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The president Pang Qinghua answers reporter's questions in Beijing International Auto Show in 2010

Source: Authoradmin Hits11105 Time2010/7/16 8:57:13

Leatherette: On the day of Beijing International Auto Show in 2010, President Pang Qinghua was
Interviewed by Webcars, Chinacars, Bitauto, Jinghua news, Autobizreview, Beijing news, Pcauto and
so on, our website transfers to publish for readers.

Do you have time to visit the Beijing Auto Show ? How about your feeling?

Today I finished one meeting, and hurried to go to exhibition, time is not available to see just now.
Later I must observe it one by one, because I learned a lot of things in Auto Show every year. For example, there was one model of car in Tokyo Auto Show, only with two doors in the front. Normally if people want to go to the backside, they must move the front seat forward and then could go behind. But this car has 20cm small door which could let leg move inside, so don’t need to move the front seats, it is very convenient. When I saw it, I have a lot of association of ideas. I think every Auto show is arena. It is a very good window to show our culture, technology, strength and proposed idea to customer.
What kind of technology you mentioned does Subaru show in your mind?
Subaru car is always very active in China market, all people could see its repid rising speed. It grows up 86% in China last year. I think this year it will grow up 86%. According to my personal judgment this year, if all people work hard, we will be the number 1 brand in China imported car if estimated by quantity. This is not a small progress. This means it has already adapted to the market, catered for customer’s taste. Car producer could satisfy customer’s requirement and the things that customer wants,so they have good sales record.
As well know, many times, there is no merchandise on hand of our car. Because normally our forecast sale  is very high, but every time the result of sforecast sale is behind marketing requirement. The attention has to be paid attention.  Our target is very high, but in practice increasing is higher than our target, which makes some customers to wait for the car. But as I know the special technical of Subaru is that it is excellent in snowy, rainy, crooked road. Its catching ground ability is very good, especially in snowy days, I suggest you drive Subara in snowy ground by yourself, go to try. Last year, Sabara occupied 7 in 10 best dealers last year.
President Pang, would you please let us know how many cars could be soled proximately in one shop very year?
The maximum sales quantity is 2000 pieces. The first number 10 approximately sales quantity is 1000 to 2000 pieces. As well know, Subaru’s administration method is different with other importer. Subaru depends on dealer as regional agent. It rooted in the Subaru automobile culture inside these three general agents, the agent carries on the explanation according to the Chinese actual situation, one explained step by step with the customer, tests a car step by step, propagandizes step by step, all contains slowly including China's culture in inside, like Subaru car in "Non-Honest Do not harass" .Both had achieved Fuji sells the vehicle, curries favor with the vehicle the idea, and enable the Chinese customer to obtain the safeguard, has catered to the customer need, therefore I thought the business agent management managed directly, compared with the foreigner has the superiority.
I knew the original brand passenger vehicle policing method influence, very many powers of attorney lets the foreigner take away, but the matter has not been well handled, some vehicles also withered, what reason? It is unaccustomed to the climate, his idea does not confirm to China's reality, finally is defeated on the defeat above this. As everybody knows that, in China, imports the vehicle to realize 86% growth, moreover continues for a year, this in the world all is rare, this is a miracle. This indicated the productive forces and the productive relations had achieved the coordination and the match, The foreign product and China's dealers also should be coordinated.
Zhongji and Subaru cooperation, took the biggest sale on commission group, we also reads very many advertisements by the Zhongji image appearance, then in the future there will be deeper level cooperation with Subaru?
The in-depth cooperation is the pursuing thing for both side, but Subaru is an enterprise which is careful, at present pursues the quantity in front of the financial crisis quantity, 600,000, in other words, it
needs to eliminate thoroughly the financial crisis influence, this company I contact very long time, extremely rigorous, does not advance recklessly, to present, there is only two factories in the whole world, a American, a Japanese native place, therefore many vehicles are depending on the import and export to carry on. As everybody knows that, entering a country, going out of a country is very not the easy matter, because China strengthened the management of importing the vehicle, like the security management, each section new vehicle all had to carry on the test which has very long time. A section vehicle produces from the Japanese native place, then arrives the Chinese market, even if synchronization does the work, I estimate also need for half year, therefore this enormously affects its development. I believed China can become its third factory, but when, I feel now should not be able to be too far, now already has the plan.
Present Pang, Would you please talk about Power Diversity Automobile expansion plans in the next 3 to 5 years.
Power Diversity Automobile is a multi-brand company, at present it has 73 brands, the majority of them manage extremely well, Power Diversity Automobile focus on each brand. It is responsible for the factory, responsible for the customer, and then develops itself.
At the end of last year, In Chinese automobile circulation congress, we estimated that in 2010 the China auto market will grow up by about 15%, normal factory target grows up this year also will be about 15%, certainly there is also frantically speaking , some said it will turn over one time, but last year blowout phenomenon definitely could not reappear, which has already been expected. Simultaneously we estimated that the commercial vehicle can blow out, now it is already become the fact, from January to March, commercial vehicle grew 60%, moreover the duration is long. We once continuously held several congresses, and the content told why the commercial vehicle can blowout for everybody, I asked people how about the weather this year, people said it was too cold, I said it was too cold to froze the ship in the sea, the stock of coal power plant in south is in danger, because the train was in the Spring Festival transportation busy season, in this case, the train transportation capability is insufficient, only method is using car to transport coal. At that time, people buys the vehicle in abundance, does not hesitate the price to guarantee the electricity coal. At that time the semitrailer busy season is coming half month earlier than the old times, started at the beginning of December, moreover fell short of demand. 

