By Yang Zhongyang, Tong Na & Chang Yanjun

Sales channel is transferred towards the west and expanded downwards to the low-level market

According to the development of auto market in the major developed countries of the world, there are two periods of high-speed development, viz. the time when the number of cars possession in 1000 people increases from 5 to 20, and the time from 20 to 130.

The number of cars possession in 1000 people has reached to 124 in the first-tier cities of Beijing, Shanghai and Guangzhou in China and it will exceed 130 this year. It means that the second high-speed growth period has ended in the first-tier cities. Moreover, in view of industrial transfer and increase of the personal incomes, new change emerges in the auto market.

Under such a background, the auto enterprises begin to transfer their sales focus to the secondary and tertiary market, even to the quaternary and rural market. According to the data, the number of cars increased by 5350 in Xinji, Hebei Province from January to October, an increase of 52.3% year on year.

Chen Min, general manager of GAG (Guangzhou Automobile Group) Gonow Sales Co., Ltd., says that "as for the downward expansion of the network, apart from the primary and secondary stores, we also increase the number of linking stores. However, the number of our service stations and the speed of downward expansion are increased more and quicker than that of sales stores." Presently, there are more than 200 sales stores of GAG Gonow in the whole country, but there are more than 400 service stations.

The sales volume of Great Wall Motor in the secondary and tertiary market increased quickly in 2010. Aware of the benefit therein, Great Wall Motor makes a proper adjustment in sales strategy and mode this year. It covers the whole secondary and tertiary market based on the market capacity, gradually shorten the service radius, enhance the terminal capability, strengthen the support for dealers, guide them to better their work, and improve the network image and functions.

In spite of dramatic declining of the growth generally in the auto market this year, there is still a large rigid demand in the vast secondary and tertiary market. Xu Changming, director of Department of Information Resource Development of State Information Center said in the 6th Chinese Secondary and Tertiary Auto Market Forum held recently that "westward transfer and downward expansion of the auto market has become a new change of the auto market development and also a big trend for a long time in the future".

However, we should also note the particularity of the secondary and tertiary market compared with the primary market. An insider makes an analysis that vast land necessarily brings some difficulties for the construction of sales and service network. Enterprises should adjust flexibly their measures to local conditions so as to provide consumers convenient and reliable service in the vast land; complex road condition, besides testing the reliability of the auto products, will influence on the demand preference of consumers��; cultural difference diversifies the consumer preference;  word-of-mouth is also a challenge for the enterprise sales strategy. Such a circumstance indicates that it is easy to enter the secondary and tertiary market, but it needs more effort by auto enterprises to settle down firmly. In the secondary and tertiary market with a large geographic and demand difference, the brand construction can be done solidly only through well maintaining the entire value chain.

Watching out for overrun of awards in the auto industry

"2011 China Electric Car Awards in Whole Industry", "2011 Top Ten Engine Awards" and "2011 Tyre Awards"... When it comes to the end of the year, the reporter opens a newspaper at random and finds that such awards are everywhere; clicks the auto channel of several websites optionally, various award ceremonies for annual car types emerges one after another.

According to incomplete statistics, it is the high time for awards in the auto industry in the end of every year and various levels of awards are presented nearly every day. "In every December, I will run about in Beijing to accept awards, 5 to 6 ones at least, sometimes more than ten". A president from an auto company complains to the reporter, "if you fail to accept, it may offend the sponsor; if you choose to go, such awards are not so attractive." In view of a large amount of awards, one domestic auto company even works out a "grading rule of award acceptance". It will send different levels of company leaders to attend the award ceremony according to the different influence of sponsor.

How much value is there for such overrun awards? If the answer is no, certainly some people will think you carry it too far. However, after further analysis, we will find that it is an unquestioned fact that most awards standards in the auto industry are not so scientific. Take the hottest awards of annual car types. Currently, most sponsors still choose a comparatively subjective method through reader, audience and netizen voting. Although an expert awards committee is set up for some awards, it only carries out simple road test for cars; furthermore, there is no real test, the award awards completed relies on the subjective feeling of appraisers, readers, audience and netizens. As for the awards, most sponsors seem to be much generous and even set up dozens of awards, so the winning opportunity is almost 100%. Thus, what is the credibility and influence for such awards?

In that case, why are the awards events so overrun in the auto industry? As the saying goes, no benefit, no getting up early. Since the sponsors are driven by profits, they never feel tired of giving awards. Meanwhile, "vacillating" thinking of enterprises also beef up such an atmosphere. It is known that the awards in the auto industry make enterprises at sea, but they, for any reason, are often unwilling to offend the sponsors, so they have to attend. Furthermore, from the view point of enterprises, award is an honor all in all and also a moral encouragement and psychological comfort. If it needs no or a little money, why not?

Commercialization of awards is an outcome of market development, so there is nothing to be said against it. One should say that through the method of awards and rewarding, we make a timely summary about the success and failure in a year and work out a better plan for the development next year, which seems to be very reasonable. However, it should be on the basis of objectivity and fairness. If there is no scientific awards system, if it is only closely related with profits and if it increases the enterprise cost for no reason, makes people confused about the industry and creates an adverse social effect, we must control it seriously.