36
The future of automotive sales in China
The future of automotive sales in China
Summary 3
Our approach 4
1. China’s automotive market and where it is headed 61.1 The Chinese automotive market in numbers 71.2 The automotive (r)evolution: A market that never stands still 8
2. Pressing issues and emerging opportunities 122.1 The shifting demands of Chinese consumers 132.2 The changing role of automotive dealerships in China 16
3. The road ahead towards future automotive sales in China 223.1 The challenges and opportunities of shifting to direct sales 233.2Afinancialevaluationofthedirectsalesmodel 263.3 A transformation roadmap for the future of automotive sales 32
4. Conclusion 34
Contents
Summary
The Chinese automotive market has been essential for the business of OEMs for more than a decade—and will be even more indispensable in the post-COVID era. Butgiventhefiercecompetition,thestrongpositionofthestate,andcustomers’quicklychangingdemands,OEMs must develop a precise understanding of what theyneedtothriveinthisquickly-evolvingmarket.
Basedonacombinationofinsightsfromcustomers,dealersandtopmanagement,thisstudyshowsthatthetimeisripetoradicallyre-thinkthewaycarsarebeing sold in China. A seamless integration of online andofflinechannels,combinedwithmarket-wideservicestandardsandtransparent,haggle-freeprices,iskeyforwinningoverChina’sconsumers.Thiswill notbeaneasyjob:Withseeminglyever-growing sales volumes and opposition from powerful dealer associations,establishedOEMsarefacingbarrierstoramping-uptheirdigitalcapabilitiesandradicallytransforming their sales model.
DrawingfromindustryinsightsandourAccentureprojectexperience,weseektoprovideanswerstotoday’spressingchallengesandcreateacompellingvision for the future of automotive sales in China. That vision involves direct sales from OEMs to consumersinawaythatalsointegratesandbenefitsthe dealer network.
Despitethecomplexitiesandrisksassociatedwithtransformingthesalesmodel,waitingisnotan option if OEMs and dealers want to survive the ongoing disruption.
• With only a minor decline in total sales and strong growth in the premium segment, the Chinese automotive market has shown an astonishingly fast recovery after the initial outbreak of COVID-19. More than 25 million vehicles sold in 2020 make China by far the largest, fastest growing and most profitable market in the world
• For many Original Equipment Manufacturers (OEMs), China accounts for up to 50% of their global sales. But with 400+ players, competition is fierce, and China’s consumers are tech-savvy and demanding
• To stand out, OEMs and dealers must envision a radically new way of selling cars that satisfies consumer demand for transparency, convenience and seamless experience
• For established players, change will not come easily—strong dealer associations oppose radical transformation, and the widely diverse Chinese market requires a carefully calibrated approach
• The only way for OEMs to continue to thrive in China is to take a bold step and smartly invest in direct customer interaction, meaning they must turn from being a wholesaler to acting as a retailer
The future of automotive sales in China starts now.
3
ConsumersWeaccessedaconsumerpaneltoreach1,050Chinesenewcarowners.Thesampleprovidesarepresentativedistributionacrossage,gender,incomeandothermetricstoaccountforpotentialdifferencesinneedsandpreferences.
Dealers WeusedanexpertpanelontheChineseautomotiveindustrytosurveydealershipinvestorsandgeneralmanagersfromdealershipsinChina.Wesoughtaholisticviewwitharepresentativedistributionacrossbrands,locations and dealer size.
In this study, we combine three different perspectives in our analysis of the future of automotive sales in China: 1. A survey of 1,050 Chinese consumers who recently bought a new car2. A survey of 250 Chinese automotive dealers3. In-depth interviews with 12 Chinese and international industry executives,
as well as experts on the Chinese automotive market
Our approach
Age groups
40%
40%
20% 18-29
30-49
50+ Municipality
Province
36%Less than 20,000 km
26%20,000-30,000 km
31%30,000-50,000 km
7%More than 50,000 km
Annual driving distance
July 2020 // N = 1050 (Consumer); Source: Accenture Research
Gender
51%49%
Male
Female
Residence
Annual household income
5%Less than 15,000 USD
48%15,000-49,000 USD
35%50,000-89,000 USD
13%90,000 USD or more
Autonomousregion >1%
66%34%
Brand focus
21%
25%8%
46%Chinese brands only
Tier 3
Tier 4
Tier 1
Tier 2Foreign brands onlyDisruptors only
Mixed
17%Large: >100M USD
54%Medium: 50-100M USD
29%Small: <50M USD
Dealer size by revenue Dealer size by employees
July 2020 // N = 250 (Dealer); Source: Accenture Research
Outlet location
31%Large: >150
50%Medium: 50-150
19 %Small: <50
45%
38%7%7%
4
Executives and experts Toaugmentourview,wetalkedtotopexecutivesofestablishedOEMs,newmarketplayers,third-partyproviders,andtechnologygiants.
