With closed 4S stores and consumers being left with pitfalls, and the industry undergoing transformation, how can we avoid pitfalls when buying a car?

Recently, news of dealers withdrawing from the network has spread across the country, causing panic. Judging from media reports from various places, some of these dealers are luxury brands that we are familiar with.

A few days ago, media reported that Yonghao Audi, the largest Audi brand 4S store in Tianjin, closed down due to a broken capital chain. The same was true for the other two brand 4S stores operated by Yonghao Group.

BMW's situation is not much better. Earlier, BMW's first 5S store in the world, located in Beijing, announced its closure. Auto 4S stores in many places including Xiamen, Chongqing, Harbin and other places also "ran away".

We can easily search for more information on the Internet. For example, Guanghui Group, which was once ranked second in the country, was delisted; Zhejiang Zhongtong Holding Group, the largest automobile dealer group in Taizhou, Zhejiang, suddenly closed due to funding problems; Chongqing Longhua Industrial Group, a long-established 4S group with a history of nearly 30 years, had its stores closed or transferred, and so on.

Data from the China Automobile Dealers Association shows that from 2020 to 2023, more than 8,000 auto 4S stores across the country closed down, and this number is still increasing in 2024.

It can be seen that with the increasing penetration rate of new energy vehicles, the pace of industry transformation has become faster and faster. Once car companies cannot keep up with the pace, related dealers will naturally become the "cannon fodder" of this era.

Data shows that in the first half of this year, the loss rate of domestic auto dealers was as high as 50.8%, and only 35.4% of auto dealers were able to make profits. The number of loss-making dealers has increased significantly compared with the previous year.

The reasons for this can be found in the "National Automobile Dealer Survival Status Survey Report in the First Half of 2024" released by the China Automobile Dealers Association.

The report shows that a large number of auto dealers are facing serious inverted prices of new cars, chaotic market prices, lack of continuity in manufacturers' policies, bundling and inventory pressure, which have led to a significant increase in their operating pressure.

Lang Xuehong, deputy secretary-general of the China Automobile Dealers Association, said that the 4S store authorization model is facing a wave of withdrawal this year. It is estimated that the number of 4S stores withdrawing from the network will reach 4,000 throughout the year, and the second half of the year will exceed the first half (about 1,500). In the past three years, the number of withdrawals from the network was about 2,000 each year.

Although the "cold winter" brought about by the industry transformation has a significant impact on automakers, dealers are also having a hard time. Automakers are engaging in price wars, and auto 4S stores are losing more and more money. It seems that they have no choice but to run away.

Even more miserable than the 4S stores are the car consumers. At least, on the surface, car consumers still bear "everything". In fact, strictly speaking, in this "cold winter", car consumers are always the "vulnerable group".

Whether a car company has a problem with its capital chain or when a 4S store will run away is often a long process, and consumers can only understand the situation when the dealer has already exposed the problem. At this time, consumers are actually very passive, and after-sales and rights protection are very difficult.

Of course, as a car consumer, sometimes choice is more important than remedy. At least, at present, if you don’t keep your eyes open when buying a car in the first place, there is no solution to “remedy the situation” when the dealer “runs away”.

Although ordinary consumers are not so "powerful" and cannot predict the situation in advance, there are still ways to avoid accidents as much as possible.

First of all, you should choose fewer brands on the fringe, such as some Korean and French brands. They are basically on the fringe of the Chinese market. Even if their products are good, their sales are shrinking, and the possibility of them running away at any time may be greater.

Secondly, many traditional car brands are also prone to "exposure", so such brands should be chosen with caution. After all, now is the era of new energy, and some traditional car brands are slow in transformation, and their core new energy technologies cannot keep up, so it is difficult to make a breakthrough in sales. This can easily lead to capital chain problems, sudden collapse of the dealer network, and large-scale withdrawal of 4S stores, resulting in after-sales rights and interests not being guaranteed. You know, this is not groundless worry. Some time ago, Tianjin Yonghao Group issued a statement that because the bank suddenly withdrew its loans, the capital chain was broken, and the 4S stores of its three brands Audi, Hongqi, and Honda closed down on a large scale. This incident has caused a large number of car owners to have difficulty in defending their rights. Many people lost their maintenance packages and stored value in these 4S stores before they could use them.

It should be noted that this does not mean that new energy vehicle companies are safe enough. Even if they are new energy vehicle companies, try not to choose small brands that you rarely hear of.

New energy vehicle companies are also undergoing a major reshuffle. Now, except for NIO, Ideal, Xpeng, Xiaomi, and Leapmotor, many others have gone silent. Once they run away, it may be more difficult to protect their rights than those traditional car companies with some influence. Even the active new forces are not 100% reliable. For example, Nezha was also very popular at the beginning. Now, Nezha Automobile's Tongxiang factory has been shut down for nearly a month, and some stores in Shanghai have also been closed.

It can be seen that it is basically impossible to avoid pitfalls 100% in the current automobile market, but for automobile consumers, giving up those brands that rely on traditional fuel vehicles, have slow transition to new energy, and lack core technology as much as possible will reduce the probability of pitfalls. And if you can pay more attention to the sales model of automobile companies, the probability of pitfalls will be further reduced.

At present, brands such as Xiaopeng, Avita, BYD's Denza and Fangchengbao all use the dual-track model of "direct sales + dealers". With the support of the OEMs, dealers use new energy vehicles as the starting point to carry out order-based manufacturing and sales of vehicles.

After the closure of 4S stores, car owners will face inconveniences in repairs and maintenance, as well as problems such as vehicle system crashes and insurance renewals. The advantage of the dual-track system is that even if problems arise with dealers, car companies can still provide a "cover" for consumers.

The withdrawal of many dealers from the network may seem like a "cold wave" in the industry, but in fact it is the inevitable path of industry transformation and a process of survival of the fittest. However, in this "big movement" of transformation, consumers should not become "victims". Perhaps, only when everyone pays attention to avoiding pitfalls when choosing a car and automobile companies gradually improve their automobile sales model, can the entire market be truly harmonious and consumers can no longer step on pitfalls.