Aug 23, 2024 03:26 AM
CHINA
Price War and Weak Demand Leave Half of China’s Car Dealers in the Red
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A car dealership in China
China’s motor industry has suffered a tough first half of 2024 with many dealers losing money as manufacturers made substantial price cuts for new cars and demand from motorists weakened, a survey by the China Automobile Dealers Association revealed.
The report, based on responses from 1,164 dealers in July, showed a sharp decline in dealer satisfaction, with an overall score of 69.7, the lowest since 2013.
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- China's motor industry experienced a difficult first half of 2024 with many dealers operating at a loss due to price cuts and weakened demand.
- Dealer satisfaction reached its lowest level since 2013, with a sharp decline reflected in a score of 69.7.
- Despite a 3.3% year-on-year increase in domestic passenger car sales, dealers shifted profit sources to after-sales services, finance, and insurance, facing a gross loss of 26.5% from new car sales.
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Who’s Who
- BMW
- BMW dealers have started raising prices, likely influencing Audi and Mercedes-Benz to consider similar moves. A senior auto sales expert suggested that BMW, along with Audi and Mercedes-Benz, should lower their annual sales targets to better balance market supply and demand, addressing the issue of an excessive number of imported luxury cars in China.
- Audi
- Audi dealers in China have been impacted by the overall downturn in the motor industry, yet Audi is considering raising prices following BMW’s lead. This comes as part of broader efforts by luxury brands to balance market supply and demand amidst excessive imported luxury cars. A senior auto sales expert recommended that Audi, along with BMW and Mercedes-Benz, lower their annual sales targets to adjust to market conditions.
- Mercedes-Benz
- Mercedes-Benz is considering raising prices following similar actions by BMW in response to an ongoing price war in China's auto market. Industry insiders suggest that Mercedes-Benz, along with BMW and Audi, should lower their annual sales targets to balance market supply and demand.
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What Happened When
- First half of 2024：
- China's motor industry suffered due to substantial price cuts and weakened demand.
- Second quarter of 2024：
- A downturn in the motor industry was particularly noted.
- July 2024：
- China Automobile Dealers Association conducted a survey revealing a decline in dealer satisfaction.
AI generated, for reference only
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