"By collaborating with Cango, Hongren is benefiting from Cango’s nationwide business network and dramatically reducing the time it spends on car searches and logistics. More important, the Cango platform’s capacity for fronting car payment eases, to an enormous degree, the pressure short-term cash flow exerts on dealers and enhances car purchase efficiency, thus improving client experience and driving sales."
—— SHEN Xiaolin
Qinhuangdao Hongren Automobile Trading Co., Ltd.
Lulong County is located in northeast Hebei Province and counts as part of the city of Qinhuangdao. Nestling against Yan Mountain to the north and bordering on Bohai Sea to the south, the county measures 961km2 in total area and is rich in history and culture as well as agricultural products and resources.
Qinhuangdao Hongren Automobile Trading Co., Ltd. was built next to the main road leading into the county, and an unbroken row of bungalows constitutes its showroom measuring around 500m2. Dozens of cars are sold in an average month, and brands sold in the store include a wide range of domestic brands. For the sale of certain brands, cars are picked up from local 4S stores per prearrangement. And for the rest of the sales, orders are placed based on the needs of end users and cars are purchased from out of town, so as to ease the pressure for cash flow.
Owner of Hongren Automobile Trading, Shen Xiaolin goes by “Shen” and is a typical guy from north China. He is warm and friendly, and can never resist a good laugh. In 2003, he started running his own car repair shop. As profit dwindled for car repair, he ventured into car sales in 2010 and his store became the first one in the area to cover both car sales and car repair. Since then, Hongren Automobile Trading has grown into the largest auto trading store in the area offering comprehensive services.
It had not been easy expanding the store over the years, and Shen said that no one could fully comprehend it until he had experienced it himself. Being the sales outlet one level lower than 4S stores, auto trading stores normally pick up cars from 4S stores, which necessitates a relatively long cycle. Shen recalled that one time when it took more than twenty days for a client to receive his car after he had placed the order. “A client might want one specific model and we might not be able to get it whatever channel we try,” said Shen. “And sometimes we might find the exact car, but because the cycle is long and the client won’t wait, we will still lose his business.”
Cash flow is even more frustrating than the pickup cycle. Auto trading stores need to pay upfront for cars they pick up at 4S stores. In a peak season, if four or five orders are placed by clients around the same time, the auto trading store will have to pay 4S stores more than 100,000 yuan or even twice that amount to secure the cars. “All these years, I was borrowing from friends and family or pooling money in every other way to order cars,” said Shen. “I worried when I wasn’t selling a lot of cars, and I still worried when I was selling a lot of cars because I needed to find ways to front the car payment.”
Hongren Automobile Trading started collaborating with Cango in June 2017 and became one of more than 49,000 similar collaborators for Cango. Shen said frankly that the connection with Cango removed several long-time obstacles for him. He shared a real story. On a winter morning in 2017, a store associate received a call from a client who wanted to order an Axela. He immediately inquired in various auto dealer groups and on 4S channel networks and confirmed that the car was locally available. So Shen accepted the order and the client paid a deposit.
Shen assumed that it was a done deal, but then the car source called notifying him that the car had been sold. He already took the deposit and arranged with the client a time and place to deliver the car, but the car evaporated into thin air. Shen didn’t know what to do until he remembered the Cango platform which he had been collaborating with for a few months. “I figured it wouldn’t hurt to try,” said Shen. “So I clicked on Cango, and imagine my surprise when I found the car I was looking for. But it was in Xiamen, Fujian, and picking up the car would require traveling across China from the north to the south. I was planning to give up.”
Upon learning Shen’s needs, a Cango associate communicated them to the backend and contacted Cango’s Fujian office. The two parties soon confirmed that a Cango associate based in Xiamen could help pick up and inspect the car and that Cango could arrange the logistics in transporting the car to Qinhuangdao, Hebei. Shen had a glimpse of hope.
“At 10am, I followed instructions and submitted to the Cango platform the client’s information, car information and invoicing information,” recalled Shen. “In less than ten minutes, someone called me back to confirm approval. At noon on the same day, a Cango associate in Xiamen went to inspect the car at the designated 4S store and finished packing up the car for transportation by 2pm. And within one week, the car was successfully delivered to my client.”
Collaboration with Cango has also boosted the store’s sales. Prior to 2017, Hongren sold about 300 vehicles in an average year, whereas through collaboration with Cango, more than 400 vehicles were sold in 2018.
Having adopted the perspectives of small- and medium-sized auto dealers, the Cango platform provides them with one-stop and multidimensional services including car sourcing, fronting car payment, inspection, logistic arrangement for delivery and sales. By collaborating with Cango, Hongren is benefiting from Cango’s nationwide business network and dramatically reducing the time it spends on car searches and logistics. More important, the Cango platform’s capacity for fronting car payment eases, to an enormous degree, the pressure short-term cash flow exerts on dealers and enhances car purchase efficiency, thus improving client experience and driving sales.
During the interview, Shen recounted, in his unique northern accent, how he had faced and overcome one challenge after another as he made his way in the business world. He also said that to expand and strengthen a company, integrity is of utmost importance, and that the second most important thing is to constantly improve service quality so as to satisfy the clients.
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