Zhongsheng a tale of life in the fast lane
Car dealer goes from strength to strength in 16 years, with the lucrative after-sales sector picking up slack when profit margins fall
It looked like an ordinary car dealership found anywhere on the mainland, with long glass windows showcasing the latest car models and a handful of neatly dressed agents waiting with their sales pitches.
But when that outlet - the mainland's first authorised Toyota dealership - opened in the port city of Dalian 16 years ago, it marked the birth of Zhongsheng group, now the biggest Hong Kong-listed car dealer by market value. The company aspires to double its annual turnover and become the mainland's biggest dealer by 2015. Besides Toyotas, Zhongsheng sells other brands, including Mercedes-Benz and Audi.
"When the outlet, then known as the 3S shop, opened in 1996 there was not much concept of private car ownership in China. All vehicles were owned by corporates and the government," chairman Huang Yi told the South China Morning Post. "But I opened it anyway as both Toyota and I believed it was only a matter of time before China would develop a retail market for individual auto buyers."
He was right.
In 2009, less than a decade after retail car sales became commonplace in China, the country over took the United States as the world's largest car market. In the five years to 2011, new car sales grew an average of 24 per cent a year. While growth has slowed, global carmakers believe China will remain the most prominent growth story for many years to come.
"Before 2000, all foreign brands were imported by wholesalers. Few people could afford a car due to their low consumption power and the hefty duty imposed on imported vehicles, which represented 150 per cent of the vehicle's price," Huang said.