auto dealers: fewer costs high efficiency

The year 2009 will soon be over. Citing an undisclosed source from SOHU AUTO, Smoothly coming through the financial crisis of the 2008, Chinese automobile distribution sector has not only achieved a spectacular performance in sales and profits in 2009, but also is undergoing a historic transformation.

By the chance of the SOHU AUTO WEEK, SOHU AUTO launched an interview of the transformations and trends of Chinese automobile distribution sector in 2009. Through different perspectives of distributors and experts, the interview was target at making a objective analysis of the achievements and problems of Chinese automobile industry calmly and deeply.

Here is an introduction of the interview guests: Mr. Pang Qinghua, Chairman and General Manager of Power Diversity Automobile Trade Group, Mr. Zhang Yueren, CEO of Jia Hua Holdings limited and Mr. Luo Lei, Deputy Secretary-General of China Automobile Dealers Association.

　　Trends in the field of automobile circulation

Moderator: This year the channels of automotive marketing have been changed significantly. Specifically speaking, what areas have the most historic changes taken place in?

Lei Luo: To me the five key points are combination, brand, integration, focus, attention. In particular, the advantage of combination is fully demonstrated this year. The pace of the combination of dealers companies is accelerating. I believe president Zhang and Pang have both witnessed expansion of network this year.

Second, dealers are beginning to focus on the creation of their brands. The several relatively larger domestic groups such as Power Diversity Automobile Trade Group, Jia Hua Holdings limited, Yuantong group and Guangdong Auto dealer under Guangdong Materials Group Corporation , which are all self-owned brands of the dealers, mark the maturation of automobile distribution sector.

Third, the integration of the domestic 4S shops was just started. Combing their large number of 4S shops in different areas effectively instead of letting them operate separately, some groups have greatly improved the overall operational efficiency.

The fourth point is the focus. Both the central policy and the market show a trend of outward extension this year. The auto market has expanded from the central cities to the periphery, that means to the second, third and fourth line cities. Meanwhile, the dealers also have begun to pay attention to the county-level cities in the course of network expansion. Sales service network have even been built in some prosperous towns.

The Fifth point is attention. Referring to attention, it does not merely mean our circulation enterprises have concerned more about ourselves, but also the society is paying more attention to circulation enterprises, which is more important. Let me show you a simplest example. The financial industry, including foreign investment companies are seeking for cooperation with developing domestic automobile circulation enterprises that have a demand for capitals. Some funds also have a very high concern about us.

Pang Qinghua: During China Automobile Dealers’ Annual Meeting that just concluded I made a statement which included three main points, the first is the combination of dealers is an inevitable development path, and the second point is it’s very important to seize the opportunity and take advantage of the central policies. The third one is the building self-owned brand need self-restraint and brand awareness. For me, these are the inevitable trends of development for China’s auto dealers.

Zhang Yueren: to our view, the channel has undergone great changes this year. First, the government’s plan to revitalize the modern automobile service industry has given us a hint the dealers need to continuously improve their service level and expand their business. The functions such as consumer credit, borrowing, secondary replacement, insurance as well as auto decoration need to be completed. On the other hand, now the service level has been improved.

The second point is the channels of the manufacturer. The biggest feature is the dealers have begun to enter into the second and third line cities. The brands are more fulfilled in some places.

The third one is the combination of the dealers. Under the intense competition, the trend of integration has been demonstrated more obviously since last year. Objectively, the regional integration is basically finished. Conforming to this trend, Beijing and Hainan are expected to enter into the process of combination gradually in the future.（translator：Yalong/Jessie）

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