Presently, there are over 30,000 auto distributors in China. Since the establishment of the first 4S shop of Guangqi Honda, there were over 10,000 auto 4S shops in China by the end of 2008. The number of Chinese auto 4S shops ranks the world Top.

With the intensified competition on Chinese auto market, the perfection of the sales and service channels is highly valued by auto enterprises for scale expansion. Though auto 4S shops require a large initial investment, they have become the main sales and service channel for Chinese auto manufacturers dependent on their terminal advantages of specializing in sales and service as well as building brand images. Currently, Chinese auto market gradually enters the mature stage with improving marketing concepts and maturing consumer psychology. After the prosperity for several years, Chinese auto 4S shops enter the adjustment stage with sharp profit decrease and intensified competition. Moreover, auto 4S shops of some brands even face crisis.

There are mainly two patterns for the collectivization of Chinese auto 4S shops at present. Firstly, horizontal development, also called multi-brand operating pattern. This is the most common pattern on the same regional market. This is because when auto manufacturers authorize their distributors, they would usually only give one sales network to a distributor in the same regional market considering the network security, distributor strength, management and control capacity of the same regional market. Secondly, vertical development, also called single brand operation. This usually emerges on different regional markets. This is much better than the first pattern, reducing problems faced in the collectivization process. It is easier to get familiar with brands to manage and operate 4S shops and auto manufacturers have fewer worries on network security. This complies with the demand of auto market development. In the coming years, the auto sales will transfer from the distributed pattern to the cluster pattern. Auto street and auto industrial park will become the mainstream sales patterns, setting up auto 4S shops collectively and planning uniformly to create the cluster effect.  Read more...