CADA dealership association asks for support funding from FAW Toyota

Gasgoo.com (Shanghai December 30) - Earlier this month, the China Automobile Dealers Association sent a letter to FAW Toyota asking the joint venture to supply 220 million RMB ($35.84m) in funds to supports its dealerships, China Economic News reported today.

In the letter, CADA pointed out that FAW Toyota’s policies and actions have led to rising inventories, which has caused a lot of difficulty for dealerships which have led to price drops, falling profits and decreasing sales growth rates. CADA represents the interests of over 500 FAW Toyota dealerships. Many of these dealerships offer subsidies of less than 4,000 RMB ($651.59) per sold vehicle.

Representatives from the CADA explain that decreasing sales growth has made things harder for dealerships, particularly those of manufacturers’ who rely on outdated business models with regards to automobile inventory. The CADA stresses that manufacturers face a battle of survival and many risk bankruptcy if inventory and other issues aren’t properly dealt with.

The CADA has formed several associations to help aid association of various brands, such as the BMW Dealership Association, Mercedes-Benz Dealership Association and Audi Dealership Association. The associations have been very successful, with Audi going as far as taking the initiative to open communications with the Audi Dealerships Association. BMW and Mercedes-Benz have also taken similar measures, such as responding positively to their respective dealership associations’ requests for grants.