment and the most advanced functional facilities is Baolidiao City Hall, which opened in Keqiao, Shaoxing on April 23. Since the beginning of this year, a large number of flagship stores of different brands have opened in second and third-tier cities across the country, including both luxury brands and independent brands; both coastal cities and inland cities.

The second and third tier cities are the most important positions in China's second- and third-tier markets for automobile sales. It is forming a new attractive cake. In addition to making the previously obsolete shops like Tangshan into beautiful 4S stores, various auto makers have quietly extended their tentacles to a wider range of secondary and tertiary markets, such as those in the second and third tier cities, with various other sales models. Counties and towns, such as the outskirts of a large city as a primary market.

For the sake of regional monopoly

Before unfolding, let's take a look at the 4S store scene in the second and third tier cities and take a look at the layout philosophy behind the outlets.

From Guangzhou Baiyun Avenue northbound for more than one hour, it is the famous Guangqing Avenue, which is Qingyuan's hottest street. In a street less than one kilometer long, there are more than 20 different brand dealerships such as the mainstream Jiajiao, mini-vehicles, and light passengers. These sales outlets are only secondary distribution outlets, especially Wuling, BYD, Geely and other local brand stores are quite conspicuous, and similar luxury brands such as Mercedes-Benz and BMW have almost no outlets.

Prior to 2008, Qingyuan had only one or two branded 4S stores in the local area, and the rest were all second- and third-tier automobile dealerships. The auto stores in Chengcheng have not yet become a local climate. The change took place in mid-2008, when Guangzhou Nanling Automobile Group established a Nanling Motor City in Qingyuan, led by Buick and Guangfeng 4S stores, and quickly gained a foothold. Driven by Nanling, mainstream automobile brands opened outlets in Qingyuan one after another.

“Before renting a shop on the ground floor of a residential building, the company opened a store to sell cars, and there are brands. Now, this type of store-type car store in Qingyuan Market has basically disappeared.” Ma Chunxin, executive vice president of Nanling Automobile Group, told the Auto Business Review.

Qingyuan is the largest prefecture-level city in Guangdong and has jurisdiction over 5 counties, 2 cities, and 1 district. In 2008, the number of new cars on passenger cars was 6,407, with an average monthly increase of 530, ranking 16th in Guangdong Province. Compared with first-tier cities such as Guangzhou and Shenzhen, although it is insignificant, local units and groups have a certain demand for a large number of vehicles. In the past, this part of the vehicle can only be purchased from Foshan, Nanhai and other places.

Unlike mature markets such as Guangzhou, as an emerging market, Qingyuan's dealership is basically a dominating company. There is only one agent for a brand, and there are no competitors of the same brand. And since Qingyuan is the largest prefecture-level city in Guangdong, opening a store in Qingyuan can “take all” of the entire automobile market in Qingyuan 5 counties, 2 cities, and 1 district. In Qingyuan, a store sold more than 60 vehicles a month, and the peak reached more than 100 vehicles.

Qingyuan's example reflects the current status of the 4S stores in the second and third tier cities, which basically forms a regional monopoly. The reason for the formation of monopolies is that the demand and holdings of these cities are still limited, and they are insufficient to support more than two stores of the same brand.

The same is true for large groups of outlets that are mainly located in second and third tier cities. Wang Hao said that where to set up a point, the size of the general decision by the manufacturers, dealers only participate in bidding only. At present, the second and third tier cities generally have one first and a second one after a certain period. At present, there are two stores in many areas, or have begun to build a second store, but there are very few three or more.

One phenomenon that deserves attention is that the scale of 4S stores in some second-tier and third-tier cities is currently trending toward greater demand. In general, 4S stores are divided into A, B, C, and D levels. A is equivalent to a flagship store, B-class monthly sales of about 400, C-class monthly sales of about 250, D-class minimum. Because the land prices in the second and third tier cities are cheap, the cost of building stores and labor is relatively low. For example, first-tier cities such as Guangzhou-Shenzhen are more than twice as expensive as second-tier and third-tier cities such as Qingyuan, so the scale of 4S stores in these regions has exceeded. First-tier cities.

The reason why dealers are willing to invest so much is that they hope to establish a high threshold, so that latecomers are daunted and dare not venture to build new stores, thus forming a monopoly of regional monopolies.

On April 28, Guizhou Tongyuan Automobile Company opened a new BMW flagship store. Zhang Guohua, deputy general manager of the company, told Auto Business Review that the reason why they built the largest flagship store in the country was to first occupy the hills. “Now the competition is so fierce, we built the flagship store first, and later people If you look at a city like Guiyang that has such a large store, you will not dare to build a new store to compete."

