Volkswagen Group (VW) said it planned to double its dealers across China in the next three years and enrich its product portfolio in China. But analysts warned Tuesday that the news may cause current dealers to be concerned about profit competition.
"Having new dealers in a local market may dilute the profits of the current ones, especially if the market is already saturated," Zeng Zhiling, an auto industry analyst with Shanghai-based research firm JD Power, told the Global Times Tuesday.
German automotive producer Volks-wagen Group announced Monday a plan to expand its sales network to some 3,000 dealers in China by the end of 2015, China's largest automotive B2B marketplace gasgoo.com reported Tuesday.
Volkswagen had some 1,590 dealers in China, its largest market, by the end of 2011.
The automaker also said it would offer a total of 76 models to Chinese consumers by 2015, including 33 completely locally manufactured and 43 imported models.
"The expansion of VW's sales network corresponds to its efforts to increase its production capacity over the past two years," said Zeng.
The German automotive giant built new plants in cities like Foshan of Guangdong Province and Yizheng of Jiangsu Province starting last year, with each plant expected to turn out 300,000 cars annually.
But higher production capacity does not necessarily mean more willing investors in building new shops, the analyst warned.
"Land-use costs are climbing and margins for running self-owned shops are falling amid the auto market slowdown," Zeng noted.
Landmark building should respect the public's feeling
Feedback
RSS
