Shanghai Buick

Automotive Industries, Nov, 2004 by John Peter

And what will it take to get you into a new Buick today, Mr. Chang?

Translate that into Chinese and you might just hear it on the floor of Yong Dah Buick, one of 13 dealerships in the Yong Dah group, one of 34 Buick-dealer groups in Shanghai.

Rina Rong is the marketing manager for this store and she explains to us, through an interpreter, what it's like to buy a Buick in Shanghai.

Rong says that while a few customers are walk-ins, most customers call ahead and make an appointment.

"A lot of them have an idea of what they want," Rong says, "and just come in to see the vehicles, not to talk."

Yong Dah will probably be one of several dealerships that they'll visit.

"They compare prices, showroom experience and after-sale service," Rong says. "If they choose us, it's because they have a good impression."

It's important for a dealer to be service oriented, helping buyers get vehicle tags and sign up for car insurance.

Rong says that while GM cars may be more expensive, GM dealerships offer better service. The showroom is open from 8:30 am to 7:30 pm every day and Yong Dah's service department is open 24 hours a day, 365 days a year. Rong says the store employs just over 200 people to cover all those hours of service.

Once the potential buyer chooses Yong Dah, they will come in and haggle price.

"If the customer is not committed," adds Rong, "they won't get into the haggling."

A majority of the dealership's sales are to businesses. They will usually send in a representative to do the deal. Individual buyers are often first-time car buyers and will bring in several family members and friends to help them seal a deal. An automobile is a major investment and they respect the opinions of their closest kin.

Yong Dah sells four models. The Buick Sail small sedan and wagon sell for between 78,800 RMB ($6,396) at the low end and 118,000 RMB ($9,676) fully loaded.

The MSRP on a mid-size Buick Excelle (a rebadged Daewoo Lacetti) ranges from 129,000 RMB ($10,578) to 179,000 RMB ($14,687). The Regal sedan and GL8 seven-passenger van top out at 336,000 RMB ($27,552).

Rong says that every sales person has some flexibility in price, but the sales manager always has the final say.

Most buyers pay for their vehicles in cash. The money comes from personal savings, or is borrowed from parents and relatives. Consider that the average yearly income of a Sail buyer is only 100,000 RMB ($8,200) you understand how big of an investment a car can be. Less than 5 percent of the buyers use credit. Financing in 2003 was at 15 percent, but last April, in an attempt to control the rapid economic growth, the government changed the financing laws to exclude many car buyers. Rong expects the number of credit users to increase when GMAC Shanghai starts offering credit on retail financing. They currently offer financing to wholesale buyers only.

The sales forecast for 2004 is 4,500 vehicles, up from 3,700 in 2003. Yong Dah had a great month in August, moving 15 vehicles a day. The dealership advertises in local newspapers and has an advertising budget of 1.6 million RMB ($131,000) in 2004.

A normal transaction takes about two hours. After a down payment is made, it usually takes about two days to prep the vehicle for pickup.

Vehicles come with a two-year 48,000-mile warranty and customers can opt to join the VIP service club which gets them a spot at the front of the line when the vehicle comes in for service. Rong says that Yong Dah has been number one in sales and customer satisfaction for many years and plans to stay there.

The dealership's motto is painted on the wall of the conference room in large letters that roughly translate, "To forever reach the goal of becoming the best in customer trust."

"Buying a car is a big investment," Rong says. "It represents lifestyle or status. It's a good experience."

John Peter is Editor-In-Chief of Automotive Industries.