The automobile industry is undergoing major changes. In the next five years, will dealers have a way out by doing this?

[Autohome Industry] Automobile is a rapidly evolving industry, which not only involves the production system, but also covers the dealer system. Where are the opportunities in the next five years? It's a question everyone is thinking about. In 2019, the sales decline in the entire automobile market accelerated, but some companies achieved development against the trend, and BAIC Penglong is one of them. In the list of China's top 100 dealers, BAIC Penglong rose from 15th to 11th place. Standing in 2020, BAIC Penglong is thinking about its development direction in the next five years. BAIC Penglong is a key link in the ecological chain of BAIC Group. Focusing on the development trend of the automobile circulation chain, we conducted an in-depth interview with Du Ruitao, deputy general manager of BAIC Penglong. Du Ruitao is a veteran of the automobile industry and has been engaged in channel operation and management for more than 20 years. From 2013 to 2018, Du Ruitao worked at Beijing Mercedes-Benz Sales and Service Co., Ltd. and participated in the channel construction of Mercedes-Benz in the Chinese market. In 2018, he officially joined BAIC Penglong and was responsible for the entire automobile circulation sector, including 4S store operations, auctions, loan guarantees, import and export and other businesses. To answer the question of how the car dealership system evolves, he provided us with a global perspective.

Leap-forward development: achieving multiple growth. As one of Mercedes-Benz’s three strategic partners in the Chinese market, during the “13th Five-Year Plan” period, the number of BAIC Penglong 4S stores increased by 1.5 times, as of December 2019. , it has 43 Mercedes-Benz dealers in operation, 5 Beijing Hyundai dealers, and 5 BAIC brand dealers, covering 21 provinces and 36 cities across the country. In the past few years, BAIC Penglong has maintained an upward growth momentum. This year, the epidemic has increased the pressure on the auto market, and various auto brands are actively filling the gap in the second half of the year. For BAIC Penglong, maintaining sales volume and market share is also a key task, but in addition, there are more important goals. Du Ruitao believes that pressure accelerates the reshuffle of the automobile industry and also creates opportunities. BAIC Penglong will take this opportunity to set the development tone for the next five years. He judged that the entire automobile industry value chain is being reshaped, and after-market businesses such as services and trade will gradually surpass vehicle manufacturing. In the future, BAIC Penglong will achieve leapfrog development during the "14th Five-Year Plan" by expanding the industrial chain of the automotive service trade market.

How to understand leapfrog development of "Mercedes-Benz GLC"? Du Ruitao explained that from the perspective of quantitative indicators, between 2021 and 2025, the number of 4S store outlets will increase five times, marketing revenue will reach nearly 60 billion yuan from the current just over 20 billion yuan, and the number of high-net-worth customers will increase from 200,000 to 200,000 yuan. 1 million. To understand it simply, this exponential growth is leapfrog development. But behind quantitative indicators, there is often an enterprise’s thinking about business logic and determination to change its business. Du Ruitao believes that opportunities for car dealers lie in changes in the automotive industry environment. He said with a smile, "This is an era when good people make money." What is scarce is not capital but good projects. If you are competitive enough, you can get strong support. From another perspective, the dividends of the automobile industry will gradually emerge. China’s automobile market has a private car ownership of 200 million and a new car sales market of nearly 30 million vehicles per year. At this scale, if it can become the automobile circulation and future For leading companies in the market, achieving leapfrog development is by no means empty talk.

Market-oriented reform: absorbing high-quality resources To achieve leapfrog development, dealers must make adjustments to adapt to industrial changes. On the one hand, it is necessary to select the brands to be operated and control them within a reasonable range; on the other hand, it is necessary to create a trump card and gather capabilities in capital operation, store operation, business expansion, service innovation and other aspects. From the perspective of BAIC Penglong, Du Ruitao said that it must rely on market-oriented reforms and rely on BAIC Group to absorb high-quality external assets while evolving its own business. In the future, BAIC Penglong will expand its business through asset portfolios. He believes that it is more reasonable to operate 5-8 car brands. We do not exclude the absorption of other brands and will control a certain proportion. The brands absorbed from the outside will be mainly luxury cars, supplemented by high-quality mid-range brands, and create a deep layout through combination.

Acquisition is not about taking it all, but about being selective. He mentioned two key words: "seizing food from the tiger's mouth" and "giving help in times of need." "Seizing food from the tiger's mouth" means the emergence of good assets, actively participating in the competition, and competing for M&A professionalism, resource capabilities and decision-making efficiency; "giving help in times of need" means that other companies encounter difficulties in their operations and improve their operations through cooperation with them, and the test is It is business ability. If BAIC Penglong possesses these advantages, it will have a trump card and be in an advantageous position in future competition. How to create a killer weapon? Du Ruitao believes that for dealers, there are two key customers: one is the car company, which wants them to hand over the brand to the dealer with confidence; the other is the consumer, who wants to worry less when buying and using the car. . While doing these two things well, we must also ensure the interests of shareholders. "By clearly studying the needs of shareholders, consumers and car companies, we can create a killer weapon." The future business competition is no longer a business competition between enterprises, but a competition between different platforms, or even a business competition between different ecosystems, and a single enterprise does not have such competitiveness. Du Ruitao believes that future business competition relies on a systematic operation, and BAIC Penglong will build such a system now.

Systematic competition: digital car-people ecology BAIC Penglong hopes to become a leader in creating a "car-people ecology service system". Du Ruitao explained that there are four key words in this: warm, high-quality, reliable digitalization, while also creating social value for shareholders, employees, and consumers. This is the system that BAIC Penglong will build in the next five years. BAIC Penglong is preparing for the next stage. Focusing on this year's goals, "make preparations for market-oriented reform at all costs in the last four or five months." Du Ruitao said that this year we must find the vanguard in the system, carry out rapid measures to try changes, and authorize , empower, invite outside brains, stimulate business vitality, and achieve goals with high quality. He said that the logic of piloting market-oriented reforms is to select the right groups, invest resources, and gain enough influence to drive subsequent reforms. Looking at the specific implementation measures, after identifying the pilot groups, it is necessary to benchmark the leading companies to find the parts that can be improved, and then select various tools to improve operations. Among them, digitalization is undoubtedly one of the most important tools for improving operations, and this has become industry knowledge. Du Ruitao introduced that BAIC Penglong should clarify its own business pain points based on the judgment of business scenarios, obtain relatively mature tools in the market, be result-oriented and work with strategic partners to achieve digital transformation while taking advantage of its own business scenarios. , and also help partners become leaders in the IT field. He judged that in a certain period of time in the future, 4S stores will still be the main body in the automobile circulation field. The future sales system may not be called a 4S store, but what will it look like specifically? No one can accurately predict it yet, but it is definitely a reorganization of elements in 4S stores, "reorganizing around the needs of consumers and manufacturers." The foreseeable trend is that car companies will pay less to dealers, and consumers will pay lower prices, but other payment models will be derived. What dealers need to think about is how to improve their operating model and find their own position under such drastic changes. In the future, business models will evolve around user consumption scenarios, Internet of Vehicles technology, etc., accompanied by profound changes in service models, service tools, and service methods. Car dealers must stay ahead of the changes and adapt to consumer demands if they are to survive.

Full text summary: We can already feel the power of change in the automobile industry, but we cannot yet fully see what it looks like. Through the interview with BAIC Penglong, we can see the direction of change and the outline of the future of car dealers. However, whether the company can successfully transform, create its own trump card, and always remain irreplaceable will undoubtedly need to be built brick by brick. , which requires the operator’s vision, courage, determination and endurance. (Text/Car Home? Xiao Ying)