Automotive sales season, dealers complained that only 5% of profits

In the traditional sense of the automobile sales season, “Jin 9 Silver 10” is approaching, but recently the reporter interviewed relevant persons in Dongguan’s car dealerships that although sales of “Jin 9 Silver 10” cars can be greatly improved, the profit rate is hard to increase. Industry sources told reporters that the profit rate of vehicle sales in Dongguan is generally below 5%, and the automobile sales industry has entered the era of meager profits, which is mainly due to the gradual saturation of the market.

Dealer: Sales profit is only about 5%

Whether or not "Jin 9 Silver 10" can increase sales, many car dealers in Dongguan are full of confidence. Among them, Guangzhou Automobile Guangda Honda 4S store is expected in September sales will increase by 15% to 20%; Longhua Infiniti 4S shop is more confident that the September sales in August on the basis of an increase of 40% to 50%; Landwind Automobile Dongguan distributor Landwind also expects sales to increase by 20% in September.

At the same time, the relevant person in charge of a number of car dealers stated that during the “Golden September, Silver Year 10” period, the price of the car will remain stable, and there will be no further significant price cuts. The reason is that in the previous three consecutive months of the off-season, dealers have made room for price cuts in order to increase sales volume as much as possible, and the existing price concessions are the bottom line that dealers can afford. Although the prices will not fall any more, many dealers have indicated that they will use extra gift packages to attract customers, which will increase operating costs. Therefore, a number of industry insiders said that although sales during the “Golden 9 Silver 10” period have improved, the profit margin has been difficult to increase, and dealers have adopted “micro profit taking” sales methods.

A number of dealers related to the reporter revealed to reporters, now Dongguan's vehicle sales have entered the era of meager profits. Most car dealers have a profit margin of only 5% in the sales of automobiles, and some even as low as 1%. Some car dealers even digested the national III cars that would not be on the cards and sold them at a loss.

Analysis of the causes: market demand has become saturated

According to reports, the "micro-profit" phenomenon in the auto market in Dongguan is no longer an eve. The profits of auto dealers' sales are decreasing year by year. The main reason for this is that the auto market in Dongguan has gradually become saturated.

As one of the "rich first" Pearl River Delta cities, the rapid economic development in Dongguan has also led to an increase in car sales. However, after years of development, the demand for cars by Dongguan citizens has gradually been met and the market is gradually becoming saturated. As the "cake" becomes smaller and smaller, the dealer's profits are gradually reduced.

According to a number of industry insiders, the automobile market in Dongguan has entered a meager profit. In addition to market saturation, there are two other objective reasons. First, although the international financial crisis has passed, the Dongguan economy has not yet fully recovered, coupled with the continued weakness in the stock and property markets. Affected consumers’ confidence in consumer goods such as automobiles, etc. Secondly, Dongguan has a large number of brands and the competition is very fierce. Under the circumstance of shrinking profit margins, many dealers’ “you fight for us” is the market. The smaller the cake is, the thinner and the thinner it is.

In addition to the above-mentioned objective reasons, the sales pressure from auto manufacturers is a subjective reason for forcing auto dealers to “make profit”. As most car dealerships have signed relevant agreements with manufacturers, if they can't complete the sales tasks stipulated by the manufacturers (the number of tasks is more than the number of cars sold), they will be liable for breach of contract; if the sales tasks stipulated by the manufacturers are fulfilled, certain Amount rebate award. Therefore, under strong task pressure, dealers can only sell cars by means of thinning profits to increase sales.

Public opinion

Making a car is a profitable business

Regarding the question of whether the profits of auto companies are rich, the reporter interviewed several ordinary citizens. They all think that it is relatively easy for auto companies to make money, but they also realize that the profits of auto companies mainly come from after-sales service rather than from vehicle sales.

At the same time, Mr. Qi, who owns BMW and Prado, is an automotive enthusiast and usually pays attention to the auto market information. He believes that the profitability of car dealers is relatively high, but the investment cost is also relatively high.

Miss Li, who was once involved in the automotive industry, also believes that car dealerships are a lucrative business, but the profit comes mainly from sales. "Car dealers will be able to receive rebate support after completing the sales tasks set by the manufacturers, and most of the advertising costs are provided by manufacturers, so I think it is not difficult for car dealers to make money," Miss Li told reporters.

The public, Mr. Yang, has not bought a car yet, and he does not know much about the auto industry. However, he thought, “The days of the dealerships look very good, and they often engage in activities, such as sweepstakes, and the decoration of the store is also very decent. So, I think the dealers are still very profitable.”