Beijing BMW Dealer Xingdebao Collapses, World's First 5S Store Closes

Yong'ao Investment Group owns over 80 car brand outlets, representing luxury car brands such as Mercedes-Benz, BMW, and Jaguar. The image shows the new BMW M3 model. (Jin Mingguo/Dajiyuan)

[October 25, 2024] China's automotive industry's months-long price war has resulted in massive losses for car companies and dealers. Following the collapse of prominent Guangdong car dealer Yong'ao Group, BMW's first 5S dealership in Beijing, Xingdebao, has recently been revealed to be "abandoned."

According to a report by Financial界 on October 24, Beijing Xingdebao, located in the Chaoyang District, suddenly closed its doors, with a closure notice posted at the entrance.

The Xingdebao notice states, "Due to the overall economic environment, the company is currently facing severe financial pressure. To better protect the interests of customers and employees, the group is actively seeking either capital injection or management by other groups to address the current difficulties. BMW brand authorization was terminated on October 20, 2024, and the company has temporarily halted new car and after-sales services."

Some consumers have reported paying tens of thousands in deposits without receiving their cars or refunds, with previous store credits also rendered void.

One such consumer said, "I ordered a BMW i3 from Xingdebao in June this year. The contract stated I could pick up the car in late August, but the delivery kept getting delayed. I requested a deposit refund, and the store promised it would be refunded within a week. But instead, they disappeared."

Public records show that Beijing Xingdebao opened in June 2012, located within the East Fifth Ring in Chaoyang District, covering an area of 22,000 square meters with an investment of over 320 million yuan. It was the world's first authorized 5S dealership for BMW.

Reports indicate that as early as July, BMW dealer Xiamen Zhongbao faced delays in deliveries, attributed to poor management and a potential financial crisis, leading to an inability to deliver vehicle certificates pledged to banks.

On September 10, the Fuzhou Cangshan Branch of the Bank of China filed a "financial loan contract dispute" lawsuit against Xiamen Zhongbao in Fuzhou's Cangshan District Court.

Xiamen Zhongbao and the recently collapsed Beijing Xingdebao are closely related. Tianyancha records show that the shareholders of Beijing Xingdebao Automobile Sales and Service Co., Ltd. are Tianjin Tianbao Automobile Sales Service Co., Ltd. and Xiamen Zhongbao Automobile Co., Ltd., both of which link back to Beijing Zhongbao Excellence International Trade Co., Ltd. (referred to as Beijing Zhongbao).

A leaked document revealed that BMW would terminate its authorization for Beijing Zhongbao Excellence International Trade Co., Ltd. (G.A. Group) and its parent company on September 20, affecting nine BMW 4S stores, two BMW quick-service shops, and one urban showroom due to G.A. Group's contract breaches, serious customer complaints over certificate issues, and overdue payments to BMW and its affiliated companies.

According to Beijing Xingdebao’s announcement, the final termination date for BMW's authorization was later extended to October 20.

G.A. Group, based in Singapore, is one of BMW's five major dealers in China and also represents brands like Ferrari, Porsche, and Maserati across cities like Beijing, Harbin, Xiamen, and Fuzhou.

Under China’s electric vehicle price war, various car dealers, including BMW, have struggled, with many reports of dealer collapses. According to Daily Economic News, Guangdong’s well-known car dealer Yong’ao Investment Group Co., Ltd., closed in January due to a broken capital chain. The group operated over 80 car brand outlets, representing brands like Audi, Volkswagen, Mercedes-Benz, BMW, Land Rover, and Jaguar.

The China Automobile Dealers Association survey data shows that in 2023, over 60% of dealerships failed to meet their annual sales targets. Looking ahead to 2024, dealers expect even fiercer competition, with continued downward pressure on new car prices, high inventory burdens, tight finances, and low single-vehicle profits.

In reality, China's prolonged price war in the automotive sector has not brought expected market gains for foreign car companies operating in China. Instead, it has significantly eroded the value of these car brands. This year, luxury brands such as BMW, Mercedes-Benz, and Audi have opted out of the price war.

Editor: Li Jing