SAIC Audi’s channel “secret war” is over, but what exactly is the so-called innovative business model?

On February 23, SAIC Group, Audi, and China FAW jointly announced a consensus on future sales and service cooperation: SAIC Audi will build an innovative business model, and its products will be sold by the existing Audi investor network and provide after-sales services.

The service relies on Audi's existing network.

At this point, the four-year channel game triggered by Audi's original dealer system has come to an end.

So what is this "innovative business model"? It has attracted the attention of the industry.

Based on the common understanding reached by the three parties, SAIC Audi may use investors other than existing Audi investors in its channels. However, the existing Audi investor grid layout is mainly a 4S store model and still relies on 4S.

Store model sales cannot be called an "innovative business model."

From the 2019 Annual General Meeting of Shareholders held by SAIC Group in June this year, chairman Chen Hongbiao said that "SAIC Audi's marketing channels will be promoted online and offline simultaneously." It can be seen that SAIC Audi's "innovative business model" must come from online

This may be something that the FAW Audi dealership network cannot provide.

So what’s online?

SAIC-Volkswagen stated in this tripartite awareness that SAIC-Audi is committed to changing the way of communication and interaction between brands and consumers, breaking down information barriers in marketing, sales, after-sales, service and other aspects to create a more convenient and trustworthy

And exclusive physical e-commerce ecological experience.

Judging from the current new forces and various innovative models, online direct sales methods are most likely: such as joint ventures with JD.com or similar e-commerce platforms, or self-built mall platforms, etc., to split the functions of 4S stores and let them

It does not undertake sales tasks or financial financing functions. It only provides services and uses related service fees (such as door-to-door test rides, door-to-door delivery, door-to-door maintenance, etc., settled with SAIC Audi) as income.

In this way, SAIC Audi can completely transform from a manufacturer into the role of a dealer, facing users directly, and through online direct sales, it can sell products directly at a fixed price, and users no longer have to worry about bargaining.

In this way, there are no middlemen to make profit, and at the same time, inventory costs, financial expenses, store rents, and marketing expenses are reduced, and the profits are ultimately passed on to users.

However, this kind of advanced channel change will inevitably affect the income of existing Audi dealers, making them small or even unprofitable. This is not in line with the consensus reached by the three parties for this deal.

Therefore, this online direct sales method is likely to be implemented conditionally and will not completely replace the traditional offline model.

FAW Audi also issued a statement saying that both China FAW and Audi shareholders will accelerate the upgrade of the FAW Audi investor network to ensure that all future Audi models in China will be provided with sales related services and after-sales services through the current FAW-Volkswagen Audi investor network

management work.

From this point of view, the 4S store model in the existing Audi investor network will still be retained, but a new offline network will be built, or an experience center model will be invested and built, and the service will still be provided by the old network.

The above is just a bold speculation by Auto Classic on SAIC Audi’s innovative channel model based on the current consumption environment and consumption patterns. Can the three or even four parties (including existing Audi investors) really implement it in this way, especially without affecting the brand value and disrupting the market?

Under the market price system, we have to wait and see how the benefits will be distributed.

This article comes from the author of Autohome Chejiahao and does not represent the views and positions of Autohome.