China News Service, January 23 (China News Business Reporter Ge Cheng) Recently, news that a car dealer group has encountered a crisis in its operations has attracted attention.

According to multiple media reports, the dealer involved is Guangdong Yongao Investment Group Co., Ltd., and the 4S stores of many of the group's brands have been closed.

  This is not the first time in recent years that 4S stores have attracted public attention due to their operating conditions.

What happened to the car dealers?

Yongao encounters operating difficulties, what should we do with the cars in the 4S store?

  Recently, it was reported that Yongao Group admitted in an announcement that the company's operations have recently encountered a crisis and is taking measures to protect the rights and interests of employees and ensure the delivery of customer vehicles.

The reporter noticed that the announcement was stamped with the seal of "Guangdong Yongao Investment Group Co., Ltd."

  According to CCTV News, in response to this matter, Nancheng Street and Liaobu Town of Dongguan City have formed an investigation team and have taken measures such as asset preservation in accordance with laws and regulations to actively protect the legitimate rights and interests of relevant personnel.

In view of the arrears of employee wages, the government investigation team has sent personnel to Yongao Company to register personnel information and search for relevant evidence; in view of the difficulties in vehicle delivery, the government investigation team has investigated and registered the vehicle delivery situation of the company's 4S stores, and prioritized the protection of the company's 4S stores in accordance with the law. The legitimate rights and interests of car owners who purchased the car in full.

  Tianyancha information shows that the company involved has a registered capital of 200 million yuan, and its business scope includes agency motor vehicle registration and related services, second-hand car brokerage, distribution and transaction consulting services, car rental, and agency car mortgage loan procedures.

  The reporter called Guangdong Yongao Investment Group several times, but no one answered.

Subsequently, the reporter called the service phone number of some 4S stores owned by Yong'ao, but there was also no answer.

  Upstream News quoted multiple posters as reporting that Guangdong Yongao Group's stores were experiencing "delays in vehicle delivery."

At the same time, many consumer complaints reflected problems related to Yongao Group, mainly focusing on cars without license plates and cars that have been paid but not picked up.

According to the Daily Economic News, multiple tow trucks towed away the commercial vehicles of Guangdong Yongao 4S store for property preservation.

  Regarding the ownership of these vehicles, Yan Bing, senior partner of Beijing Times Jiuhe Law Firm, told reporters that for consumers who have paid the car purchase price, if the vehicle belongs to the seller, the bank does have priority over the mortgaged vehicle. If the vehicle has been registered or "delivered", then the property rights of the vehicle no longer belong or do not fully belong to the seller. At this time, the bank's rights will also be restricted and cannot exercise the mortgage right unscrupulously.

  Yan Bing said that according to the provisions of the Civil Code, when the principal debt performance period expires and the debtor fails to perform the debt, the transferee of the mortgage must retain the ownership of the mortgage and prevent the ownership of the mortgage from being lost due to the creditor's auction of the mortgage. The right to pay off the debt on behalf of the debtor and thereby eliminate the mortgage right.

Therefore, consumers can completely negotiate with the bank to top up the price, continue to complete the car purchase transaction, and obtain the ownership of the vehicle.

  Several trailers appeared at the entrance of Dongguan Liaobu Automobile City.

Video screenshot

Is the 4S store model facing the end?

  The reporter learned that Guangdong Yongao was once a large-scale automobile dealer group in Guangdong, and was once on the list of the top 100 domestic automobile dealer groups.

  Just about half a year ago, Pangda Group, the first domestic automobile trader to list on the A-share market through an IPO, was officially delisted from the Shanghai Stock Exchange.

Pangda Group was once the largest car dealer group in China, with more than 1,400 outlets at its peak and a market value of tens of billions of yuan.

  As competition in the auto market becomes increasingly fierce, many car dealers, like Yongao and Pangda, are facing survival difficulties.

Data shows that in 2021, more than 1,900 car dealers across the country have closed down and withdrawn from the network. By 2022, this number has increased to 4,000. According to incomplete statistics, in the first half of 2023, 1,500 dealers have withdrawn from the network. .

  The "Survey Report on the Survival Conditions of National Automobile Dealers in the First Half of 2023" released by the China Automobile Dealers Association shows that in the first half of 2023, 50.3% of dealers suffered losses, 35.2% made profits, and 14.5% remained flat.

After comparison, it was found that the losses were at a high level in recent years.

  Why do car dealer groups suffer losses?

Industry insiders told reporters that due to multiple factors such as the external environment of the automobile market and the continued decline in terminal transaction prices, the operating pressure of automobile dealers continues to intensify. At the same time, dealer maintenance income is also being snatched away by chain automobile service brands.

  In addition, with the rapid rise of new energy vehicles, new marketing models are also rapidly changing the market.

At present, a large number of new forces and new energy car companies use the direct sales model to sell new cars.

Production capacity is determined through pre-ordered quantities when products are released, reducing inventory pressure and further reducing car companies' dependence on traditional dealers.

  Data map: Domestic new energy vehicles are "ready for use" at Haitong Terminal in Shanghai Waigaoqiao Port Area.

Photo by Pu Fan

How to break the situation?

  Under the above background, how should traditional car dealer groups break the situation?

  According to Lang Xuehong, deputy secretary-general of the China Automobile Dealers Association, traditional dealers should focus on derivative businesses such as after-sales, financial insurance, and second-hand cars.

"In the first half of 2023, compared with the new car business, the gross profit contribution of the dealer's after-sales business increased, reaching 55.4%."

  Data from the China Association of Automobile Manufacturers shows that in 2023, my country's automobile production and sales will total 30.161 million units and 30.094 million units, a year-on-year increase of 11.6% and 12% respectively. Production and sales hit a record high, achieving double-digit growth.

At the same time, automobile exports reached a new high, with 4.91 million complete vehicles exported and 1.203 million new energy vehicles exported, a year-on-year increase of 77.6%.

  Some insiders believe that behind the 30 million vehicles, there is a large demand for replacement.

In 2024, there is still room for growth in my country's automobile production and sales.

Traditional car dealers should take advantage of the trend, play a role in the field of second-hand car circulation, and achieve further development.

  According to Zhang Xiang, a researcher at the Automotive Industry Innovation Research Center of North China University of Technology and director of Vodafor Digital Automotive International Cooperation Research Center, the next step is for Chinese car companies and dealers to speed up the process of internationalization and extend the advantages of the automotive industry overseas.

We must rely on dealers to build local parts warehouses, conduct auto finance, and conduct marketing promotions, which will create huge room for growth.