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How to survive in the face of "shuffle" car dealers?
After the challenging "Black May" that swept through the Chinese auto market, many dealers found themselves struggling with a significant psychological gap. Recently, the automotive industry has once again formed a "price alliance," signaling that a major transformation in the distribution channels is on the horizon. As this reshuffle unfolds, how can dealers survive and thrive in such a competitive environment?
The author believes that the core issue for dealers is whether they can compete in the auto market in a healthy and sustainable way. However, currently, most dealers lack the strength and capability to do so. For years, dealers have been overly dependent on manufacturers and the market, much like animals in a zoo who are well-cared for but never truly prepared for the wild.
When faced with sudden and fierce competition, these dealers often feel powerless and unsure of how to protect themselves or even survive. The key to overcoming this challenge lies in strengthening their internal capabilities—training, improving skills, and building a solid foundation. To "save themselves," dealers must maintain a certain level of sales performance, build a strong brand reputation, and ensure a steady flow of maintenance and service.
Currently, dealers operate largely under the guidance of manufacturers, who still hold the dominant position in the relationship. Manufacturers dictate marketing strategies, sales activities, brand development, customer service, and market management. In theory, dealers should have the best understanding of local markets, consumer behavior, policies, and competition. Yet, in practice, they remain in a subordinate role.
Take, for example, the fact that manufacturers invest heavily in market research, while dealers rarely take initiative to study their own local environments. They also lack dedicated marketing teams and professional talent, which limits their ability to develop deep market insights or create effective strategies. As a result, they end up following manufacturer instructions without question.
Most dealers today function more like passive "sitting merchants" rather than active distributors. A true dealer should excel in four key areas: sales force, product knowledge, market understanding, and service quality.
1. **Sales Force**: The ability of sales staff to engage customers and convert interest into purchases. A good dealer should have skilled salespeople, a strong management system, and an effective reward structure. Unfortunately, many dealers still rely on waiting for customers rather than actively selling.
2. **Product Power**: Understanding of the product, its technology, and the competitive landscape. In the past, salespeople lacked real expertise, often being less knowledgeable about the car than the buyers themselves. This gap still exists in many dealerships.
3. **Market Power**: A deep understanding of local consumers, business circles, and competition. Most dealers rely on experience rather than systematic research, limiting their ability to build a strong market presence.
4. **Serviceability**: With increasing competition in new car sales, after-sales service becomes crucial. Dealers must encourage regular maintenance visits, as customer retention is essential for long-term survival. Research shows that many customers switch to independent repair shops after the warranty period, highlighting the need for better service strategies.
To succeed, dealers must focus on building these four pillars—sales, product, market, and service. Only then can they increase sales, enhance brand awareness, and build lasting customer loyalty. In the face of the upcoming "shuffle," it will be a battle of these four forces. Those who master them will stand out and secure their future in the evolving automotive landscape.
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