In 2024, the Chinese automobile market experienced an unprecedented “price war,” which directly led to 4,419 4S stores nationwide exiting the market, marking the first-ever negative growth in the total number of 4S stores. The financial data of top 4S groups vividly reflected the industry’s grim situation, with both revenue and net profit declining across the board.
4S stores are sales outlets that integrate car sales, maintenance, parts, and information services.
According to official data, China’s automobile production and sales volume exceeded 30 million vehicles in 2024. As a crucial part of the automobile circulation market, car dealers faced severe terminal price inversion due to the escalating price war and the dual impact of channel transformation brought about by the transition to new energy vehicles. Profit margins were sharply compressed, leading to more dealers selling at a loss, with a wave of store closures and retreats permeating the year.
According to data released by the China Automobile Dealers Association, by the end of 2024, the total number of 4S stores nationwide stood at 32,878, a decrease of 2.7% compared to the previous year, marking the first volume reduction in nearly four years.
In 2024, a total of 4,419 4S stores exited the market. Of these exits, 93% were traditional fuel vehicle brand 4S stores. In terms of brand attributes, independent brands accounted for about 65%, joint venture brands for approximately 29%, and luxury brands only 6%.
Lang Xuehong, Deputy Secretary-General of the China Automobile Dealers Association, stated that the intense price war in the automobile market last year, along with the increased competition among same-city and same-brand channels, led to the elimination of some stores, which was a major reason for the overall decrease in the number of 4S stores.
Looking at the financial data of the top 4S groups can more intuitively reflect the severity of this industry. Interface News compiled the financial data of seven large listed 4S groups that have released financial reports, with both revenue and net profit almost universally declining.
In terms of revenue scale, Zhongsheng Group led the way sharply with 168.1 billion in revenue last year, while Yongda Auto also exceeded 50 billion. Among the companies with over 10 billion in revenue, all showed a trend of decline compared to the previous year, with Meideast Auto and Xinfengtai each experiencing more than a 20% drop in revenue.
Regarding net profit, only the leading companies Zhongsheng and Yongda remained profitable, with Meideast Auto suffering the most losses at 2.26 billion. Four 4S groups that transitioned from profit to loss added to the losses, with Meideast Auto and Xinfengtai experiencing a staggering 1548% and 1875% decline, totaling over 4.3 billion yuan in losses among the five companies.
New car sales have always been the major revenue and profit driver for 4S groups, but last year, major companies experienced significant losses in this aspect, with new car revenue declining by over 20% across the board.