However, for dealers, due to the limited demand and retention of the second and third-tier markets, they need a certain amount of financial strength to support them. Chengdu Wanxing Chang'an Ford Sales Store is a single-brand sales store that was earlier to the second and third line cloth nets. Currently, it has opened a Changan Ford store in Mianyang, and Changan Ford and Changan Mazda stores in Deyang are under construction. Wan Xing, general manager Ren Jian told Auto Business Review: “The area of ​​the 4S stores in Mianyang and Deyang is larger than that of Chengdu, because land prices are cheaper. However, it is estimated that the investment in these stores will cost 3 to 5 years.”

Compared with single-brand stores such as Wanxing, the arrangement of the outlets of the huge group is mainly due to overall consideration. If the group wants to distribute in a certain area, and the manufacturers also have this requirement, the group will participate in the bid and try its best to win the license. Wang Hao said: "From the perspective of the overall strategy of the huge group, we will focus more on the development of outlets in the secondary and tertiary markets because the profitability of the outlets in the second and third tier cities is more promising than that of the first-tier cities."

Some common routines

In some remote Inner Mongolia Autonomous Prefectures, some signs “Chang'an House” will attract the attention of passers-by, but after entering, you will be surprised to find that there is no show car inside, but a motorcycle or appliance repair site. However, this is still a sales point for Changan Automobile. Although there is no current car, it is responsible for collecting customer purchase intentions, which is equivalent to a information station. This may be the simplest automobile sales network at the most basic level.

“Chang'an House” is an effective sales model promoted by Inner Mongolia Lifeng Automobile Group. Inner Mongolia is sparsely populated. Some counties have a very small population. Such a region cannot even support direct sales stores. Therefore, this kind of special cooperative sales model can only be adopted.

Guo Chaolei, head of the Lifeng Automobile Group's marketing planning department, told the Automotive Business Review: Currently, Li & Fung mainly has four models in the second and third tier cities: In the more economically developed regions of Ordos and Tongliao, the 4S stores are generally used; It is based on 2S shop; further down is the cooperation channel; the smallest is the information station.

In order to avoid taking up too much money, dealers develop secondary outlets generally adopt cooperative development models, that is, seek local partners at secondary outlets.

For example, 4S stores provide brand, supply, management, and partial funding. Local dealer partners provide venues, facilities, and personnel to implement sales profit sharing. In the aftermarket, parts are provided by 4S stores, and certain quantities are charged according to the number of accessories. Working hours. The form of management is generally to provide certain dealership dealers with certain business policies. For example, a good-selling vehicle requires a full vehicle, while a general vehicle requires a 50% deposit. For Li & Fung, it mainly performs business management and does not participate in the management of the agent's own business.

The cooperative channel model was adopted by many manufacturers early on, especially in the early days when the amount of ownership was small, so that the cost savings could be maximized.

With the increase in sales volume and retention, manufacturers generally set up direct-operated stores or 2S stores, which will help improve brand image. Directly operated stores are generally only showrooms, which are resolved through an authorized service station. 2S shop is the exhibition hall and maintenance workshop together, the general exhibition hall is small, but the maintenance workshop is not necessarily small.

On the surface, there are few secondary outlets, but in reality, the profits of the secondary outlets are not high. The secondary outlets rely on price advantages, so the prices are much cheaper than the 4S stores. Guo Chaolei said that there are no advantages in sales at county outlets. Therefore, Li & Fung's outlets mostly have maintenance workshops.

For some brands with low profits, there is a more cost-saving model, that is, sharing a comprehensive exhibition hall in front, sharing maintenance services behind. For example, brands such as Wuling, Chang'an, and Hafei, generally do some simple isolation and put it in a hall.

Of course, whether this can be done depends on the requirements of the manufacturers. For example, in Ordos, because the local market is large enough, Wuling has asked for an independent 2S shop. Similarly, some self-owned brand low-end sedans may temporarily adopt such a comprehensive exhibition in the early days when the market capacity is relatively small.

In Zunhua's “Big Group Auto Market”, which is a one-hour drive from Tangshan, “Automotive Business Review” reporter saw a variety of modes coexisting. There are both truck stores and 2S shops and direct sales stores in the market. , And comprehensive exhibition hall.

Into the market, the left is a commercial vehicle 4S shop cluster, large-scale. On the right is a row of car sales shops, one is carrying a family, the door faces of these stores are roughly the same, if not the name of the brand on the door of the signboard, it is difficult to see the brand characteristics from the appearance. The same is true of the front door, some of which are 2S stores with maintenance workshops behind, while others are direct sales stores without maintenance workshops.

The sales manager of a FAW Toyota 2S shop in the market stated that the majority of the secondary branch outlets of the huge branch are only exhibition halls and there is no maintenance, which mainly depends on the amount of local ownership. Some areas with large holdings, such as FAW-Volkswagen and Beijing Hyundai in Qian'an, Hebei, are 2S stores with maintenance.

