Suzuki Motors solves China's dilemma and restarts its online sales

On August 29th, the sales consultant at Shanghai Changde Suzuki Store in Changde, Shanghai, is relying on a new Alto car to advertise its customers to attract future buyers. In the past few days, senior managers of Jiangxi Changhe Automobile have been busy with various external calls and denied news of integration with Changan Suzuki.

In Beijing, Suzuki Hiroshi, general manager of the newly appointed Suzuki (China) Investment Co., Ltd. (hereinafter referred to as “Suzuki China”), is busy improving the plans for the sale of Changan Suzuki, Changhe Suzuki and imported Suzuki. The program is bringing together the busy three parties.

Behind this is the second effort by Suzuki Motors to crack down on China's difficulties.

"Sinolink sales are the current plans advanced by Suzuki. Although difficulties are encountered, Suzuki's long-term promotion strategy is no matter how the grid connection plan is implemented." Suzuki China's new general manager Sakamoto Hiroshi said recently. After more than two months of research, Sakamoto Hiroshi decided to restart the three-network merger plan left by his predecessor Hashimoto Junming. He intends to reverse the performance through this extremely rare method in the automotive industry.

The online sales plan was first born in January 2007. After 14 years of hard work in China and two joint ventures, Suzuki's performance in China is still little improved. What's more, Changhe Suzuki suffered losses for three consecutive years in 2006, 2007 and 2008 and failed to achieve profitability. This is not good news for Suzuki, the world's top-10 automotive giant.

It is in this context that Junkihashi Hashimoto took office. After achieving modest improvement in China’s performance, Hashimoto Junming began a drastic reform—the joint sales of three networks, namely the Suzuki China grid-connected program.

The core idea of ​​Hashimoto Junming is the joint sales of Changan Suzuki, Changhe Suzuki, and imported Suzuki three brand dealerships. “As long as the Suzuki LOGO models are sold, they can be sold in three brand stores” through sales outlets and single stores. Increase in the number of models to achieve greater sales.

This idea is very original and unique in China. Only Dongfeng Honda had previously borrowed vehicles from a Guangzhou Honda dealership when the channel was not built. Due to the company's agency rights and business policies, Changan Suzuki, Changhe Suzuki, and Suzuki's imported brands seem to have a great deal of desire, but their implementation is also unprecedentedly difficult.

At the end of 2008, Hashimoto Junming’s triple-play merger plan came to an end and almost disappeared. The following year, he was replaced by Sakamoto Hiroshi, who had very much European experience.

Today, Hashimoto Junming’s China grid-connected plan was inherited by Sakamoto Hiroshi. “There are nearly 250 4S stores in Changhe Suzuki, and there are also 250 Changan Suzuki. If we add 4S stores of two joint venture companies, we will reach more than 400. We believe that joint venture products can make up for each other to promote sales."

Sakamoto Hiroshi said that the two joint venture companies did not communicate when establishing a 4S store. Therefore, the grid connection will encounter difficulties, but the implementation of this change will not change. “In the future, the joint sales plan will be further promoted. The goal is to The products of the two joint ventures are combined with imported products to achieve a total increase in sales volume of Suzuki."

Since 1+1=2, a more in-depth "1+1" or even "2+1" is bound to bring about better results. But Suzuki dealers in China do not think so.

In January 2007, Hashimoto Junming began to test his ideal of transformation in a small scale. Under the leadership of Suzuki China, Changan Suzuki and Changhe Suzuki, as well as all models of imported Suzuki, have implemented same-store sales in some 4S stores. In June 2007, the sales network of Suzuki's two joint ventures in China formally merged.

After the initial joy, numerous problems began to appear. In this connection plan, Changhe Suzuki dealership is the most supported. Changan Suzuki Swift and Tianyu are all models that can bring sales. It is also possible to share their profits. However, Changhe Suzuki dealers soon discovered that Changan Suzuki is still more inclined to support authorized dealers rather than selling themselves through the Internet. "When the models are tense, Changan Suzuki does not always give us a car. Although we can also sell Changan Suzuki cars, but no car how to sell?" Changhe Suzuki, a dealer told CBN reporter.

