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Harmony Automobile, a dealer group specializing in luxury and ultra-luxury cars, has been revealed to have cut salaries, according to domestic media reports. According to a letter to all employees of Harmony Automobile, the company decided to take emergency measures to reduce the salary of all its headquarters and subsidiaries from August to December 2024, in which the salary of the chairman was reduced by 50%. The salaries of senior and middle-level employees have been reduced by 35% and 25% respectively, and the salaries of other employees have been reduced by 15%.

In response to the above report, Harmony Automobile responded: "the pay cut is a phased measure for us to actively adapt to the market environment in order to increase our ability to resist future risks." the company is confident that through various measures, this special stage will be ended as soon as possible. "

According to the official website of Harmony Automobile, the company focuses on the main business of luxury and ultra-luxury car sales, laying out the integrated service industry of new energy vehicles. As of December 31, 2023, Harmony Automobile has 80 authorized dealers worldwide, of which 14 luxury and ultra-luxury brands are operated in mainland China, with a service network covering 17 provinces and 40 cities.

According to Harmony Automobile's annual results, total sales in 2023 were 38475, up 8.4 per cent from a year earlier, of which 28465 were delivered to BMW (including MINI), up 6.4 per cent from a year earlier, and 4266 to Lexus, an increase of 10.1 per cent. It is worth mentioning that although sales have increased, Harmony is in a state of loss. According to the annual report, the operating income of Harmony Automobile in 2023 was 16.58 billion yuan, an increase of 1.6% over the same period last year, with a net loss of 252 million yuan and a loss of 1.628 billion yuan in the same period.

The salary reduction decision of Harmony Automobile reflects the severe challenges faced by the whole automobile industry, and most of the domestic car dealers are having a hard time at present. On the one hand, the excessive annual sales target of manufacturers leads to the imbalance between supply and demand in the automobile market, and multiple factors lead to a number of large-scale and substantial price cuts of new cars, which makes consumers wait and see and restrain the release of consumer demand. On the other hand, with the growth of new energy vehicles and the contraction of the fuel vehicle market, some dealers are facing a situation of weakening product competitiveness, which is mainly manifested by serious upside-down prices of new cars, chaotic market prices and lack of continuity of manufacturers' policies. tying and warehouse pressure occur from time to time, resulting in increased pressure on dealers.

According to the results of the national survey on the living conditions of car dealers in the first half of 2024 released by the China Automobile Circulation Association, only 28.8% of the dealers achieved their half-year sales targets in the first half of the year, while the percentage of dealers with a target completion rate of less than 70% still reached 33.3%. Among them, the luxury / import brand dealers achieved the target well, 44.8% of the dealers achieved the annual sales target, while the target completion rates of joint venture brands and independent brand dealers were 20.8% and 23.1%, respectively. In addition to the fact that most of the dealers failed to meet their annual sales targets, large-scale losses have also become the development status of dealers in the first half of the year, and the overall dealer losses are at a high level in recent years. According to a survey conducted by the association, only 35.4% of dealers made a profit in the first half of the year, while the proportion of loss-making dealers reached 50.8%, and the proportion of break-even dealers was 13.8%.

At present, the automobile industry is facing difficult challenges, and the government, associations and enterprises are all working hard to promote the recovery of the market. Many promotion fee measures, such as state tax cuts, local government subsidies, and factory support, have a strong pulling effect on the consumer side of demand and accelerate the recovery of the automobile market. Industry insiders said that traditional car dealers need to go from offline to online, omni-directional layout of sales channels to find new opportunities for survival. Traditional car dealers should actively transform and reform, and automobile marketing has been distributed to direct stores and supermarkets, and it is necessary to establish cooperation with new energy vehicle brands in due course.

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