More authorized car dealerships face closure   

4S店年运营成本超千万 限购限行常态化或引发闭店潮

(ECNS) -- High operating costs and vehicle restriction policies will close more 4S auto stores (authorized car dealerships), according to a newly released automobile dealer survey. 

The China Automobile Dealers Association (CADA) said in its "2014 Annual Auto Dealer Satisfaction Survey" that only 30 percent of dealers are showing profits this year, a significant drop from 70 percent in 2010. Inventories of unsold vehicles have hit a new high, with an estimated 2.29 million in total. 

Auto dealers face more losses than last year, and the dissatisfaction rate has risen from 17.88% to 22.65 percent. 

BMW dealers in China have delivered a letter to Karsten Engel, the CEO of BMW China, according to a newly released media report, to apply for an additional rebate of 6 billion yuan ($970 million), reflecting the challenges facing auto dealers. 

Shen Jinjun, president of CADA, pointed out that many auto dealers are in debt for store construction. In addition, low risk resistance and single source profits are factors in auto-dealer losses.  

Zhu Kongyuan, secretary-general of the China Auto Dealers Chamber of Commerce (CADCC), said that factors such as surging production capacity, unreasonable business policies and financing difficulties are forcing more auto dealers into financial difficulties. 

A manager of a Japanese auto dealer said that the auto parts sector anti-monopoly policy scheduled for next year is a blow to the already depressed automobile markets, because auto dealers will lose more after-sale customers.  

In addition, if the odd-even car ban is implemented, the reduction of cars on the road will worsen the already grave situation and push more 4S auto stores into bankruptcy.