In order to seize the market, many factories also adjust production plan. Dump truck is primarily  adjusted, so at present it still falls short of demand, all trucks are still blowout, regardless of Auman, Shaanxi automobile, Sinotruk, Jiefang, Dongfeng Motor Corporation, and Sichuan automobile and so on all are blowout. The profit after tax of our commercial vehicle can achieve four hundred million this year. Therefore it is very important of the marketing judgment for a big enterprise group, but not simple.
Inside Power Diversity Automobile’s profit, which has more profit? Is commercial vehicle or passenger vehicle?
This depends which year, last year profit of passenger vehicle was big; this year profit of commercial vehicle was big. It was all dissimilar. Other people asked me why the profit of our group is such high. I said that, everybody knew, in our profession normal condition, there should be four minus one, for instance, if one vehicle is worthy 100,000, but sold 110,000, then it is not made 10,000, but made 2500.In the price the factory returns to the dealer is generally four points, the highest is six points. Therefore the outdoor shop is bigger, the profit margin is lower. But we are just opposite, this means the collectivized management pattern has brought the sustainable profit growth, studying the market trend, planning ahead of time is extremely important. Only depending on one shop is definitely impossible, we must use the way of collectivization.

In your opinion, president Pang, what is the biggest obstacle of being listed?
I do not think there is one, because none of Chinese car dealers is listed, we are the first one. Our biggest feature is that we are not born to be listed, listed or otherwise, we can develop healthy. Some companies are set up for being listed, we are not. We develop ourselves step by step. I start this business not just for making money; I want to devote myself to China’s car sales market, helping her find the right way. When I saw some large corporations crashed overnight, my heart feel really bad, I feel sad for them, but things happened. On the other hand, I have 24,000 employees who work for me, I have to take care of them.
Are there any preparations for being listed that haven’t done yet?
Everything is ready now, we are waiting for the application that reported in may 2008.
You have managed so many stores, are there any difficulties or challenges in management?
There are difficulties and challenges all the time, including capital, land, branding, business management, and corporation culture, all of these should be considered. There is an old Chinese saying: “Sale is easy, making friend is hard.” This is the foundation. There are so many stores, in Xinjiang, Inner Mongolia and Heilongjiang; I can’t watch them all the time, the only way is making our staff agree our ideology and culture. So the staff will do their work voluntarily, otherwise there is no way the company is developing. Therefore, manage a corporation is very hard, full of challenges.
About the seven billion for Subaru you talked about last time, can you tell us something about the distribution of the seven billion?
This depends primarily on the exchange rate of the Japanese currency. Our task for Subaru this year is to sell 35,000 cars. But, because of our large region, our brand development was also good, we decided to add the pressure, I am confident to achieve 40,000 cars.
President Pang, what is the purpose for the cooperation with Lotus?
Because I am the Vice President of Automobile Dealers Association of China, we have an obligation to do manufacturers cooperation work, I was touched by the entrepreneurial spirit of Lotus, and decided to try. I think the Lotus brand is a little behind of other brands currently, but in the future it should be able to catch up. The criterion we choose a brand for agency is not to see how good or bad the brand is but the how faithful to each other. I think what we are looking for is a long-term partner, that is my point. We can cover all the brands yet, many brands need us to explore, like BMW, Buick, Chevrolet, BYD and others. But what we did, we do it well.
What is the store growth number of this year?
We have specific department in charge of land buying and store building, our plan is more than 200 stores up to now. Our company calls this year “the combat year”, to buy land intensively, to build store intensively, to build brand intensively, to manage intensively, and to distribute funds intensively, only in such way, we can solve problems. For example, we bought 270 acres of land in Baotou, bought 200 acres of land in Huhehaote, we also have land in Erduosi, and we bought 400 acres of land in Zhangjiakou, we also have lots of land in Chengde, Tianjin, Shenyang and other cities.
Are there any risks in the case of such high land prices?
In fact, the local government gives us a lot of support and care. Besides, Also, buy land for stores individually would be very difficult, so we engage in large scale, reducing the risk.

I predict that in China, the Chinese distributor market will dramatically change in the next five years. Several major car dealership group will take 70% - 80% of the market share, the whole market will become more competitive, large group would be more stable. This is the general trend; we should grasp the chance and lead it. Manufacturers release is an inevitable trend, I know that many manufacturers have 100 stores per year rate of growth, such as Shanghai Volkswagen, only long-term cooperation, dealers can never grab manufacturers the right to speak, because to maintain credibility, will fight for the honor. I personally think that manufacturers should not be worried.

Which factor do you think is the key factor that led to the success of Power Diversity Automobile Trade Group?
Our definition of grouping is different from others, some thinks that owns eight of ten stores is called grouping, but the truth is not like that. Our definition of grouping including six aspects that I mentioned several years, three definitions, grouping is multi brands, multi regions, multi kinds. From behavior, grouping is Regional buyout, variety buyout, brand buyout. "Chung Yi Da" is only in Beijing, only sale cars, so I do not call it grouping.
Dealers have obligation for all consumers, and should establish a service system to all aspects. In the Automobile Association, most of the dealers are in import cars, only me in trucks. So grouping is absolutely right.
Do you have new plans of using grouping and regionalization in the future?
We have to put the limited resources, funds, talents, energy on the effective outbreak point. For example, we can put these on trucks this year because it sales good. I can do this well, I can catch the outbreak point every time. No matter how big the corporation is, we still face challenges and pressures, because resources are limited, and we should use them well.
Sometimes the brand agency must need to bear loneliness, pass the test. The sale of Subaru is not good at beginning, and then we have taken proper measures to make Subaru cars soon emerged. Came only after the hard business, as long as the product is good, dealers should seize the opportunity.

We are a multi-brand company, our brand system is very complex, constitute the beginning of steady development of the large group, we have internally competition, but the platform is stable, we strictly abide the car dealer responsibility