The advance of Chinese cars is unstoppable. Brands such as BYD, NIO and Hongqi make their appearance. MG, Polestar and Lynk & Co are born. But unlike traditional brands, these newcomers do not opt for their own dealers. They work with existing dealerships, which already represent other brands, or they also opt for independent garage companies, such as Kwik-Fit or Profile.
And this while many car dealerships have been struggling to keep their heads above water for years. After all, fewer and fewer new cars are being sold, and modern cars require less maintenance. Nowadays, car maintenance is partly done remotely, via ‘over the air’ software updates.
The fact that you leave the brand dealer showroom with your new car through the front door and come back through the back door for service is gradually becoming obsolete. Chinese newcomers do it completely differently. They prefer to opt for online sales, without the intervention of retailers. And for maintenance, they often refer their customers to existing car manufacturers who already represent multiple brands.
NIO and Airways go one step further. They send the car buyer for service to a select branch of Kwik-Fit (NIO) or Profile (Aiways). Striking, because from the report ‘Mobility in figures Auto 2022‘ by BOVAG and RAI, it seems that cars usually only go to the fastfitter from around the age of seven.
NIO refers you to Kwik-Fit for servicing your new car.
Traditional automotive brands try to keep their network exclusive
“Besides sales outlets, a good maintenance and repair network is also needed for a successful introduction of a new car brand,” says automotive expert Mark Wintjes. He is a director of WESP and provides software that can help automakers run their business smarter. Wintjes: “In such a network, the necessary technical knowledge about the cars in question must be present, but also the specific manuals, tools and equipment.”
Also, according to Wintjes, trained mechanics are needed. Parts must be delivered on time and any warranty issues must be handled properly. Wintjes: “Traditional brands try to create and maintain their network in all of this. Because they know that such an exclusive network gives the brand more opportunities.”
To clarify: since time immemorial, a car manufacturer mainly earns from this after-sales service: maintenance, repair and sale of accessories. Sometimes it’s even the cork that floats the showroom. But setting up such an aftermarket network is very expensive. Wintjes: “Instead, a new brand ends up with a dealership that already has many brands under its wing and offers many locations for maintenance. Or they opt for a universal chain with which they enter into national agreements.”
Success with fastfitters cannot yet be measured
The success of servicing through an existing quick installer like Profile is difficult to measure. In the Netherlands, Airways is the pioneer in this but the brand don’t catch on. Hardly any cars from Airways show up in the specialist branches of Profile.
NIO is right started to the Dutch adventure. NIO spokesman Mark Heiligers: “The standard maintenance requirement of a NIO is very limited. This ends with the replacement of filters, brake fluid and various checks. Kwik-Fit is an excellent partner for this.”
“In addition, we are now also building our mobile service team, which visits the car user. This two-pronged maintenance strategy ensures that we do not have to invest in our own workshops. This way we can better focus on brand development “.
Dealer groups wear different hats
MG, BYD and Hongqi do not have their own importer. The delivery of the cars purchased (online) and the after-sales are entrusted to large groups of dealers. MG has opted for Van Mossel, BYD relies on Louwman and Hongqi has found refuge with Hedin, until recently known as Stern.
Van Mossel spokeswoman Wendy van Wijngaarden explains why MG is choosing this more or less traditional path. “MG chose us because we have a great knowledge of the Dutch market and a nationwide network. A team of permanent brand specialists guarantees the brand expertise in after-sales.”
The vision of the future from 2015 becomes reality
In 2015, William Smit, automotive consultant at the DBSC office, along with other industry experts outlined a vision of the future of a fictional Chinese car brand called Qeely. A tiny sales network and external maintenance partners were the most talked about ideas. Smit: “The outlook at the moment is consistent with the current situation. Many other brands are coming this way from China, which are starting in a completely new way here.”
“Eliminating a separate importer for the brand also saves costs,” Smit says. “This compensates for the loss of profit that normally results from after-sales. This type of savings allows the customer to benefit from lower purchase prices. Surprisingly, it can be seen that mainstream brands are already choosing this model. In Sweden, the Ford’s import organization has now been dissolved.There, the dealer giant Hedin now organizes the distribution and maintenance by itself.
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