AutoBeta(AutoBeta.net)05/05 Report--

China's auto market has shifted from blowout development to declining competition. Passenger car sales fell 5.8 per cent in 2018 and further expanded to 10.5 per cent in the first quarter of this year. Traditional car companies are facing a reshuffle and car dealers are doomed.

Since last year, dealers' rights protection incidents have been staged continuously, mostly focused on independent brands and joint venture brands that are not in the mainstream. Dealers generally reflect the problems such as high inventory pressure, persistent operating losses, and inaction of manufacturers, and demand compensation from manufacturers. For example, Guangzhou Auto Fick Jeep dealers collective rights protection, BAIC Magic Speed, Guanzhi, Baowo car dealers rights protection events and so on. As the car market continues to decline, perhaps similar rights incidents will continue to occur. Recently, Lifan Motor also broke out the collective rights protection incident of dealers.

On the morning of May 5, the media exposed that representatives from more than 30 authorized dealers of Chongqing Lifan Automobile gathered together to safeguard their rights at the headquarters of Chongqing Lifan Center and put up the slogan "Lifan pay back". The rights representative sat quietly in front of the Lifan headquarters and did not go too far.

In the rights protection letter from the authorized dealer of Lifan to the manufacturer, the dealer expressed his dissatisfaction at 11:00, including that from March 2019, the company had no cars to send and did not give a refund; the batch price to the unauthorized dealer was much lower than the supply price to the authorized dealer, causing market chaos; the product quality was low, the repair rate of Maiwei and Xuanlang model engines, gearboxes and circuits was unusually high, and the acceptance of the store was delayed and the compensation for shop construction was delayed with various excuses.

Qiangfan authorized dealers said that in recent years, Lifan Motor has launched few new products, poor R & D capabilities, and failed to keep up with the pace of the market, resulting in losses for many dealers, with the most serious losing 2 million per year. The 55% discount selling of unauthorized dealers directly overwhelmed them.

The rights protection representative of Lifan dealers mainly expressed six points of the latest demands to the manufacturers:

1 hope that the original price of Lifan car will recycle the stock of cars and accessories

2 return the rebate portion of the DMS account to the dealer

3 implement the policy of advertising and publicity of Lifan car dealers in the early stage.

(4) return the deposit of the distributor for entering the network and building a store.

5 compensation for abnormal operating losses of dealers

(6) properly deal with the after-sales problems of dealers who want to withdraw from the network.

A representative of the dealer said that the protection of rights is due to helplessness, to recover losses, has not reached any consensus with Lifan.

In fact, Lifan is not as competitive in the market as before in the field of traditional fuel vehicles, transforming to new energy vehicles. Data show that Lifan sold 92000 fuel passenger cars in 2018, down 26 per cent from the same period last year, while new energy vehicles sold 10, 000 units, up 31 per cent from the same period last year.

From January to March this year, Lifan sold 15000 fuel passenger cars, down 50 per cent from the same period last year, while sales of new energy vehicles reached 685, up 62 per cent from the same period last year.

In the performance report released by Lifan, Lifan made a net profit of 253 million yuan in 2018, but suffered a loss of nearly 100m yuan in the first quarter of this year. In 2018, Lifan sold two assets: its subsidiary, Chongqing Lifan Automobile Co., Ltd., transferred to che Hejia at a price of 650 million yuan; in addition, Lifan also sold the production base of the original 150000 passenger car project to Chongqing Liangjiang New area Land Reserve renovation Center for about 3.315 billion yuan, thus obtaining corresponding funds.

Dealers' rights protection incidents continue to break out, reflecting the intensified competition in the domestic automobile market and the situation in which non-mainstream brands encounter great challenges. With regard to the protection of the rights of Lifan dealers, we will continue to pay attention.

Welcome to subscribe to the WeChat public account "Automotive Industry Focus" to get the first-hand insider information on the automotive industry and talk about things in the automotive circle. Welcome to break the news! WeChat ID autoWechat