Bernd PichlerRegional Director Asia PacificBentley Motors
Xavier ChardonVice PresidentSAIC-Volkswagen Sales Company
Daniel LescowVice President, Sales, Marketing & After-Salessmart Automobile
Dr. Johann E. WielandPresident & CEOBMW Brilliance Automotive
Raymond LeeManaging Director Greater ChinaSime Darby Motor Group
Fu QiangCo-Founder & ChairmanAi-Ways Cars
Li HongpengChief Business OfficerHyundai Motor Group (China)
AnonymousVice PresidentLeading Chinese Tech Company
Sean GreenSenior Vice President, Sales & MarketingBMW Brilliance Automotive
Huang RuiVice President & Head of NSC ChinaByton
AnonymousCEOChinese Investor Group
Morris GaoCMO & Head of Business Development Faraday Future
5
1. China’s automotive market and where it is headed
6
Despitetherecentrecessionthatwasspedupby theoutbreakoftheCOVID-19pandemic,Chinaisthebiggestautomotivemarketintheworld.Withatotal of25.76millionpassengerandcommercialvehiclessoldin20191,theChineseautomotivemarkethaslongbecomeacornerstoneofglobalOEMs’growthstrategies and essential for long-term business success. WesternOEMsthathaveestablishedafootholdbyformingjointventureswithChineseplayersnowheavilyrelyontheChinesemarket’sperformance,whichissettogrowevenmore.Withapenetrationrateofonlyaround19%,carownershipinChina,forinstance,isstillmuchlowerthaninGermany(59%) ortheUnitedStates(84%)(seeFigure1).
Sincetheendof2019,theCOVID-19pandemichasposedseriouschallengesforOEMsaroundtheworld,withChinabeingthefirstmajormarkettoimposeastrictlockdown.AtthepeakofthecrisisinGreaterChinainFebruary2020,carsaleshaddeclinedbyastaggering79%year-over-year(YoY),down88%fromDecember2019.ThistrendcontinuedintoMarch(-43%YoY),beforeChinabecamethefirstautomotivemarkettoenterastrongrecoverybeginningin April.2Infact,AprilsalesnumbersmarkthefirstYoYautomotivesalesgrowthsincearollbackoftaxbreaksinJuly2018endeddecadesofuninterruptedgrowth.3 A30%increaseincommercialvehiclesales,drivenbystrongdemandfrompostalanddeliveryservicesdueto the soaring e-commerce business and government support,contributedtothehikeinautomotivesales.
ForglobalOEMs,China’sswiftrecoveryledtoanevengreaterdependenceonthemarket.AlreadyinQ2/2019, longbeforetheCOVID-19pandemic,Chinaaloneaccountedfornearlyone-thirdofglobalsalesforthefivelargestcarmakersintheworld.ByQ2/2020,duringtheCOVID-19pandemic,thatnumberclimbedto45.2%onaverage.Thismeansthatforthelargestcarmakers,Chinaaloneaccountedfornearlyhalfofallvehiclessold worldwide.
AttherootofChina’sfasteconomicturnaroundaresubstantialsubsidies,taxexemptions,andfurthermeasuresthatChina’sauthoritiesintroducedinApril2020toboostautomotivesalespost-COVID-19.Delayingthe implementation of stricter emissions standards until January2021,reducingthevalue-addedtax(VAT)forusedcardealerstojust0.5%,andgivingfinancialinstitutions incentives to develop more attractive consumercreditserviceswithlowdownpaymentsandinterestratesarejustthreeofseveralcentralmeasures.Inaddition,localgovernmentsofatleastadozencities and provinces started offering cash subsidies ofasmuchas$1,400permodeltonewcarbuyers.
LookingatChina’sgenerallyswiftrecoveryfromtheCOVID-19pandemic,itappearsthatnoOEMcanaffordnottosellinChina.Butwithwellover400OEMsandan average of two to three new models being launched everyday,itisanextremelycrowdedplayingfield.ThemostpressingquestionsthatOEMsanddealersfaceishowtostandoutandcontinuetosellsuccessfully in the future. One thing is clear: The time is ripe to radicallyre-thinkthewaycarsarebeingsoldinChina.
Source: Accenture Research, Statista (2020)4
1,809
1,958 2,271
2,285 2,457
2,658
1,927
310
1,431
2,0702,194
2,300
2,112
2,186
2,5652,573
2,7792,873
0
500
1,000
1,500
2,000
2,500
3,000
Jul Aug Sept Oct2019 2020
Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec
Sale
s in
1.0
00
uni
ts -88%
+668%
1.1 The Chinese automotive market in numbers
China accounts for 1/2 of global sales for the five largest carmakers in Q2/2020(new vehicles only)
2-3 new vehiclesare being launched in China every day
Figure 1: Monthly automotive sales in China from July 2019 to December 2020
7
1.2 The automotive (r)evolution: A market that never stands still
IsChinatheEldoradoforautomotivesales?Notquite.Evenwithitsenormouspotential,theChineseautomotivemarketisextremelychallengingdueto itspolicies,competitivelandscapeandpowerfultechnologyplayers.
Inrecentyears,theChinesegovernmenthasheavilysupportedstateelectricvehicle(EV)brandsastheysoughttoformnationalchampionssuchasNIO,WeltmeisterandXpeng.MassiveinvestmentsallowedtheEVmarkettogrowbymorethan1,000%since2015.Themarketnowaccountsfor4.7%ofthetotalChineseautomotivemarket.Inthisway,Chinahasdevelopedintoahotbedforinnovationinnewenergyvehicles (NEVs) and grown to be the most important marketforthissub-segment,accountingformorethan half of the almost 2 million electric vehicles sold globallyin2019.
Withsixmodelsandmorethan250,000unitssoldannually,BYDisChina’slargestEVmanufacturer,followedbytheWesternOEMsTeslaandVolkswagen.Intotal,Chinahasmorethan500EVstartups.Many,however,havenotyetproducedmorethanaconceptcar.Bytheendof2019,only12EVstartupshadactuallybegunsellingvehiclesandjust10werepresentattheBeijingMotorShowinSeptember2020.Butstill,thesestartupshavemanagedtoshakeuptheindustry.
