Automotive Observer ADP Dealer Services Column
(经销商为什么跑路?)
Why Automobile Agencies Deviate From the Right Track?
The Jack Jia is the editor chief of Auto Business Review and responsible for the magazine’s daily operation and editing. Auto Business Review is a high‐end auto publication, providing auto industry reports and comments. It closely follows the automobile development trends in China and global markets. To satisfy local readers’ intellectual needs and boost the innovation spirits in China’s auto industry, it aims to become an opinion leader of China's automobile industry, offering stories from both local and global perspectives.
Key Message Delivered
l To avoid the dilemma of deviation from the right track, the only way for automobile agencies is to conduct reform.
l To be specific, the road is to change the irrational profit model of business structure,proactively adjusting managing strategy as well as the operating model, in order to strengthen the key passage to boost profits.
l Meanwhile, automobile agencies themselves should keep eyes on internal management control, since it is an efficient way to success
Feature Summary
In October, Li Jing, manager of 3 Dongfeng Citroen 4S stores in Suzhou,fled from public views. This controversial issue triggers a thoughtprovoking debate among media. The reason behind it, however, can be summarized as 2 points. The first is the dire situation of new automobile market, and the agencies themselves are lacking of value‐adding services.While the second is Li Jing is too ambitious to enlarge probabilities on various aspects, in the end the capital chain of her 4S stores was broken.
The issue epitomizes a whole picture of automobile market: since China’sautomobile market is already mature, in other words, the competition is too fierce, and the after‐sale market too backward, causing automobile agencies to step up efforts to launch branches. The philosophy is crystal clear: the gap between each new branch is so short, so in the face of rosy economic situation of automobile market, tight bank lending standard,plus various internal difficulties such as the skyrocketing costs both of human resources and operation, the automobile agencies are suffering weak cash flow.
The anecdotes like this are beyond enumerating, the thing we are discussing here is how to avoid it happen again. The only way for automobile agencies is conduct reform. To be specific, the road is to change the irrational profit model of business structure, proactively adjusting managing strategy as well as the operating model, in order to strengthen the key passage to boost profits. Meanwhile, automobile agencies themselves should keep eyes on internal management control,since it is an efficient way to success.