Beijing companies support cross-region sales, dealers not so anxious

Gasgoo.com (Shanghai February 14) - In response to automobile purchase limitations put in place recently, automobile companies and Beijing dealers are both considering relaxing their policy regarding sales to residents living outside of the capital, according to a report carried by bjnews.com.cn. Dealers are also mulling over whether or not to make large staff cuts, as overall sales decline sharply.

Decreasing sales leads to policy changes

The unnamed general manager of one Dongfeng Yueda Kia dealer confirmed that several companies announced their support to dealers for relaxing strict sales policies limiting sales to residents living in areas outside of Beijing, at a conference held last month. "Although there is no clear policy yet, the restrictions have already been somewhat eased." He said that potential buyers living outside the city, who may have originally been turned away, would be welcome to make purchases now, as they represented "a definite increase in sales [for us.]"

Guangqi Honda also lessened restrictions on cross-region sales prior to the Chinese New Year holidays (beginning February 2). Wang Jingsheng, president of the Lishui Bridge Guangqi Toyota dealer, said that the company allowed them to expand their sales area to cover Tianjin, Shanxi, Hebei and Inner Mongolia. However, he was unsure whether Guangqi would continue the policy following the holiday's conclusion.

Additionally, companies are modifying their Beijing sales targets. Dongfeng Yueda Kia stated that it would be decreasing its sales targets by 60 percent, as well as reconsider its yearly strategy. Guangqi Toyota, meanwhile, would temporarily not set monthly targets for dealers in the capital.

Dealers aren't pleased

Beijing dealers reportedly aren't happy with the new influx of customers from other regions and aren't thrilled forchanges in the sales policy. According to Mr. Wang, when the issue was brought up at the summit, only a few dealers expressed support, with the majority stating there was no need to expand sales. "Customers [from outside of Beijing] are not our ideal target," he stated. "[They] do not have a very high income, and will not come to Beijing for post-sales maintenance and service. [As a result,] they will not create any post-sales revenue for us." He added that, because of decreasing sales, the market was not as competitive and prices were stable, therefore there shouldn't be a large number of buyers coming to Beijing to buy cars.