Luxury automobile dealerships suffer profit decreases in China

With sales growth in China's automobile market decreasing, even luxury automobile dealerships suffering. According to a recent report appearing in the China Business News, Porsche China has come across some disagreements with its dealerships regarding funding. The report goes on to state that without an agreement, dealerships may temporarily refuse to ask for new vehicles to sell in January and refuse to pay Porsche CRM costs and other fees.

A representative from a Porsche dealership stated that profits at their outlets have decreased substantially over the last two years. The representative attributed this decline to economic factors, the recent anti-corruption policies’ influence on the luxury automobile market and Porsche’s stubborn market policies.

According to statistics, Porsche’s sales growth in China has been declining sharply. While Chinese sales growth of Porsche vehicles was 64.6 percent in 2011, it fell to 28 percent the following year and then less than 20 percent the next year. A total of 19,785 Porsche automobiles were sold over the first six months of this year, representing year-on-year growth of merely 8 percent. However, Porsche has remained committed to its mission of expanding its Chinese sales network, with its total dealerships growing from 48 outlets in 2012 to an estimated 80 outlets by the end of this year.