Dealers frequently go bankrupt, thousands of dealers have withdrawn from the network in five years, and 4S stores finally fell into their own "pig-killing plate"

Chinese netizens often come up with some brilliant jokes that get to the heart of the matter.

Because many car owners have experienced being cheated, entering a 4S store is like entering a "pig slaughtering scheme". Based on the Ah Q spirit of satisfying one's greed when one's wallet is empty, the term "four sons store" has spread like wildfire.

Gu Long said that a person's name may be wrong, but his nickname is usually correct. Since the name "Four Sons Store" became popular, it has actually laid the groundwork for the miserable situation of 4S stores today.

According to data from the China Automobile Dealers Association, more than 8,000 4S stores will withdraw from the Chinese auto market from 2020 to 2023, a staggering number. The 4S store model in the Chinese auto market reached its peak around 2016, and then continued to decline until now.

2024 is not over yet, but the situation is not much better. According to statistics from the China Association of Automobile Manufacturers, the inventory index of Chinese auto dealers in July 2024 was as high as 59.4%, far above the industry's boom-bust line. According to this situation, the withdrawal of 4S stores from the network will accelerate.

At the beginning of 2024, Guangdong's large dealer group Yongao declared bankruptcy. The company was founded in the 1990s and can be said to have witnessed the development of China's entire passenger car market. This time it declared bankruptcy and more than 80 stores withdrew from the network;

In July, Guanghui Auto, one of the largest passenger car dealers in China, was hit by a scandal of difficulty in picking up cars. The company sells as many as 66 car brands and has 695 4S stores across the country in 2023, but is now facing the dilemma of delisting;

Also in July, the largest auto dealer in Yancheng, Jiangsu, Senfeng Group, was suspected of bankruptcy. Consumers were unable to pick up their cars after purchasing them, and the boss was reported to be missing.

On August 8, nine Beijing Hyundai dealers in Hunan Province sent a letter announcing that due to huge inventory pressure and extremely difficult operations, they would stop picking up cars from Beijing Hyundai from that day on.

If nothing unexpected happens, the number of 4S stores that will be delisted in 2024 will remain at a high level of more than 2,000. In other words, in five years, 10,000 4S stores will be left behind in the Chinese auto market.

Why did the once prosperous 4S stores become so desolate in just a few years?

This is primarily because the competitive landscape of China's automobile market has changed significantly. Since 2020, the biggest variable in China's automobile market has been the rise of new energy vehicles.

This factor brought two direct impacts.

1. The sales of fuel vehicles, especially joint venture fuel vehicles, have dropped sharply, and large dealers such as Guanghui Group mainly sell joint venture fuel vehicles.

2. New energy manufacturers are in a dominant position, but they tend to adopt the direct sales model. Currently, the new energy brands that are performing well, such as Tesla, Ideal, Wenjie, Weilai, etc., are mainly based on the direct sales model, and the traditional 4S store model is gradually being abandoned.

The traditional 4S store model is facing a double dilemma, with the existing stock being eroded and the incremental sales not being available. More importantly, these 4S stores are too closely tied to traditional automakers, which makes it difficult for traditional automakers to transform, and naturally it is also difficult for traditional 4S stores to transform.

Take Xinjiang Guanghui Automobile as an example. The company has nearly 700 stores across the country. In recent years, it has worked hard to increase the sales of new energy vehicles, but by the end of 2023, the number of new energy vehicle stores will still only account for about 3.5% of the total business outlets.

The traditional 4S store model is no longer popular. In addition to changes in the industry structure, there is another important factor, that is, its greed and disorderly eating at both ends of the sugar cane has made consumers and manufacturers unbearable.

In May 1996, Dongfeng Citroen established China's first 4S store in Wuhan. This model was first introduced from the European market. The four Ss refer to vehicle sales, spare parts, after-sales service and information feedback.

In the original conception, 4S stores are a connection point between upstream automobile manufacturers and downstream end consumers, providing one-stop service for car buyers. All aspects of car purchase can be completed in 4S stores.

However, in the actual implementation process, these four Ss all have a lot of problems, which are very different from the original ideas, and in many cases even go against them.

In terms of sales, the biggest problem facing 4S stores is price opacity.

Generally speaking, the price that 4S stores pay from manufacturers is 10% lower than the official guide price. This 10% is the main source of gross profit for 4S stores. However, due to the different operating conditions of each 4S store, there are often large differences in the retail prices of the same car in the same city, which brings troubles to car buyers.

At the same time, most 4S stores are keen on the "quasi-financial" model. On the one hand, they borrow money from banks and pick up cars from manufacturers. On the other hand, they induce a large number of users to buy cars with loans, earning income from financial service fees, bank interest rebates, insurance company rebates, etc., thereby increasing users' car purchase and use costs in vain.

In terms of after-sales service and parts, 4S stores in various places have frequently been hit by problems of selling inferior products as good ones and replacing products instead of repairing them. At the same time, they have also formulated some after-sales maintenance "packages" that are full of textual traps, and often engage in wrangling afterwards, dragging many first-time car buyers into the water.

At the same time, many 4S stores also use the customer information they have to frequently harass users, and even illegally and irregularly sell personal information to make profits.

In the seller's market where the auto market maintains rapid growth, 4S stores have various advantages. Users are very dissatisfied with their various "blood-sucking" behaviors, but there is no good way, so they can only swallow the bitter pill alone with a bitter smile. In the new energy era, new energy manufacturers have chosen the direct sales model to improve service quality.

Although the direct sales model will bring great financial pressure to manufacturers, the current automobile market is a "buyer's market" and consumers have the initiative in car purchases.

For 4S stores, all these changes are tantamount to "reversing the destiny of the world". The days when they could just lie down and insult and rip off customers are gone forever.

With the decline of the 4S store model, users are no longer subject to exploitation by middlemen, and their car purchase costs are decreasing. It also makes it easier for manufacturers and users to have direct contact, killing two birds with one stone.

As a product of the old concept in the field of automobile retail distribution, today's 4S stores have long been "deformed" to the point of being unable to keep up with the pace of the times. In addition, manufacturers have reached a consensus on "focusing on value rather than price", and the so-called "value" includes the value of sales, service, and after-sales.

In the era of fuel vehicles, it was common for 4S stores to cheat people, but these shortcomings were regarded as industry practices and have been passed down all the way, and today they have become difficult to reverse.

In the new energy era, the original marketing concepts and marketing systems have been impacted. Manufacturers have begun to realize that sales and after-sales environment are also core competitiveness. The previous "pig killing" style scams are an irreparable damage to their own brand image.

Today's results are yesterday's causes. When the times abandon you, they will never say hello. This is especially true for 4S stores. After all, they "made" all of this themselves. If users could trust that system, they would not rush to the direct-operated stores without looking back.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.