Dealers Pacing the Road: The Capital Chain of Automobile Circulation Tested

On October 13th, a female boss in Suzhou, due to borrowing billions of yuan and problems in the capital chain, ran for money. The reason is nothing more than the cold weather in the auto market, dealers in the automotive circulation sector can not afford the pressure due to capital chain fracture. A fragile financing system and a single source of profits have led car dealers to take risks and eventually go astray.

Dealers run the road "Every year has"

The female bosses of Suzhou left behind the three Dongfeng Citroen 4S stores they had represented. Hundreds of consumers faced the dilemma of being unable to mention cars. They were located in Guoxiang, Wuzhong District, Suzhou, Mayun Road, Suzhou High-tech Zone, and Lianyungang City. Wages have not been resolved so far.

According to media reports, Dongfeng Citroen has sent a working group in Suzhou to comprehensively sort out the status of its customers in order to solve problems. Currently, they are understanding the status of orders, the status of owners who have paid the full amount but have not mentioned the car owners.

As a manufacturer, in the face of dealers "flashback", more expressed helplessness, "this matter has a greater impact on Dongfeng Citroen, our sales in Jiangsu has been good, the future of our brand, auto aftermarket maintenance are subject to Impact.” Dongfeng Citroen staff said.

It is undeniable that under the general background of the general downturn in the auto market, the tightening of the capital chain of dealers and the poor sales of the brand market cannot be separated. Dongfeng Citroen was one of the first joint venture brands to enter the Chinese market. However, compared to Volkswagen, Toyota, and other multinational automobile companies that have achieved a volume of one million cars entering the Chinese market, Dongfeng Citroen's sales target for this year is only 23.55. With 10,000 vehicles, the market share was only 1.85%, showing a somewhat slow pace.

A 4S shop manager of a certain brand in Beijing who has been engaged in car sales for nearly 10 years said that although it is not clear whether the distributors of the above roads have broken the capital chain due to poor car sales, it is certain that the financial pressure on dealers this year is obvious. Greater than in previous years.

"For dealers, a store needs more and more liquidity, and with a new car taking up 150,000 yuan, the capital of a 100-seater car that occupies 4S stores will reach 15 million yuan, plus personnel expenses and other expenses. A store needs at least 30 million liquidity funds. According to the industry regulations, usually about 70% of the funds come from bank loans, said the industry insiders.

Under such circumstances, the dealer’s cash flow becomes very fragile when the external environment such as the downturn of the macroeconomic situation and the rate hike of banks is tightened, coupled with the pressure of weak end-market demand and increased labor costs. .

Two years ago, Zhong Yi Da Group, which had a history of selling cars for 14 years, operating nearly 10 auto brands, and having more than 100,000 customer resources, was included in the Jindazhou Group due to the collapse of the capital chain. The reason is that the continuous tightening of monetary policy during the year led to a continuous decline in credit grants that the entire group could obtain from banks, liquidity turnover was not working, and a series of chain reactions that directly affected the most basic business aspects.

Last year, events of the same nature were staged again. Guangdong South China Sea South China Motor City Dongfeng Yueda Kia Yue Ya 4S shop, Dongfeng Xiaokang, Dongfeng Citroen, Dongfeng Wind nerve sales store at the same time people go to the empty, the main reason is that the four store owners diversified investment losses, resulting in a bank loan Did not get, then affect the 4S shop's cash flow.

Financing channels for a single <br> <br> for car dealers in the automobile market is not good diversification mode of operation, Deputy Secretary General of China Automobile Dealers Association, Luo Lei believes that auto dealers focused on doing car sales, development and success The key, diversified and cross-industry operations are extremely unfavorable to their own development. “If the funds originally used for car sales are not used indiscriminately, the dealers will not break the capital chain.”

According to report, the current top car dealership groups have tried to diversify in order to get rid of the single profit model in which the proportion of new car sales is too high, but the direction is limited to the areas related to car sales, such as auto finance and modified cars. And other fields.

For example, Zhongsheng Holdings acquired a 70% stake in Carlson Automotive Technology Co., Ltd. to enter the modified car sector. Carlson is a world-class car modification company with more than 20 years of history in Germany. It specializes in the design of automotive supplies and parts, as well as high-performance professional conversions based on the Mercedes-Benz brand cars.

For another example, the giant group also started to enter the field of modification, financial leasing and other fields. Liantuo Group also announced that it has reached a cooperation agreement with an automobile manufacturing, agency and insurance joint venture to become a car insurance provider.

According to industry sources, if the profit of car sales declines, it is understandable to try to expand the business in the areas related to automobiles. Retiring 10,000 steps, dealers should first think of a merger and reorganization approach rather than a road when they encounter funding problems. .

Since the beginning of last year, the trend of distributor grouping has become obvious. Several major distributor groups are actively merging and reorganizing to acquire small and medium-sized distributors. Some small and medium-sized dealers who have not been able to fight in the market have also rushed to “big trees” in recent years in order to protect themselves.

In addition, for car dealers with limited financing channels and a single source of profits (new car sales still account for more than 80% of dealer revenue), achieving capital market financing is currently a good way to survive.

However, the capital market does not seem to be "cold" with auto dealers. The China Automobile Dealers Association analyzed the operating conditions of the top 100 enterprises in the circulation industry in 2010 and 2011. From the data, the average gross profit margin of the top 100 companies in China's automobile circulation industry fluctuates around 7% in the past two years, and the net interest rate is maintained. In the vicinity of 2.3%, there is a big gap between the reference value of 10.6% and 5.2% in the mature international market.