In the comprehensive exhibition hall of the market, there is basically no brand differentiation, and multiple brands of sedan models are placed in the same hall. At the conspicuous entrance of the hall, a SAIC-GM-Wuling Lechi and a Chery QQ are placed side by side. The promotional banner reads "Chevrolet Le Chi's Anniversary Store 36,800 yuan fine mini car to go home," and the other one reads "26800 yuan limited edition. Version Chery QQ opened home."

In the outdoor open space of the market, there are many vans parked, including Wuling, Chang'an and Changhe. Correspondingly, a Hafei 4S shop in the market is particularly eye-catching. For this pattern of obvious contrast, Wang Hao said that because local brands are not very demanding on the construction of stores, there is greater autonomy in terms of the size of the stores under construction.

The Zunhua Comprehensive Market, a commercial vehicle and passenger vehicle sharing model, is not unique to the market. "Automotive Business Review" understands that in other parts of the country, a similarly comprehensive market with a large scale, there are more than 50 acres of medium-sized area, in a larger center city, the comprehensive market area reaches 150 to 200 acres, a small-scale county The market is about 10 to 20 acres.

Seeking a model breakthrough

Sichuan Yibin is famous for producing Wuliangye. However, the auto market here is relatively underdeveloped. Ten years ago, Sichuan Shenrong Automobile Group established the Shanghai VW special repair station here. Until 3 years ago, the repair station was transformed into a 4S shop.

In addition to the Shanghai Volkswagen 4S store, Shen Rong also has Chery, Skoda and Roewe Direct Stores and Shen Rong Auto Market here. However, such a scale pattern is far from what Shen Rong wants. After a long period of careful consideration and field examination, Shenrong Automobile Group plans to build an automobile park in Yibin.

The chairman of Shen Rong Group, Cao Chuande, told Auto Business Review: “The Buick, Chevrolet, Dongben, and Chery stores in the park are currently under construction. If there is no accident, one day of the year, the four stores will open at the same time. The introduction of another 4-5 brands is also under negotiation."

According to Shen Rong planning, the auto park will form a 4S shop cluster. Although each brand store is independent, it is not only convenient for consumers to buy cars, but also some integrated equipment and value-added service functions can be shared with each other. Shen Rong is one of the five largest automobile sales groups in Chengdu and currently represents more than 10 mainstream brands. This background has laid the foundation for building a car park. However, such second- and third-tier cities as Yibin, if set up a single 4S shop, it is difficult to support, such as the Shanghai Volkswagen raised for 10 years to reach the conditions for the establishment of 4S shop.

In order to resolve this contradiction, Shen Rong began to explore the model. The original idea was to build an independent exhibition hall in accordance with the standards of the manufacturers, and to share management platforms such as after-sales, finance, and marketing. However, this idea is in conflict with the unique operating model of the 4S brand that is currently being pushed by automakers. Therefore, it has evolved into the current model.

Shen Rong Group Marketing Director He Ling said that although the current sales model does not break through the 4S model, but in the marketing, value-added service links can still bring scale effects and cost savings, such as shared lounge area, household center, insurance center, decoration center Wait.

Chen Xihui, president of Huijing Automobile Group, believes that the model cannot be set in stone but should change with changes in the market environment. The veteran car salesman from Taiwan stated that in the smaller secondary and tertiary markets, since there are only 20-30 units of monthly sales, independent sales outlets are difficult to support. How to do? You can consider placing 3 brands side by side and the exhibition halls are independent, but they can be shared after sale. There are only one responsible person for the three brands, which can save costs.

However, this model is more difficult to implement at this stage, especially in China. The first is that China has a large geographical area, and the supply of spare parts is much more difficult; in addition, it is more difficult for workers to master maintenance techniques for multiple brands. Therefore, the current post-sale sharing is limited to some simple maintenance and repairs.

The "Automotive Business Review" noted that BYD's dealerships in Shanghai are even more innovative. For example, on the edge of a smaller market, they adopt a model of cooperation with local repair shops: dealers place the show car in the showroom in front of the repair shop. In-house sales, in return, auto repair and maintenance are authorized for this repair shop. Of course, the required parts and components are provided by the dealer, thus achieving a balance of interests.

Some auto makers are also exploring patterns. For example, Geely piloted auto supermarkets in some cities and put all of Geely's brands and products in one store. However, it is currently limited to small-scale trials. In addition, it is preparing to promote quick service shops in 1,000 cities in China. Through these small exhibition halls with low thresholds and quick maintenance, Geely's sales and services can penetrate into the third and fourth-tier markets.

However, an indisputable fact is that now some high-end luxury brands still use 4S stores as their mainstay. These brands rarely develop secondary networks. One is fear of disrupting prices, and the second is fear of unfavorable brand image. This is why in some ordinary second and third-tier cities, these brands are still the reason for the appearance of the 4S shop.



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