MorrisGao,ChiefMarketingOfficerandHeadofBusinessDevelopmentforFaradayFutureChina,explainsthatincontrasttomanyestablishedOEMs,startupshaveunderstoodearlyonthatsuperiorsoftwareandshortinnovationcyclesarekeysuccessfactors in the crowded Chinese automotive market.
Figure 2: Differentiation of different types of electric vehicles
1 in 2 electric vehiclessold globally are sold in China
New energy vehicles
Plug-In Hybrid Electric Vehicles (PHEV)Vehicle powered by a battery and
combustion engine
Fuel Cell Electric Vehicles (FCEV) Vehicle powered by a hydrogen
fuel cell
Battery Electric Vehicles (BEV)Vehicle exclusively powered
by a battery
60,253
49,714
29,51123,884 21,958 21,170 18,242 16,171 14,169
Chinese
11,43820,000
40,000
60,000
0
80,000
Vehi
cle
sale
s
NEV sales across China in H1/2020, by leading OEM
BYD TESLA VW SAIC GM GAC BAIC BMW NIO CHERY
International
Source: Accenture Research, Statista (2020)5
The future car will run on software. This requires a mind-shift from established OEMs. Currently, they do market research three years before product launch, and when the car is launched, they feel their job is done. But in China, customer preferences change every year. You need to keep working and continuously improve and refine the software to make sure that the car keeps on providing the best experience for customers year over year.
Morris GaoCMO & Head of Business Development Faraday Future
8
Figure 3: Market size of NEVs in China
Thosecompanieswithstrongandconfidentbackingbytheirinvestors,however,continuepursuingtheirambitiousplansforgrowth:WhilePolestaropened 20newstores,NIOcontinuouslyrampedupsalesoftheirES8andES6SUVsandcompleteda7-billion-yuan (1.1 billion USD) funding round from state-controlled investors.Alibaba-backedXpengalsocontinuestomakeheadlinesbylaunchingitsP7sportssedan,anEVwithadriving-rangeof706kilometers—thelongestcurrentlyavailableinChina.
GrowthintheChineseEVsegmentissettoaccelerate.By2025,weexpecttheoverallsalesvolumeforplug-inandfullyelectricvehiclestoreach6millionunitsperyear.Furthermore,fuelcellelectricvehicles(FCEVs)willbecomeincreasinglyrelevantby2025,withsalespotentiallyreaching50,000unitsorabout1%of totalforecastedNEVsalesperyear.Beyond2025,Chinaaspirestocreatetheworld’sleadingmarket forhydrogenfuelcellcars.Infact,planshavebeenannouncedtoput1millionFCEVsontheroadby2030,matchingthetargetsofCaliforniaandonlylaggingbehindSouthKorea’sambitionofgetting1.8million vehicles in circulation.6Astheworld’sleadingproducerofhydrogen,Chinahasabigadvantage intheracetofuelcellsupremacy.
Another differentiator for the Chinese market—besides itssize,policiesandcompetitivelandscape—isthestrongfootprintofdigitalbehemothslikeBaidu,Alibaba,and Tencent that seek to connect and integrate vehicles withtheirrespectiveecosystems.8Whilepushingthedevelopmentofautonomousdriving,BaiduisalsoprovidingtheoperatingsystemfortheconnectedvehiclesofseveralChineseOEMs.Meanwhile,Alibabahas introduced an in-car mini-app platform in cooperationwithXpeng,andTencentprovidesitsownin-vehicleinfotainmentsystemfocusedonvoice-operatedcommunication,socialmediaandshopping.
20% of cars sold in China in 2025 will be NEVs
2,000,000
4,000,000
0
3,000,000
1,000,000
5,000,000
6,000,000
2015 2016 2017 2018 2019 ... 2025
PHEV1-2M
BEV4-5M
FCEV50,000
Source: Accenture Research, Statista (2020)7
The few online success stories that were promoted heavily in China and around the world mainly sold limited editions and at little volume. This is easy to accomplish. The true challenge will be to integrate these online events with the offline dealer world and to turn this into an overall sustainable sales channel that fulfils customers’ needs.
CEOChinese Investor Group
9
ButChina’stechgiantshaveevengreaterambitions.Majorthird-partyplatformssuchasAutoHome,BitAuto,DouYin(TikTok)orDongCheDi,aswellasAlibaba’sTmall,haveansweredcustomers’callsforconvenienceand digitization. These brands are seeking to establish themselves as the go-to-place for used and new car buyers.Asinternetbusinesses,theseplatformsparticularlythrivedduringtheCOVID-19imposedrestrictionsonphysicaltransactions.AndOEMshavetakennotice.ManyOEMshavestartedtolivestreamcar sales events on social platforms to connect with consumers,andmorethan50brandsparticipatedinTmall’sDouble11shoppingcampaignin2020,securingatotalof330,000orders.BMWisevenenteringinto a large-scale strategic partnership with Alibaba to accelerate its digital transformation.
Anotherexample:TeslahadtheChineseonlinecelebrityWeiYapresentthebrand’smodels,theirspecsandtheir prices in an hour-long video stream which attracted4millionviewers.Chery,ontheotherhand,launcheditsnewTiggo7/7PROmodelexclusivelyvialivestream,generatingmorethan7,000salesleads,accordingtoofficialdata.
