On November 21, the official WeChat account of the Fujian Consumer Council announced that it has recently noticed that several BMW 4S dealerships, including Fuzhou Zhongbao and Fujian Xingdebao, have suddenly closed their doors, leaving many car owners in difficult situations. These circumstances have resulted in car owners being unable to pick up their vehicles after placing orders, recover auto parts, or access after-sales services.
In response, the Fujian Consumer Council issued a consumer alert: Beware of the risks associated with “4S dealerships” suddenly shutting down.
Media investigations revealed that at Fujian Xingdebao, an employee indicated that car owners are unable to retrieve their stored items, and the complimentary maintenance services offered by the store are no longer available. Another car owner mentioned that he has over 3,000 yuan left on his recharge card but cannot withdraw it. Reportedly, this dealership had been experiencing financial difficulties for six months, started delaying salary payments in August, and began removing display vehicles gradually since early October.
On October 23, Beijing's first global BMW 5S dealership, Beijing Xingdebao, was reported to have closed. Similar to Beijing Xingdebao, Fuzhou Zhongbao and Fujian Xingdebao are linked to the G.A. Group, one of BMW's five major agents in China, which previously owned nine BMW 4S dealerships and five MINI showrooms.
On October 20 this year, due to poor management leading to a financial chain rupture, inability to redeem quality certificates for customers, and overdue payments to BMW and its affiliate companies, BMW officially terminated its dealership agreement with G.A. Group after a review by its management.
According to G.A. Group's mid-term report, revenue for the first half of 2024 is projected to be around 843 million Hong Kong dollars, a 17.22% year-on-year decline. Of this, automotive sales revenue is approximately 569 million Hong Kong dollars, down 19.9% year-on-year. The group experienced a loss of about 18.23 million Hong Kong dollars during this period, compared to a loss of approximately 3.784 million Hong Kong dollars in the same period last year, indicating a further escalation in losses this year.
Citing a recently departed employee from Fujian Xingdebao, a reporter from the First Financial pointed out that “the nine BMW 4S dealerships under G.A. Group are all facing a financial chain rupture, with employee salaries delayed by 2-3 months and new car deliveries postponed. At our store, every employee, from general staff to managers, has left, resulting in a cumulative loss exceeding 8 million yuan.”
The Fujian Consumer Council stated that the involved companies should genuinely assume primary responsibility, act swiftly, and communicate with consumers to clarify solutions and timelines for resolving the issues car owners face, including but not limited to returning stored parts and restoring after-sales services, ensuring the legal rights of consumers are adequately protected.
Fujian Consumer Council recommended that consumers take the following actions: gather all contracts, purchase receipts, payment records, and other documents signed with the 4S dealership for potential use in subsequent rights protection processes. It suggests that relevant regulatory bodies organize multi-party negotiation meetings involving the affected 4S dealerships, their suppliers, and consumer representatives. Additionally, regulatory authorities are encouraged to strengthen daily oversight, risk assessments, and enforcement in the automotive sales industry. For 4S dealerships experiencing financial chain ruptures or poor management, timely measures should be applied, and severe penalties should be imposed on any illegal activities.
Industry experts pointed out that the continuous closures of 4S dealerships largely stem from liquidity issues. The breakdown of the financial chain ultimately leads to the cessation of operations. Ensuring the financial safety of dealership chains has become a key topic in the automotive distribution industry. An emergency report submitted by the China Automobile Dealers Association to relevant departments indicated that current new car sales among dealerships are suffering from widespread losses, exacerbating deficits and financial chain risks, making it increasingly difficult to escape the survival crisis. The “price war” has led to severe losses for dealerships, where selling more results in greater losses, while also facing pressure from financing obligations and a lack of incoming revenue.
