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Affected by the COVID-19 epidemic in 2020, the automobile industry as a whole showed a state of exhaustion. According to the China Automobile Association, passenger car sales in 2020 were 20.178 million, down 6 per cent from the same period last year. By contrast, the luxury market stands out, growing one after another since the second half of the year. Thanks to this, Yongda, one of the main luxury brands, made a big profit last year.

Nissan, one of the top ten car dealers in China, China Yongda Automobile Services Holdings Co., Ltd. (hereinafter referred to as Yongda Automobile) announced its annual results for 2020. The results show that the group's total revenue in 2020 was about 69.633 billion yuan, an increase of 9.1%; the comprehensive gross profit was about 7.464 billion yuan, an increase of 7.3%; and the net profit was about 1.733 billion yuan, an increase of 10.5% over the same period last year.

Yongda believes that it achieved a significant increase in net profit last year, thanks to strong demand growth for luxury cars, continued growth in after-sales business and continued improvement in operational efficiency.

According to public data, the domestic luxury car retail market sold 3.236 million vehicles in 2020, an increase of 6.5% over the same period last year, significantly outperforming the passenger car market and helping to increase Yongda car sales.

In terms of car sales, Yongda Motor sold a total of 204596 new cars in 2020, an increase of 3.7% over the same period last year. In the second half of the year, taking advantage of the rebound in the overall auto market, new car sales reached 122622, an increase of 19.5% over the same period last year. New car sales revenue increased by 21.8% to 34.648 billion yuan, and by 10.0% to 58.229 billion yuan for the whole year.

Yongda, which mainly operates luxury brand dealers, was significantly more dependent on luxury brands last year, with its BMW and Porsche becoming the group's two most profitable luxury brands. Among them, the BMW brand accounted for 43% of the group's new car sales revenue last year, up 18.4% from the same period last year, while Porsche brand car sales accounted for 15% of the new car sales revenue, up 29.9% from the same period last year.

In terms of after-sales, Yongda Motor's after-sales service revenue, including maintenance services and car extension products and services, was 9.576 billion yuan, an increase of 7.6 percent over the same period last year.

In terms of extended services, Yongda Group's financial and insurance agency service income in 2020 is 1.108 billion yuan, which is basically the same as the same period last year. The group's sales of used cars increased by 26.6% to 52280 units compared with the same period last year, and the gross profit of used cars was 175 million yuan, an increase of 27.3% over the same period last year.

As the luxury market continues to improve, Yongda has acquired more dealerships through self-construction and acquisitions. As of December 31, 2020, the Group has opened a total of 238 outlets in 4 municipalities directly under the Central Government and 19 provinces in China, including 213 authorized by the factory and 25 non-authorized by the factory.

Among them, there are 13 self-built luxury and ultra-luxury passenger car sales and service outlets, including 1 Porsche 4S store, 4 BMW 4S stores, 1 Lexus 4S store, 1 Aston Martin 4S store, 2 Weimar 4S stores, 1 Xiaopeng 4S store, 1 Volvo showroom, 1 Infiniti 4S store and 1 Tesla sheet spray center. In addition, through the acquisition and merger strategy, the acquisition of minority stakes in seven BMW 4S stores and two Porsche 4S stores was successfully completed during the year, further enhancing the market share and profit contribution of BMW and Porsche brands.

With the development of the new energy vehicle market, the group will also deepen the layout of the new energy vehicle industry and actively carry out the sales and service business of new energy models of major agency brands. The group's new energy brand has risen to 5.0 per cent this year from 4.6 per cent last year, and sales of new energy vehicles are expected to reach 10271 this year, up 13.8 per cent from a year earlier.

Since the decline in domestic new car sales and the rapid changes in the industry environment, the problems of poorly managed dealer groups have highlighted, further aggravating the structural differentiation. With the change of the environment of the car market, the luxury market is growing against the market, and accelerating the expansion of luxury brands has become a major growth point for the profits of many dealer groups.

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