AndTmall,oneofChina’sbiggeste-commerceplatforms,isincreasinglyusedforautomotiveproductsandservices.Recently,itteamedupwithAutoHometopromoteselectedcarmodelsduring its818(18thofAugust)shoppingfestival,andalsobecametheexclusivesaleschannelforGreatWall’sNEVbrandORA.
E-Commerce
XPENG
Alipay – Taobao.com – AutoNavi In-car service ecosystem for smart vehicles built on Alibaba’s “super apps”
• Initial focus on driver-centric functions (navigation, travel assistant or driver condition monitoring) with gradual expansion to other mobility, lifestyle and infotainment functions• Open to third-party developers to launch more value-added services
Alibaba
Communication & social media
CHANGANHONDABMW
TAI3.0Tencent Auto Intelligence, in-vehicle infotainment with voice activated shopping
• Onboard app for user preferences • Onboard app powered by AI and big data to optimize and contextualize content• Incorporation of WeChat functionality and access to exclusive content services, including QQ Music and Ximalaya radio
Tencent
Autonomous driving – Apollo
HAVAL H6GEELYCHERYEXEED
DUER OS Developer platform for connected vehicle solutions and intelligent transportation
• Core functions voice assistance, navigation or entertainment • 50 mini apps, incl. e-commerce, online video, travel, after-sales• Integrates data flow between riders, vehicles, road and cloud
Baidu
Main focus
Collaborations
In-Car Software Platform
Mini Apps
Baidu, Alibaba, and Tencent are working to grow their footprint in China’s auto industry
Source: Accenture
Figure 4: Technology giants in the automotive industry
4 million viewerstuned in to see Chinese celebrity WeiYa promote Tesla’s models via livestream
Even though the smart brand is well established in China, as a new company we can act like a startup in many ways. When it comes to building a future-proof sales model, our opportunity is to accommodate for China’s very demanding customers, while at the same time providing a consistent brand experience. Plus, it needs to have the flexibility to withstand accelerated disruption in China.
Daniel LescowVice President Sales, Marketing & After-Salessmart Automobile Co., Ltd.
10
Whiletheseexamplesshowthatthird-partyplatformscan be valuable tools to increase sales and push digital salesjourneys,theyalsounderlineOEMs’dependencyon their large audiences and technological know-how. Notsurprisinglythen,relationsbetweenOEMsandthird-partyonlineplatformsarenotalwaysharmonious.InAugust2020,forexample,alegaldisputebetweenChinesee-commercegiantPinduoduoandTeslaescalated,becausetheformersoldTesla’sModel3sedanforalowerpricethanadvertisedinTesla’sownonlinestore.ThisjeopardizedtheOEM’sprice-matchguarantee.Inaddition,dealers’skepticismseemstobe growing. The CEO of a Chinese investor group said thatmanyoftheonlinesaleseventsorganizedbyOEMsande-commercegiantsmaynotbefinanciallysustainable.Already,moreandmoredealersareturningawayfromthelikesofAutoHome,Bitauto,orDongCheDi,whosefeeshavebecometoohighfor
dealers’slimmargins.Consideringthat42%ofdealersdidnotgenerateaprofitin2019,OEMsmayhavetolookformoreeffectivewaystoadvertiseonlinewhilesupporting their retail network. Subsidizing part of the feesonlineplatformschargetheirdealerscanonlybeafirststep.
Clearly,Chinaisauniquemarketforpilotingandperfecting the automotive sales strategies of the future. AsDanielLescow,VicePresidentSales,Marketing&After-SalesatSmartdescribes,OEMsneedtodevelopapreciseunderstandingofChinesecustomers’needs,aswellasdefineaclearstrategyforhowtonavigateandleverageChina’sdigitalecosystemtobuildafuture-proof sales model.
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2. Pressing issues and emerging opportunities
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Whilemorethan400mobilitybrandscompeteformarketshareinChina,morethan50%ofallnewcarssoldin2019wereproducedbythetopninebrands.Newcomers,inparticular,arestrugglingtoappealtoChineseconsumers.Infact,Chinesecustomers’brandloyaltyhasincreasedinrecentyears.Oursurveyshowed that brand image ranks as the number one reasonforchoosingamodel.Therefore,newcomersprimarilytargetfirst-timebuyerswithentry-levelmodelsatattractiveprices,orbyemphasizingtheirbrand’sperformance,aesthetics,connectivityorservicequality.
Some56%ofdriversagreethatonanemotionallevel,cars provide them with a sense of freedom. The COVID-19healthcrisisfurtheramplifiedthisneedforindependenttransportation,as80%ofrespondentshave become more cautious about their own and others’health.Withpeoplegrowingincreasinglyhesitanttousepublictransportation,especiallyinChina’smegacities,interestinbuyinganewcarhasshotup27%,whilesimultaneouslysufferingasmallerhit(down14%)fromcustomerswhodecidedagainst apurchaseduetoeconomicreasons.Newmobilityservices,suchascarsharing,faremuchbetterbecausetheyprovideuserswithlessexposuretoothertravelers.Some78%ofChinesecarownersreportthattheyalsousemobilityserviceslikeDidi(65%),DidaChuxing(31%)orCaocao(29%)atleastoccasionally,andalmostall(90%)wanttokeepusingtheminthefuture.
