The further expansion of China's auto consumption market has driven the interests of all parties concerned into a new stage of wrestling. The listing of large auto dealer groups is a sign of this change.

At present, the major capital markets that have entered the capital market are Dalian Zhongsheng (881.HK), Zhejiang Property Yuantong (600704.SH), and Zhongjin Automobile & Trading (in leveraging Dingsheng Tiangong 600335.SH). Other large car dealership groups such as Huge Group, Shanghai Yongda Group and Guanghui Automobile are all in the preparation stage.

According to the sales statistics, these large-scale auto dealer groups are among the top 50 companies in China's automobile circulation field, and they have strong influence in sales and profitability. As a result, they have listed or plan to make a significant change in the overall automotive sales market. With the extension of the list of dealers planning to list, they will change the entire automotive sales market will be greater and greater.

Dealer Group’s listing has solved fatal financial problems for its development and has become a healthy company in the market. However, the Chinese automobile sales market is a region dominated by vehicle manufacturers. Many dealers will make changes in the relationship between vehicle manufacturers and distributors. This will be a new crisis in the entire market. The market is now in a period of conflict.

In the field of automobile sales, the government has successively promulgated the “Implementation Measures for Monopoly Management of Automobile Brands” and “Opinions on Promoting Automobile Consumption” in the formulation of policies. The introduction of the former makes the vehicle manufacturer an absolute dominant force. The introduction of the latter, to a certain extent, supports the growth of dealerships, but it does not fundamentally solve the problems caused by the former. It can be said that at the policy level, vehicle manufacturers and distributors are not the main players in a fair position.

The consequences of these policies have various manifestations at the market level. At the end of August 2010, BYD Auto Dealer’s withdrawal from the network was a direct result of this policy. Because of the fierce contradiction and conflict of this incident, the scope of its impact is also relatively large. Actually, it is not only BYD. So far, almost all brands have had similar incidents. If this policy does not change, similar incidents will continue to occur. Due to the considerable influence of vehicle manufacturers on China's economy, this policy is unlikely to change in a short time.

This situation allows dealers to start changing the passive situation from other aspects. Listing can be seen as the most important means now. It enables distributors to form a relatively equal dialogue body with vehicle manufacturers after the scale has been extended to a certain extent. From the actual operation, this is not an easy task.

In the process of expansion of the dealership group, dealers with backgrounds in state-owned assets have hardly encountered too many difficulties. On the contrary, distributor groups in the background of private capital have to overcome difficulties. Some vehicle manufacturers believe that the listing of large-scale private capital background dealers will threaten the interests of vehicle manufacturers, especially the vehicle manufacturers' control over sales channels. Therefore, from the bottom of the heart, vehicle manufacturers will oppose the expansion of the market.

The key to this is the control of dealership rights. Distributor groups are subject to various resistance from vehicle manufacturers when acquiring individual brand dealers. For a large dealer group to acquire an individual dealer, the entire vehicle manufacturer will basically not approve it unless the dealer group can integrate enough social resources.

Recently, there has been a constant conflict between some vehicle manufacturers and large distributor groups. These incidents have not been exposed for various reasons. However, as more and more distributor groups are listed, such conflicts will increase. The concentration of outbreaks occurs when the number of cases listed in the dealer reaches a certain amount.

The second crisis brought about by the listing of dealers is the game of power between the listed company and the vehicle manufacturer. This involves the entire vehicle manufacturer's business policy for distributors, such as the wholesale price of the vehicle and the win-win situation of spare parts. At this stage, the distributor group really became a “threat” for the vehicle manufacturer. Their conflicts are far more extensive than those of BYD.

To solve these problems, Chinese autos need to adjust their policies. Fair business policies and the environment may create fair deals. It is not as good as adhering to the original policy to reform ahead of schedule. China's auto market is already the world's largest auto market, and it is precisely this market that has no basic business rules. If this is also part of Chinese characteristics, it can only show that China's autos use features to cover their ignorance and backwardness.

In 2010, sales of Chinese cars will continue to be the focus of global attention. Hopefully, the glory brought by market capacity will enable Chinese cars to move in a healthier direction, instead of taking care of the characteristics in the world's largest halo.

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