Gasgoo Munich- On Sept. 19, the 2026 International Forum(Teda) on Chinese Automotive Industry Development hosted a session titled "High-End Insights: Smart Transformation, Green Upgrade, Building a New Auto Industry Ecosystem." Wang Du, vice president of the China Automobile Dealers Association (CADA), delivered a speech on "Symbiosis and Breakthrough Amid Upheaval: Reshaping the Auto Distribution Ecosystem." China's auto industry, he said, stands at a historic turning point. As electrification and intelligence reshape both vehicles and distribution, the sector has officially entered a shakeout — and its center of gravity is shifting from manufacturing to the aftermarket services market.
Image source: 2026 TEDA Forum
Wang laid out the mounting pressure on dealers in stark terms. The average gross margin on new cars has slumped to -21.4%, reducing vehicle sales to little more than a traffic gateway. The average inventory cycle sits at 1.58 months industry-wide, with mainstream brands reporting inventory depths exceeding two months. Dealer satisfaction with automakers has dropped to a recent low of 56.3%. Optimism is scarce: just 11.2% of dealers expect full-year growth, while over 70% anticipate earnings will decline.
CADA projects China's passenger-vehicle market could contract by double digits this year, leaving exports as a vital pillar for overall volume. With the profit base in aftermarket services shrinking, the traditional dealership model will collapse unless the industry restructures how it makes money.
Even as the industry experiments with agency, direct sales, and hybrid distribution models, the core mission — connecting supply with demand and putting service first — hasn't changed, Wang noted. The pivot must be from simply selling cars to managing customer relationships and maximizing lifetime value, using digital tools to unify touchpoints. Dealers and automakers need to forge a new, equal, and mutually beneficial partnership. Meanwhile, emerging services like vehicle modification show real potential as paid offerings. In a market defined by existing stock, the distribution side must generate tangible value to strengthen its voice in the industry.