Regardingconsumers’preferredmodels,acceptanceandwillingnesstobuyanNEVcontinuestorise.Whilethegovernmentpushesthetargetofa25%NEVmarketshareby2025,68%ofsurveyedcarownersreporttheywouldliketobuyaNEVastheirnextvehicle.Consumerinterestisevenstrongerinthehigh-incomesegment,where81%ofcarownerswithahouseholdincome ofmorethan¥600,000(92,000USdollars)peryearareinterestedinbuyinganNEV.Eventheinterestofcarownersabove50years,whoaretypicallyamoretraditionalcustomersegment,ismorethantwiceashighasChina’stargetmarketshareforNEVs.
68% of consumerswould like to buy a NEV as their next vehicle
2.1 The shifting demands of Chinese consumers
When it comes to automotive sales, digital channels already play a very significant role for marketing and product communication. But up until now, transactions are still largely conducted offline. This is due to several reasons. First, a car’s price typically exceeds the 10k RMB threshold for online transactions. Second, there is no mature system to conduct financing or insurance transactions online. Third, there is no transparency in discounts and transaction prices, meaning that customers have to negotiate sales offline. And lastly, customers want to do a test drive offline before they buy the car.
Huang RuiVice President and Head of NSC China Byton
Impact of the COVID-19 pandemic on consumers in China
80% of consumershave become more worried about their health
85% of consumershave become more willing to shop online
July 2020 // N = 1050 (Consumer); Source: Accenture Research
While only 3% of consumers bought their last vehicle online, 14% want to buy their next one online
13% more consumersthan before intend to buy a new car in the wake of the COVID-19 crisis
-14% sales decline due to financial downturn +27% car sales driven by health concerns
13
Onaverage,consumersstarttheirbuyingjourneythree months before signing the paperwork—and morethan70%ofconsumersprefertodosoonline.Thisiswheretheycaneasilycomparepricesandproductspecifications,whileresearchingreviewsanduserinformation.DespiteChineseconsumers’generaltech-savviness,mostconsumers(77%)wanttoswitchtophysicalchannelstoclosethedeal,underlining thatdigitalalternativeswillmostlikelynotreplacethe“touchandfeel”experienceofdealerships.HuangRui,Byton’sVicePresidentandHeadofitsnationalsalescompanyinChina,explainswhy.Notonlydomanycustomerswishtodoatestdrivepriortopurchase,butthereisalsotheneedtonegotiatethefinalpriceandonlinepaymentishinderedbytechnicaland legal restrictions.
However,dealershavetoaccountforthefactthatconsumers entering their store are better connected andinformedthanever—afactthatFuQiang,co-FounderandChairmanofAi-WaysCars,stresses.AccordingtoFu,“Thegreatestproblemwithtraditionalautomotivesalesisthelackoftransparencyforthecustomer. In the value chain from OEM to dealer to customer,thecustomercomeslastandistheleastinformed.Thankfully,theinternetisputtinganendtothis.Customerscaneasilycomparepricesonline.”Moreover,theyexpectbusinessprocessestobeintegratedandefficient,forinstancewhenin-storeconversationsneedtocontinuedigitallyorwhenapurchasedvehicleistrackedthroughitsassembly anddeliveryacrosschannels.
It is imperative for OEMs and dealers to establish and manageaseamlesslyintegratedonlineandoffline salesjourneywithouttoday’schannelbreakdownsandclumsyworkarounds.Accordingly,XavierChardon,VicePresidentofSAIC-VW,callsforbalancebetweendigitaltouchpointsandthephysicalbusiness.AndBerndPichler,RegionalDirectorofBentleyinAsiaPacific,emphasizestheneedforbrandstodifferentiatethemselveswithexperiencesthatfocusonempathyand building trust. Chinese consumers are used to convenientandfast-pacedshoppingexperiencefromthevariouse-commerceplatformstheyuseevery day—andtheyexpectanequalifnotgreaterexperiencewhenbuyingsomethingasvaluableasanewcar.
2 in 3 consumerscollect competing offer from dealers of the same brand to get the best price
Onl
ine
Off
line
Configurecar
71%60%
12%
33% 38%
14%21%
22%32%
85%
59%51%
78% 77%
Test drive &experience
Compareproducts
Gatherinformation
Receiveoffer
Financinginformation
Closedeal
July 2020 // N = 1050 (Consumer); Source: Accenture Research; difference to 100% = “indifferent”
Figure 5: Consumer channel preference for customer journey steps
Price transparency is an issue. What is the reason that a customer visits two or three dealers before buying the car? It is because the customer does not trust the price at the first dealer is transparent enough.
Li HongpengChief Business Officer Hyundai Motor Group (China)
77% of consumersstill want to buy in a physical store
14
The behaviors and preferences of Chinese car owners are fueling the development of new sales models. Chineseconsumersvisitanaverageof2.5dealersbeforebuyingacar,with95%ofprospectivebuyersvisitingdealersofthesamebrand.Whilesomemaydosotocomparemodelsorservice,twointhreepeoplesurveyedsaidtheydosowiththemainintentionofcomparing prices and pitting dealers against each otherinnegotiation.LiHongpengofHyundaiMotorGroup(China)saidhethinkscustomersdo“nottrustthepriceatthefirstdealeristransparentenough.”Clearly,thisisputtingsignificantadditionalpressureon dealer margins while hurting the overall brand which almost no customer wants.
