The effect of auto market performance adjustment

Since 1997, China's passenger vehicle market has experienced six growth peaks. The most recent peak appeared in 2016. After two years of market downturn, the market ushered in a recovery of growth. Although the slowdown in the growth of China's auto market production and sales this year is a foregone conclusion, the anti-risk capabilities of dealer groups that have experienced strong winds and waves have improved significantly. Medium and large-sized, medium-sized, and small- and medium-sized distributor groups have basically maintained stable operations and increased profits. Wang Chunyan, President of Al-Qaeda Research Institute, analyzed the reasons in the keynote speech “Operation and Development of Dealer Group” through survey data.

She divides China's distributor group into four categories: A, B, C, and D according to their scale: Class A is a medium-sized, middle-to-large-sized regional leader, with a wide range of operations, a large scale, and a large number of operating brands; Class B is a small and medium-sized group. Luxury brands are more important; category C ranks among the top 20 in the top 100; category D is a small regional group.

Wang Chunyan focused on the analysis and comparison of the data characteristics of Group A and Group B. In terms of the size of the company, the increase in the number of 4S stores in the first half of 2017 was lower than that of last year, which indicates that many groups no longer emphasize the increase in revenue from the expansion of the number, but rather increase their income through increased management efficiency. In particular, the growth in the number of outlets of Group B in 2016 was 12.5%. The growth rate in the first half of the year was 7.4%, a significant drop.

From the point of view of the total sales of vehicles, the growth rate of sales of Group B for consecutive years was higher than that of Group A. According to Wang Chunyan's analysis, the main reason is that they use the potential of tapping existing outlets as the main means, supplemented by additional outlets. Similarly, the increase in the operating income of the Group B is also higher than that of the Group A, mainly because of the high proportion of luxury brands in their brand structure, so the production value of the bicycles is high.

Profitability includes changes in gross profit and changes in net profit. In the first half of 2017, the gross profit of the Baiqiang Group reached 7.3%, and its net profit reached 2.0%. The profitability of both A-group and B-group has improved compared to last year, but it is noteworthy that the profitability of A-groups has risen and fall each year, closely related to the cyclical changes in the automotive industry, and the B-group has maintained its annual Steady growth.

Wang Chunyan analyzed that this benefited from the early start of the work of improving the management efficiency of Group B. The source of profit was more from the improvement of management capabilities and operational efficiency, rather than from the management cost savings, and they paid more attention to market changes. Clearly predictable market supply and demand trends, fully learning and referencing international leading operational management concepts, early start of internal group operation benchmarking, establishment of personnel training and benchmarking system, setting of business objectives, comprehensive planning, implementation, inspection, and actions The process and actively communicate with other dealer groups.

At the annual meeting, Song Tao, Deputy Secretary-General of the China Automobile Dealers Association, released the 2017 annual research report on the benchmarking of China's auto brand operations, aiming to analyze the different aspects of the brands, departments, and distributors of the automobile circulation industry in China. The gap hopes to provide investors with data references for long-term stable returns.

Song Tao said that with the dual impact of resource endowment and the new Internet marketing model, Chinese auto dealers are facing unprecedented challenges, and extensive operations have entered a new era of profit and loss, how to transform and upgrade, and how to achieve refinement Management and operations are critical.

The Kaida Research Institute summarized and analyzed the survey data of 5,000 stores of 40 mainstream brands of passenger cars in the first half of 2017. The comprehensive gross profit rate of the automobile circulation industry was 8.4%, and the pre-tax profit rate was 2.96%. Gross profit of vehicle sales For 5.72%, after-sales service gross profit margin was relatively high, at 43.59%. In terms of dealers' inventory risks, the inventory ratio of dealers in 2016 was 1.32. In the first half of 2017, it was 1.74, which was higher than last year.

The zero service absorption rate (that is, the higher the ratio of profit generated by after-sales service to dealer operating costs, the higher the post-sales profit is, the better) the report shows that the 2016 dealership index was 53.3%, and there was a significant increase in the first half of 2017. The increase has increased to 68.8%. The report shows that after the after-sales service operation, the European and Japanese brands performed better, and the Chinese brands performed generally. It can be seen that Chinese brands are still the main vehicle sales. The luxury car brand has the strongest after-sales service ability. After-sales service has a gross margin of 46%, and the zero-service absorption rate is as high as 79.8%.

In terms of comprehensive brand profitability, the Japanese brand had the strongest overall profitability, at 3.71%, followed by the European system at 3.14%, the Korean system at 2.02%, the US Department at 1.30%, and the Chinese brand at the weakest level at 0.89%.