‘More premium car dealers that McDonald’s’
A study on the Chinese automotive distribution landscape from Bernstein Research suggests that premium makes are now experiencing difficulties in the Chinese market due to the large number of premium dealers in major cities.
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Bernstein research talked to executives at a wide range of OEMs in China earlier this year and found that are having a tougher time expanding their dealer networks to grow sales.
One reason for that is that “some fear that premium brands have too many dealers that are too close together in big cities, which could be a cause of recent discounting,” Bernstein said.
The research company also said that companies are having a more difficult time finding and signing up new qualified dealers. Chinese entrepreneurs are less keen to get into the business than they were in the past, Bernstein said.
Analysts at Bernstein Research mapped all of the premium brand dealers across China by city and concluded that there are now more than 1,300 premium car dealers in China. In a research note, Bernstein said that that figure is in absolute terms ahead of the UK, but significantly behind Germany and the United States. While this difference might be reassuring, the analysts note that Chinese cities are far less affluent than are US or European cities
Shanghai, for example, has 42 premium dealers, some of which are less than two miles apart. The analysts note that many cities have more premium car dealers than they do McDonald’s fast-food restaurants.