Infact,pricenegotiationsareregardedasanuisanceand have been shown to be the number one reason forcustomerdissatisfaction.Inoursurvey,fouroutoffiveChinesecustomerspreferredfixedtransactionprices over negotiations because it would help them feelmoreconfidentaboutthepurchasedecisionandhavegreatertrustinthesalesperson.Asaresult,bothdealersandOEMsarelookingforwaystoincreasepricetransparencyandstability.
Tosumup,whileChinesecustomersvaluestrongautomotivebrandsandareeagertoexplorethelatestinnovations,theyarealsochallengingOEMsanddealerstoinnovatethebuyingprocess,process,forinstance,bydemandingintegratedexperienceswhich
blurthelinebetweenonlineandofflinebuying.Seekingtocombinethebestofbothworlds,87%ofChinesecustomersarewillingtotryVRtechnology toaugmentthephysicalpurchasingexperience,and77%expressinterestinhavingtheirpurchasedvehicledeliveredcontactlesstotheirhome.However,while85%ofcustomershavebecomemorewillingtoshoponlineinthewakeofCOVID-19,theymaintainedtheirpreferenceforofflinetouchpointstowardstheendoftheautomotivesalesjourney.AsSAIC-VW’sXavierChardonexplains:“OurcustomerclinicsfortheID.4revealedthatcustomersareveryopenforanagentsalesmodel.”Thequestionis,areOEMsanddealersreadytoenteraneweraofsales?
Figure 6: Consumer pricing preferencesConsumer channel preference for customer journey steps
81%19%
64%
62%
42%
51%
43%
42%
July 2020 // N = 1050 (Consumer); Source: Accenture Research
Prefer price negotiations Prefer fixed & transparent prices
Ability to negotiate a better, lower price
Ability to compare negotiated prices across dealerships
Negotiations are a mandatory part of making a deal
Greater level of confidence in the closing of a deal
Ability to decide without being influenced by salesmen
Greater trust that salesmen provide the best information without trying to hard-sell
What differentiates an average sales experience from a superior one is the optimal mix and effective switching between process and empathy. Of course, we must employ the right technology along the sales journey and eliminate breaks between digital and physical channels. But our customers are looking for a person that they can build a relation with, who pays attention to detail, understands their needs and provides advice that can be trusted.
Bernd PichlerRegional Director Asia Pacific Bentley Motors
81% of customerssay that they would prefer fixed and transparent prices without the need for negotiations
15
Independent dealerships are the backbone of Chinese automotive retail. Dealers maintain a wide sphere of influence,includinginfluenceinpricing,retailmarketingandcustomerrelationshipmanagement.Sofar,theygenerate almost all new-car sales revenues for OEMs. Their economic relevance has given dealers an upper hand in disputes with OEMs who tried to implement changes to the current automotive sales model. A primeexampleisgivenbyAudi’sdisputewithFAWdealersin2017.WhenAudimadeplansforajointventurewithSAICpublicin2017,existingFAWdealersstartedaboycottthatledtoadeclineinAudi’sChinasalesbyalmost25%inthefirstquarterofthatyear.AudicouldonlysettlebygivingFAWdealersdeepconcessions on contracts and compensation of around4billioneuros.Sincethen,OEMshavebeencautious not to risk fallout with their dealers.
Still,Chinesedealersarefarfromfundamentallyrejectinginnovationsinautomotivesales.Infact,manydealershaverealizedthatcustomers’purchasepreferences are shifting online. Almost all of them (99%)usedigitaltoolstosupportmarketingandsales.Eighty-onepercentofdealersofferdigitaltestdrivesandappointmentbooking,78%allowfordigital
2.2 The changing role of automotive dealerships in China
1 in 3 dealersadmit new car sales are not profitable for them
OEMs have been moving online since 2018. Recently, the trend was amplified by COVID-19, during which we saw a boom of live broadcasting. Yet, this is just a way of showing the products, offline experience still remains a must element in the car purchase journey.
Vice President Leading Chinese Tech Co.
16
purchasingandpayment,andmorethan70%offerdirectdigitalinteraction.TheVicePresidentofaleadingChinesetechnologycompanysaidthatCOVID-19speduptheongoingtrendofmovingonline,withespeciallylarge dealerships (and their OEMs) diving into video chats(42%,e.g.viaDouYin)andlivestreamingofsalesevents(44%).However,Chinesedealerswillnotstopthere.Fifty-sixpercentsaiddigitizationandonlinepresencearethetoppriorityforinvestmentsinthenextthreetofiveyears.However,thereissignificantcostinvolved,andnotalldealerscandevelopthenecessarydigitalcapabilitiesontheirown.Therefore,38%ofdealersrelyonthird-partyplatforms—despitetheir general skepticism of platforms—because these third-partyofferingsareofhigherquality(44%)orarecheapertouse(43%)thanthetoolsprovidedbytheOEM.Goingforward,dealersareurgingtheirOEMs to up their game and provide better online options (40%)aswellasimprovetheoverallmulti-channelexperience(35%).However,withthehigherdemandforbetterdigitalsolutionssupportedbyOEMs,itis also imperative for dealers to be open to new solutions andseekclosecollaborationwithOEMs,e.g.interms of data sharing.
