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More than Half Car Dealers in China Lose Money in 2014

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Published on : Jun 15, 2015

To be a car dealer in the world’s largest car market is not all about a sweet ride. With dropping sales growth, a rising number of Chinese auto dealers are alleging that car makers are constantly pushing to achieve impossible targets.

In doing so, car dealers also have a hard time to receive investment fot operation and expansion, as per a recent survey from J.D. Power, an automotive consulting firm. As per the survey, dealers are unable to receive adequate financial support from the financing arms of car makers or banks for improved performance on the car market.

As much as half car dealers in China lost money on sales of new cars, as per survey from J.D. Power. IN 2013, the statistics were 28%. The pattern is continuing in this year. As well, as dealers are pushed to hold cars sales than what they can sell and must also offer deep discounts to shoppers to persuade buy cars.

The result shows the fact that the auto market in China is still growing through pains. In particular, in the industry auto financing is a new concept, which gives dealers less flexibility than their counterparts in developed economies. 

In comparison to the U.S., China is still new in terms of tools that should be given to dealers for car sales, as said by vice president, for China and global retail sales for J.D. Power.

Auto financing helps dealers at two fronts- firstly, it enables them to sell more cars if consumers can be offered quick and easy access to car loans. On a measuring scale of 1,000 points, the overall satisfaction for provider of the service dropped to 794 in 2015, compared to 817 in 2014.