The double standards of business policies, payment channels, and maintenance systems make dealers harder to accept. The above-mentioned Changhe Suzuki dealers stated that although the products are more abundant, the liquidity occupancy rate is even higher, making the funds needed to operate a store more than double. In the after-sales segment, Changan Suzuki and Changhe Suzuki have different technical standards. Dealers need to purchase more maintenance equipment to repair their cars, which in turn increases dealers' equipment costs by nearly a million yuan.

The Suzuki China, the dominant party in the triple play, did not implement unified management and publicity for the three brands' business policies and brands. In addition to the dealers who initially obtained Chang'an Suzuki and Changhe Suzuki's distributorship rights, most dealers started. Withdraw from the grid.

According to Suzuki China’s plan, 170 dealers will be connected to the network, but only 93 actually participate. By the end of 2008, these 93 dealers had lost half.

Of Shanghai's four parent Anzu Mu dealers, only Shanghai Lianhai is still insisting on online sales. In fact, in 2007 and 2008, Shanghai Lianhai obtained the rights to Changan Suzuki, Changhe Suzuki and imported Suzuki, respectively, and it was not Hiroshi Himemoto's envisaged resource sharing type of grid-connected dealer.

It is reported that in June 2008, all Changhe Suzuki 4S stores in Beijing refused to sign the second year of grid-connected cooperation agreement, and the number of dealers participating in grid-connected sales decreased from 6 in last year to two.

When the spring rain of policy spilled over most of the microcar companies, Suzuki Motor did not benefit too much. In the first half of this year, Wuling and Changan Automobile's two microcar companies each achieved an increase of nearly 50% or more. The performance of Suzuki, the global "micro-vehicle expert," was somewhat "unworthy of name."

In the first half of the year, imported Suzuki sold 1,500 vehicles in China. Changan Suzuki sold 69,260 vehicles, a negative growth of 0.1% year-on-year. Changhe Suzuki did not publish half-year sales data. Its annual target is 100,000 vehicles, and the completion status is not clear.

In contrast, Changhe Suzuki is even worse. From 2006 to 2008, Changhe Suzuki has lost money for three consecutive years. The Changhe Auto Annual Report shows that Changhe Suzuki suffered a loss of 292 million yuan in 2006, a loss of 768 million yuan in 2007, and a loss of 393 million yuan in 2008.

In May of this year, *ST Changhe received the “Decision on Suspending the Listing of Jiangxi Changhe Automobile Co., Ltd. stocks” from the Shanghai Stock Exchange. Changhe Automobile suffered losses for three consecutive years in 2006, 2007, and 2008 since 2009. 5 It was suspended on the 11th of the month.

Although Chang'an Suzuki’s case won, it cannot satisfy both shareholders. In 1993, Suzuki, Nissho Iwai and Changan Automobile formed a joint venture Changan Suzuki. In 1995, Changan Suzuki's first car was off the assembly line. However, to this day, Changan Suzuki has only imported four models in the 14 years since it was put into production.

Recalling the history of Changan Suzuki's development, it is not difficult to find that from 1995 to 2000, Changan Suzuki relied on an Alto for a full five years to have a second car antelope listed. In the next five years following the listing of antelopes in 2000, Changan Suzuki once again faced the embarrassment of not having new cars until the launch of Swift in 2005.

In one after another product "vacuum period", Changan Suzuki missed China's fastest growth rate for 6 years. As an automobile giant that entered China and the top 10 in the world in 1993, Suzuki Motor sold less than 200,000 vehicles in China every year. Honda and Nissan, whose Japanese counterparts Suzuki had arrived later than Suzuki, have already begun to gain a share of 500,000 vehicles a year in China.

As Suzuki president Suzuki revised his predictions, the crisis faced by the top three automakers in the United States hit Japanese automakers. The second quarterly report this year showed that most of the top eight car makers in Japan continued to lose money, and only a few companies such as Suzuki were still profitable.

However, the situation is not very optimistic. In fiscal 2009, Suzuki expects the company's net profit to decrease by 82%, which is expected to be 5 billion yen; operating profit will decline by 87% to 10 billion. It is foreseeable that Suzuki Motors will take the lead out of the financial crisis with the advantage of emerging markets. However, when China is the world's largest emerging market, when will Suzuki Motor Co., Ltd. bid farewell to the embarrassment?

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