Dealers’requestsforOEMstostepinisnotnewbuthasintensifiedoverthecourseoftheCOVID-19crisis.Likemanyotherbusinessesacrossindustries,Chineseautomotive dealers have suffered from the fallout of thepandemic.Oursurveyfoundthattheaveragetimeittookdealerstosellastockvehicleincreasedby56%,from52to81daysduringthecrisis.Notsurprisingly,Chinesedealersexpecttheirturnovertodeclinebymorethan30%in2020,comparedtothepreviousyear.Andmarginsfromnewcarsaleshavebeenlowalready:Some42%ofdealersdidnotgenerateaprofitin2019.Oursurveyshowedthatathird(25-36%)ofdealerssaythatnewcarsalesarenotprofitableforthem. One reason for eroding margins is intra-brand competition,which29%ofdealersnameasoneofthebiggest threats to their business. This comes as no surpriseasdealersmentionthat69%oftheircustomersactivelyconfrontthemwithcompetingoffersfromdealers of the same brand.
Figure 7: The biggest threats as perceived by Chinese dealers
60%
57%
44%
44%
30%
29%
11%
July 2020 // N = 250 (Dealer); Source: Accenture Research
Competitors’ quality & pricing
Third-party platforms
Stricter environmental regulations
Long OEM production times
Alternative mobility services
Intra-brand competition
Economic downturn
What dealers perceive as the biggest threats to their business (multi select)
17
Moreover,third-partyplatformsaredisruptingtheclassicdealersalesjourney,propelledbytheincreasing fragmentation of customer touchpoints andconfluenceofdigitalandphysicalchannels.CustomersvisitAutoHomeorSouche.comtoresearchcarinformationandcustomeropinions,offeringanattractive advertisement platform for OEMs and dealers. The likes of JD and Tmall aim to position themselves as the initiators of a vehicle purchase byofferingaconveniententrypointofsalestoconsumers shopping for other products on their platform.Whiledesirableforconsumers,theincreasing loss of control over the customer interface puts pressure on dealers and OEMs alike. As platforms take advantage of the business potential and raise fees,57%ofdealersconsiderthemamajorthreat to their business.
ButmajorOEMsareconfidentthatevenintheface ofgrowingonlinesales,dealershaveastrongfutureaheadofthem.AsSeanGreen,SeniorVicePresidentSales&MarketingatBMW-Brilliance,pointsout,customersneedaphysicalplacefortestdrives,
serviceandrepairs.Andforthisreason,havingastrong network of successful dealers is a huge asset for established OEMs.
WiththeChineseeconomyrecoveringfromthepandemic,only11%considerafurthereconomicdownturn a substantial business risk. The fact that 44%ofdealersviewlongOEMproductiontimesasathreattotheirbusinessunderlinesexistingconsumerdemand.However,dealersneedtodevelopamindsetthatembraceschangeatthecustomerinterface, alsointhephysicalchannel,towinandretaincustomers in the future.
10%
< 25% decline 24%
25-40% decline 32%
40-55% decline 25%
> 55% decline 9%
No significant decline
74%
OEM loan 47%
Government bridge loan 35%
Direct business investment 33%
None of the above 7%
Payment deferred by OEM
Expected sales decline from COVID
Impact of the COVID-19 pandemic on dealers in China
Support measures received by dealers
July 2020 // N = 250 (Dealer); Source: Accenture Research
61%
OEM consolidation 58%
Price wars 53%
Higher pressure on dealers by OEMs 53%
Increasing online sales 52%
Tighter OEM-dealer collaboration
How will the industry change after COVID?
Average number of days to sell a stock vehicle
31%expected sales decline for 2020
52
81
65
Pre-COVID During COVID Post-COVID(expected)
Despite the trend towards online and direct sales, we see a strong future for our dealers. Customers will always need a physical place for test drives, service and repairs. Having a network of 600+ dealers in China is a huge asset for BMW.
Sean GreenSenior Vice President, Sales & MarketingBMW Brilliance Automotive Ltd
81% of dealersagree their business models need to change to be successful in the future
18
Chinesedealersknowthatinordertostayrelevant,theyneedtochangethewaytheyoperate.Inoursurvey,81%ofdealersstatedthattheybelievetheirbusiness model needs to change for them to continue tobesuccessful.Dealersknowmanyoftheircustomersare growing tired of the traditional sales process. However,comparingwhatdealerssayisthereasonfordissatisfactionandwhatcustomerssayisthereasonthat Chinese dealers still underestimate customer discontent,especiallyinofflinesteps.
Whiletheneedtonegotiatepricesisthenumberonedriverofcustomerdissatisfaction,dealersregarditasfarlessrelevant.Still,mostChinesedealers(63%)arenotopposedtotheideaoffixedandtransparentprices,adding to the chance that this customer demand willsoonbesatisfied.Ingeneral,alargenumberofChinesedealersareopentonewbusinessmodels,suchasautomotivesubscriptionsandsharing,and
theywelcomeinnovationsinsalesmodels.Arguably,themostimportantsalesinnovationiscurrentlytheintroductionofthedirectsalesmodel,which87%ofdealers have seen their OEMs pilot or rollout.
Thevastmajority(83%)ofdealersandparticularlylargeinvestorsareexpectingpositiveeffectsontheirbusinessfromsellingcarsforafixedcommission.Only11%areactivelyopposedtotheidea.Moreconcretely,Chinesedealersexpecttohavemore timetofocusoncustomers(43%)toreceivebettertargetedandpre-qualifiedleads(40%),andtoincurlowerexpensesandfinancialrisk(39%)inadirectsalesmodel.Inaddition,72%ofdealersreporttheywould welcome the OEM to take over larger parts of salesadministration,suchasstockmanagement,invoicing or credit checks.
