A Small Auto Dealer’s Survival Story

Date: 2020-07-29

"It is a trend to popularize cars in villages and towns with a great development prospect. To run a mom-and-pop store successfully, firstly, you should make reasonable profit and be honest to your customers. Secondly, you could cooperate with a big platform, like CANGO, from which you would have a strong supporting team and diversified auto financial products, and enjoy benefits. Lastly, to keep up what we have been doing."

—— WANG Liping, SUN Zhiguo

Shengtong Automobile Trading in Tianfanjie Town, Poyang County, Shangrao, Jiangxi Province

Located in Tianfanjie Town, Poyang County, Shangrao, Jiangxi Province, Shengtong Automobile Trading is a mom-and-pop store the main business of which is car sales. The 50m2 showroom can only house two cars and the other four cars are on display outside the store. Owner Sun Zhiguo is forty-three years old and from Heilongjiang, while co-owner Wang Liping is forty years old and from Jiangxi.

When we first met Sun Zhiguo, he was outside the store parking a car he had just picked up. He walked into the store in long strides and shouted out his greetings, “Don’t call me ‘Boss’. She (pointing at his wife) is the real boss, the legal person!” Also in the store, Wang Liping smilingly disputed his claim while skillfully wiping down a car and checking the car inside and out, which is something she does every morning after getting up.  

The couple have a boy and a girl who are going to school in Sun Zhiguo’s hometown of Daqing. Since they work in another province all year long, they don’t see the children often, but they can’t stop talking about them and get teary when they do so.

Sun Zhiguo and Wang Liping had moved around over the years, working at factories and offices and even running their own beauty salon. In late July 2017, with help from a relative, they came to Tianfanjie Town in Poyang County, Jiangxi Province, and opened an auto trading store. Tianfanjie Town is located in the heartland of the Changjiujing “Golden Triangle,” with Jiujing Expressway, Jinghu Highway, Potian Highway and Jiujingqu Railway which is under construction passing through and meeting in the town, thus connecting, from all directions, two provinces, three cities and five counties. The town sees a large volume of traffic, which has spawned a large number of auto repair and auto trading stores lining both sides of the main road, and Shengtong Automobile Trading is one of them. 

For the first two weeks or so after the store opened, no client visited this newcomer in town. The couple often fought about it. But for them, the store was everything they owned, and if it went down, their livelihood would be gone. So they had to grind their teeth and keep trying, including passing out pamphlets at neighboring villages, begging for referrals and hunting for leads online. Eventually they chanced upon, on WeChat, a driving school coach who was helping a student to buy a car. That’s how they sold their first car.

There are tens of thousands of mom-and-pop stores like Shengtong Automobile Trading in Cango’s network of auto dealers. Industry insiders estimated that there are more than 100,000 non-4S auto dealers in China with annual transaction totaling nine to ten million cars which accounts for approximately 35% of the total number of passenger cars sold in China every year. And small auto dealers contribute to an impressive percentage of the sales. 

As the Chinese automobile market gradually transforms from a market with increasing supply to one with supply stock, more cars are being sold through lower-tier channels. In other words, sales increase is being sought in the widespread third- and fourth-tier or even fifth- and sixth-tier cities, towns and villages. If non-4S auto dealers are the capillaries of Chinese automobile circulation, then small auto dealers are the most sensitive nerve endings on this link.

These small auto dealers can be found in counties, towns and villages everywhere in China. Most of them are mom-and-pop stores with street-facing storefronts, and their primary concern is cost control. Compared against 4S stores with strong support systems, they face a wide range of operational difficulties such as lack of manpower, car sources and funding, which is what they signed up for. At the same time, they enjoy advantages such as small investment, flexible operation and ease in adopting changes.   

Mom-and-pop stores work on brand effectiveness and purely rely on word of mouth from the clients, which Sun Zhiguo and Wang Liping have taken to heart. At the store, they have a clear division of labor. The wife, who is good at communicating, is responsible for taking orders, whereas the husband, who focuses on execution, is in charge of after-sales. In order to develop business sources, the store sells both new and used vehicles and both passenger cars and trucks, and its sales is accompanied by loans, insurances and after-sales services. In fact, the very first transaction at the store was collaboration with Cango on the sale of a personal vehicle through installment payment. As word spread about Shengtong Automobile Trading in the area, old clients started referring new clients to the store, and trust by the clients keeps the couple motivated at work.

“There’s this client who comes to us for something as small as fixing a loose screw,” said Sun Zhiguo with a resigned smile but a proud tone.

For the couple, there is division of labor both at work and in daily life. The wife does the laundry while the husband does the cooking. They are the only employees of the store. “We can get really busy,” said Sun Zhiguo. “There was this time when I didn’t sleep in my own bed for several days.” Wang Liping disclosed that they sold sixty-eight cars last year. As business improves, they hope to hire someone this year.

It gets really cold in winter in the town. To reduce overhead, Wang Liping will not turn on the heat if there is no client. At those times, Sun Zhiguo, a heavyset man of the Mong ethnic minority, will prepare a hand warmer for his wife without having to be reminded. If Sun Zhiguo gets delayed picking up a car from out of town, Wang Liping will get anxious waiting for him at the store. Sun Zhiguo’s lack of patience is compensated for by Wang Liping’s high EQ, and his caring attitude neutralizes her “nagging”. Chatting with the couple and seeing them making every effort to serve the clients, we felt that no business would be too difficult for them.

“We will keep up what we have been doing,” said Wang Liping.

“Yes, we will.” Sun Zhiguo looked at his wife and they nodded in agreement. Their voices were gentle but firm.

As the couple make their way in the world hand in hand, Cango will continue supporting and helping them so that their small business will not be difficult business.