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At the CNHTC 2010 Family Love Service Conference held in mid-August, the “Commercial Automotive News†reporter learned of this information: As of the end of June 2010, CNHTC dealerships added 230, of which 16 new 4S. Stores, 29 brand new franchise stores.
The newly added agents are phenomena that the existing agents are unwilling to see. New entrants will undoubtedly grab customers and grab markets with existing dealers. However, recently the "Commercial Automotive News" reporter heard a different point of view. In this issue, Lemon Tea House invited two distributors with different opinions and asked them to talk about their opinions.
Lemon Tea Guest: (Respect the opinions of dealers, the following are all pseudonyms)
Zhang Xuehai: A heavy truck dealer in Shandong
Li Yi: Hebei Truck Dealer
Moderator: Not long ago, I met an A-brand heavy truck dealer in Shanxi Province. He was the first and only local distributor of this brand, and he used to be a brand B. Speaking about why he changed the door, he said that the B brand had another agent in the local area.
In previous interviews, many old dealers complained that the market they had worked so hard to do was “picked peaches†by latecomers. They sadly turned to other brands. Some dealers who entered the market in the same period as others bluntly stated that if there are two or more distributors in the region, they would not try their best to develop the market for a brand, but instead chose to represent more than one brand at the same time. Does this mean that in order to maintain the enthusiasm and loyalty of distributors, only one agency can be established in a region?
Zhang Xuehai: The brands I represent are still weak in the local market. The market share is only 4% at the lowest, and 11% to 12% at the high. Manufacturers propose that the local market share within 3 years should be increased to 20%, so this year is also widely spread dealer network.
Regarding multi-brand or single-agent issues, I believe that competition will always exist, and competition itself is not a bad thing and can promote the ability of dealers. If there is competition, it shows that this dealer has not yet had enough strength. In addition, the market cannot be achieved by a single distributor. Especially in Shandong, FAW-Qingdao Plant, CNHTC, Shaanxi Auto, and Futian Auman have their own advantages. The competition of each brand in Shandong is fierce. Several dealers of the same brand Working together, it can increase the market share of the brand.
I think that dealers have an excellent sales force and excellent maintenance capabilities to have an invincible foundation. For example, before 2004, a brand had only one dealer in Shijiazhuang and sold 150 to 200 vehicles a year. At the end of 2003, manufacturers encouraged new distributors. Shijiazhuang increased the number of brand dealers to 5-6. It seems that the competition is fierce. However, in 2004, the sales volume was the lowest. The company also sold 500 vehicles. Think dialectically. Of course, this surge in sales is also related to the specific market environment. If there are 5 to 6 dealers in other places, no one knows what will happen. Hebei itself is a major transportation province, and trucks were in great demand that year. Before 2003, the brand's original dealership was a state-owned enterprise, and it had little enthusiasm to open up the market and was still eating "big pot rice." The newly-entered dealers are "quiet to be fed," and their enthusiasm is very high. Their grasp of the market is also in place and they have played a large role.
Li Yi: I think that there are too many distributors of the same brand in one place is not a good thing after all. The Shijiazhuang example does not mean that the increase in sales is mainly due to the increase in the number of dealers. The fundamental reason is that there is market demand, followed by the marketability of products. What needs to be seen is that in the years after 2004, the five or six distributors also withdrew. When dealers are not doing their best, it is the manufacturer's brand. Because the manufacturers are responsible for the product. Dealers do not represent the brand or do not try their best to develop the market, big deal does not earn the brand's money, you can also do other brands to support. The more serious problem is that when the brand is paralyzed, the negative impact will be reversed within a short period of time. What is lost is the market development space for several years.
Simply by setting up dealers to meet market demand, it will mess up the market, and it's equal to picking up a stone and hitting your own feet.
Moderator: Although the opinions of the two are different, they also have one thing in common, that is, they all stress that this issue should be analyzed according to the needs of the local market. So, is there a way to measure the number of dealers that are suitable for a particular situation? In addition, the dealers are most worried about the price war caused by multiple agents. How do two people view this issue?
