Car Retailing - China - February 2016
Overview
 
What you need to know
The passenger car retailing market ended 2015 at the slowest pace for a number of years. The tax cut policy and the strong performance of the SUV sector saved the whole market from declining. Expectation for future growth should be tempered under this ‘new normal’ outset. The traditional retailing models still dominate although non-traditional models are gaining ground.

Covered in this report
Excluded
This report investigates car retailing to private individuals, focusing on new car sales, and covering the used car market where necessary. Passenger cars are the sole focus, and therefore any discussion of commercial cars is excluded. 

Passenger cars are divided into basic passenger cars (hatchbacks/sedans), sport utility vehicles (SUVs) and multiple use vehicles (multipurpose vehicle (MPVs)/cross-type passenger vehicles).

●	Basic passenger cars (saloon cars): used for the transportation of personnel and luggage, the driver is usually the central focus, with an emphasis on driving and riding comfort. Saloon cars generally include hatchbacks and sedans. 
●	Sport utility vehicles (SUVs): combine the comfort of a saloon car with off-road capability and functional versatility.
●	Multiple use vehicles: can be used to transport passengers or load goods. The category consists of MPVs and cross-type vehicles. MPVs are targeted mainly at household users, and the majority are manufactured based on passenger car platforms. Cross-types have a better loading capacity for goods compared with MPVs.
●	Car retailing in China is carried out via several distribution channels. The main types of car retail channel include: auto specialist stores (such as 4S dealers), auto markets, car zones/car cities, auto shows, used car dealers, used car markets and online sites. 
●	Car specialist stores (such as 4S dealers): authorised dealers dedicated to a single car brand. 4S dealers are the main type of car retail channel in China. This franchise business model is based on a ‘four-in-one’ concept that includes vehicle sales, spare parts, service, and feedback (survey).
●	Car markets: a number of car dealers in one location and providing other extended services. Usually managed by a management company.
●	Car zones/car cities: car zones and car cities are an upgraded version of auto markets, with peripheral services and also additional facilities such as car clubs. They are larger and located further away from cities.
●	Auto shows: organised by professional organisations or government organisations, held in large or specialised venues. Generally involve the exhibiting of cars, sales, trade exchanges and commercial negotiations.
●	Used car dealers: specialise in selling second-hand cars, usually multiple brands and vehicles of different ages.
●	Used car markets: multiple used car dealers in one location.
●	Online sites: the purchase process is conducted entirely online and the car is collected after purchase.