Recently, Yang Fang, the chief partner of Ruisi Consulting, accepted an exclusive interview with Securities Times and Che Capital, and made an in-depth analysis of the above issues.
Yang Fang, Chief Partner of Reith Consulting
Passenger flow has dropped sharply, operating costs have increased, and cash flow is tight ... An COVID-19 epidemic has made the automobile market, which has been experiencing negative growth for two consecutive years, worse, and some automobile dealers have even reached the critical moment of life and death.
According to a recent survey conducted by the Automobile Dealers Chamber of Commerce of the All-China Federation of Industry and Commerce, among the 37 large automobile dealer groups, 15 medium-sized distribution enterprises and 86 small-sized distribution enterprises that participated in the survey, about 30% of them said that they expected a net profit loss in the first half of the year, and the proportion of enterprises whose profits dropped by more than 50% year-on-year was 13%.
Under the crisis, how can car dealers hold their chips and hold the moat? What is the key point of building a "line of defense for life and death"? What is the difference between the emergency measures of large dealer groups and small and medium-sized enterprises? Which market segments should the policy "guarantee" target? Recently, Yang Fang, the chief partner of Ruisi Consulting, accepted an exclusive interview with Securities Times and Che Capital, and made an in-depth analysis of the above issues.
Enterprises should do a good job.
Preparation for a "protracted war"
"People only know the value of stability after experiencing a crisis, and cash is our best chip to resist risks. In 2020, both enterprises and individuals need to take cash as the king and manage their own' money bags'. " Yang Fang told Securities Times Auto Capital that the auto circulation industry needs a lot of cash flow to support it. Once the sales and after-sales service drop sharply, the cash flow of enterprises will be tense in an instant and come to a deadlock.
Yang Fang believes that in the short term, the impact of the epidemic on automobile dealers is to reduce corporate income and put pressure on cash flow. In the long run, the epidemic will also affect consumer confidence and market trends to a certain extent.
"Although the suppressed consumer demand during the epidemic will be released after the epidemic, I think this will only bring short-term fluctuations and will not bring about a big outbreak." In Yang Fang's view, combined with the economic situation and employment situation in China in 20 19, after the epidemic, consumers' spending power will decline.
"The panic of enterprises comes not only from the epidemic itself, but from the lack of confidence in the market situation after the epidemic." Yang Fang suggested that under this background, enterprises should be prepared for a protracted war, adopt "shock therapy" in the short term, lose weight extremely, and carry out centralized cash flow management.
"In the good old days, some car dealers didn't pay much attention to cash flow management. When they really encountered a crisis, they found that there were many loopholes. " Yang Fang said.
Securities Times cars have learned that many car dealers have begun to increase revenue and reduce expenditure to maintain the stability of cash flow. Yang Fang believes that it is not enough for enterprises to save themselves. In the short term, enterprises need external help if they want to tide over the difficulties, such as the support of relevant government policies.
However, she also reminded the Securities Times and Chedu that policy support can only help enterprises in the short term. In the long run, the epidemic will accelerate the management reform of the automobile circulation industry.
Yang Fang told Securities Times Auto Capital that for a long time in the past, investors in auto dealers had a weak voice and were often "led by the nose" by people below. Even if they want to find out the missing places, solve the problem of corruption, or change the management team, they will be subject to the hidden rules of the industry and have no way to start. The outbreak of this epidemic has intensified the elimination of automobile dealers, and will also return the right to speak to investors to a large extent. Investors can carry out compact management according to the actual situation of enterprises, sort out the talent structure, and truly complete the far-reaching changes of enterprises.
Large and medium-sized enterprises need their own strategies.
After the outbreak of the epidemic, many trade associations have made predictions that the impact on SMEs will be more prominent. Securities Times and Car have noticed that both large dealer groups and small and medium-sized distribution enterprises have recently adopted innovative modes such as webcasting and VR car watching to acquire customers to boost sales.
Yang Fang believes that the innovation of enterprises at the social and consumption levels will not play a great role. What enterprises need to do most at present is deep-seated reform.
It is worth noting that, in her view, large enterprises and small and medium-sized enterprises adopt different strategies when carrying out deep-seated changes.
For large dealer groups, the most important thing is to closely follow the national policy and explore derivative opportunities in combination with industrial policies.
For small enterprises, the most important thing is to keep cold storage, lose weight quickly, sort out their own structure and strive to persist until the end of the epidemic.
"For weak enterprises, it is better to die late than early, sort out their high-quality assets in time and sell them at a good price in mergers and acquisitions." Yang Fang predicted that the phenomenon of "big fish eat small fish" in the industry will become more and more frequent. After the epidemic, there will be a wave of mergers and acquisitions in the industry.
"Whether it is a large enterprise or a small and medium-sized enterprise, the more rational it is at this moment, the more sustainable it will be." Yang Fang added that it is expected that after the epidemic situation has eased, most car dealers will take the form of low-price promotion to grab customers, which is likely to set off a new round of "price war".
In this regard, she believes that it is unwise to win customers simply by reducing prices. For car dealers of different sizes, the most important thing is to define their own positioning, find high-quality customers, and use high-quality customers to increase profits.
In Yang Fang's view, in the final analysis, the healthy structure of enterprises can fight hard and protracted wars. The arrival of the epidemic has accelerated the liquidation of weak enterprises in the industry and promoted healthy competition in the industry to a certain extent.
Rational treatment of government subsidies
In view of the impact of the epidemic on the industry, a few days ago, a number of automobile dealer enterprises called on the government to introduce appropriate support policies. China automobile dealers association also submitted an emergency report to the China Banking Regulatory Commission and the Ministry of Commerce, hoping to provide relevant financial services.
Securities Times Che Capital noted that at present, the state has also increased its support for small and medium-sized enterprises by reducing taxes and fees, increasing loans, lowering interest rates, extending loans, and ensuring supply and expenditure.
Yang Fang believes that enterprises should be cautious about government subsidies. In particular, the illusion of instantaneous activation of the market cannot be caused by the role of subsidies. Generally speaking, enterprises should take economical management measures, put an end to extensive management, and make their own predictions while keeping up with top-level design, especially not to be carried away by subsidies.
"Government subsidies are to help enterprises tide over the difficulties and become a livelihood industry, but in the process of landing, they have also caused some behaviors of over-investment, overcapacity, price wars and even' cheating'." Yang Fang suggested that in addition to the actual financial subsidies, the government has many measures to guide and support enterprises.
She believes that during this period, government departments can refine industry standards and help enterprises to carry out standardized management, including talent screening and training, so as to accelerate the withdrawal of substandard enterprises, enable high-quality enterprises to achieve transformation and upgrading, and create more value.
"We believe that the government's support for enterprises will become more cautious and rational. We also believe that this epidemic will make more entrepreneurs wake up and seize the opportunity of transformation. " Yang Fang believes that the key to enterprise transformation is not only to clarify its own management structure, but also the talent structure. Therefore, she strongly suggested that the government's support for enterprises can pay more attention to personnel training and management, and give more guidance in these areas, which will help enterprises achieve more sustainable development.
Source: First Power Grid
Author: automobile capital
This article comes from car home, the author of the car manufacturer, and does not represent car home's position.