Zhang Xuehai: The number of distributors varies according to regions and markets. I think that 2 or 3 distributors are better than 1 distributor. It is not enough to have only one dealer in a prefecture-level city with a large demand, unless the dealer is very strong and has built several stores. Many dealers believe that there can be no distributors in a single area, and they are afraid of pushing prices down each other. Consumers can benefit from lower prices. Many dealers who worry about price wars are thinking about seeking protection instead of thinking about how to compete better.
The price of an exclusive agent is definitely higher than the agency price of many dealers, but sales cannot be sacrificed to protect the price. Everyone is going to open up the market, and they can jointly enjoy the advertising effect created by each other, and together they will stimulate the atmosphere. Users will follow suit to purchase. Maybe dealers' profits will be reduced in a short period of time, but they will still benefit in the long run. Sales go up, parts and maintenance can make money. Accessories, maintenance and follow-up, to meet the needs of users, users will continue to purchase, which formed a virtuous circle.
Li Yi: There are too many dealers, no one makes money, and if the capital is not accumulated, it will not be able to achieve healthy development. Can not be ignored is that manufacturers set up too many dealers are actually quick success. For the manufacturer's regional manager, the development of a dealer is his performance, the regional manager can get the factory's financial support, and the district's business office can also get more inventory.
This is not to say that there can only be one dealer in one place, but it depends on the market capacity. It depends on how much local demand there is, as well as the local market share of a brand and the strength of dealers. Taking Shijiazhuang as an example, the annual capacity of the heavy truck market is about 10,000 vehicles. If the market share of a certain brand is 20%, that is to say, it can sell 2,000 vehicles, and the economic strength of a certain dealer is limited, so it is impossible to enter so many cars at once. If you can't achieve your goal, you can develop new dealers. But many times this is not the case. Some people see others selling well and they also want to sell. As a result, not only do they make no money, others do not make money, and the market is disrupted. After that, everyone has no enthusiasm. Now.
Some manufacturers always take the sales standard of one place to require distributors in another place to reach the same level, but the markets in different regions are not comparable, and the distributors cannot adopt oppressive management. Some manufacturers have opened a new product to open one or even several dealers, dealer stocks rose indefinitely. When the market is good, it can be supported. The market is bad and the dealers die immediately. In particular, heavy trucks have their own models for a period of time. After this period, this model may be completely rotted, causing the funds to be turned around. Many dealers have suffered from this.
Moderator: Both of them are justified. It seems that if you look at the problem from a different perspective, you will get different results.
Zhang Xuehai: Yes, from the manufacturer's point of view, multi-agents help increase sales, while dealers consider multi-agents will lead to fierce competition. There are several places in Shandong where there is only one dealer for a certain brand. They threaten the manufacturers. If they build a store, they will quit. As a result, because there is no competition, these dealers are not very motivated and did not finish the market well. In order to avoid such a situation, manufacturers naturally have to set up more agents.
The dealer has the ability to be able to take the quantity, and the manufacturer will protect him. If the dealer does not do well, but also want to guard this stall, manufacturers will firmly develop new dealers. After all, this is where the market is playing a regulatory role.
Li Yi: Manufacturers provide good policies to support distributors, and dealers' loyalty will increase. If dealers do not have enough loyalty, relying on temporary policies to incentivize distributors, dealers’ sales passion will be difficult to last.
Moderator: After listening to the two introductions, we have a better understanding of the positive and negative aspects of the issue of setting up more agents.
The views of the two parties seem to be contradictory. In fact, they are all the same. The market capacity determines the number of dealers. For manufacturers, it is not just to consider how many dealers are set up, but how to increase the enthusiasm of dealers to open up markets. With strong, willing dealers, even if the manufacturers will be a regional market assigned to a dealer to develop, will achieve good results; if each dealer does not work hard, more dealers are in vain.
December 30, 2023