63% of dealersdo not think fixed prices make selling cars more difficult
July 2020 // N = 1050 (Consumer), N = 250 (Dealer); Source: Accenture Research
Configuration options
Price negotiation
Financing options
Online purchase option
Online information
Sales consultant
Test drive
Final price
Delivery time
17%
12%
17%
12%10%
11%11%
7%14%
5%14%
8%12%
10%13%
10%11%
29%
Dealers Consumers
Figure 8: Drivers of dissatisfaction
83% of dealersexpect positive effects from selling cars for a fixed commission
19
There are also concerns that dealers bring up when asked about the direct sales model. These include potentiallylowersalesvolumesandreducedmotivationoftheirsalesconsultants.Dealerslargestconcern,however,isageneralskepticismifOEMstrulyhavethetechnological and operational know-how that is needed toorchestratesalesinamarketasdiverseChina’s,wherecustomerexpectationsandsalesjourneysdiffergreatlybetweenmegacitiesandruralareas.
Overall,weseethatChinesedealershaverecognizedtheneedfordigitalizationandareawareofcustomers’mostpressingpainpoints.Inaddition,theyareopentonewbusinessmodelsandseemanyadvantagesintheintroductionofdirectsalesmodels.Nevertheless,concernsthattheOEMcouldtakeawaythedealers’corebusinessremain,asSAIC-VW’sVicePresidentXavierChardonnotes.IfOEMswantdealerstoacceptthenewsalesmodels,theymustmaketheopportunitiesand challenges transparent in their communication with dealers.
43%
40%
39%
38%
28%
33%
35%
July 2020 // N = 250 (Dealer); Source: Accenture Research
More time to focus on customers’ needs
Better/more targeted marketing
Lower financial risk (cars owned by OEM)
No more intra-brand competition
Better customer service (multi-channel)
OEM coverage of IT & transformation costs
Greater national stock
Figure 9: Direct sales benefits as perceived by Chinese dealers
In general, bigger investors and dealers are looking at a new business model positively— right now they do not make money. But they are still a bit afraid that VW would take away the core business—that is absolutely not our intention, because we believe physical interaction is very important in the sales process.
Xavier ChardonVice PresidentSAIC-Volkswagen Sales Company
20
In reaction to new competition from EV-startups and digital players, OEMs are piloting new sales and business models. Up to 80% of dealers report that subscription, direct sales and sharing models are being piloted or already in roll-out. Notably, larger dealers are typically exposed to more initiatives (90%) than smaller ones (67%).
Dealers‘ exposure to new business models
July 2020 // N = 250 (Dealer); Source: Accenture Research
Familiarity of dealers with new sales models
Piloted or rolled out Possibly in the future Not known
80% 17%Subscription
79% 18%Direct sales
77% 21%Car sharing
21
3. The road ahead towards future automotive sales in China
22
3.1 The challenges and opportunities of shifting to direct sales
EnhancedbytheCOVID-19pandemic,OEMsandtheirdealershaveacceleratedtheirsearchformoreefficient waystosellcarsinChina.Infact,almostallOEMsandinvestorsthatweinterviewedacknowledgedthatit’stime to reinvent the automotive sales model. But is the marketreallyripeforaradicallynewwayofsellingcars?
ComparedtoWesternmarkets,Chinaisexperiencingextraordinarysalesgrowth.Andevenwithgrowth innewcarsalesstartingtoslow,dealershavejustbeguntotapintotheseeminglyendlessopportunitiesprovidedbytheusedcarandfinancingbusiness. HighprofitsandpowerfuloppositionfromdealerassociationsmakeitnearlyimpossibleforOEMstotakeaction.Yet,OEMsanddealersmustoverhaul theirsalesmodelnowiftheywanttostayrelevant.
Arguably,themostpromisingwayliesinmixingtraditionalelementsofsaleswithinnovativeones.GlobalbrandslikeBMWandMercedes-Benz,forexample,have started offering their customers an online digital showroomexperienceintegratedinaWeChatminiprogram.Theyalsoenablereal-timeinteractionthroughone-to-onevideocallswithproductexperts.Whilethepotentialcarbuyerexploresaproductin thevirtualshowroom,salespersonnelsharerelevantpictures and specs of the models.
Tesla has also started offering “contactless test drive”optionstocustomersinBeijingandShanghai.Customerscanmakeappointmentsbyphoneorsigne-agreements online. The sales assistant then unlocks thecarremotelytoavoidanydirectphysicalinteractionthroughout the process. Instructions and vehicle information are provided via in-car video content on Tesla’slargecenterscreen.
TotrulywintheraceforChina’sconsumers,however,OEMsmusttakeaboldstepandinvestsmartlyindirectengagementwiththeircustomers.Today,OEMsarebasicallyseparatedfromtheircustomersthroughthe indirect wholesale model. To establish a close relationshipandcreatethesalesexperiencethatChineseconsumersdemand,OEMsneedtore-gaincontrol over the customer interface and start selling tocustomersdirectly.
Thekeythusliesintheshiftfromindirectsalestodirectsales(alsocalledagencymodel),meaningthatOEMs must turn from wholesale to retail. This transition requiresputtingthecustomeratthecenterofalloperations,whichpresentsamajorparadigmshiftforOEMs.Itrequiresnotonlytechnologicalinnovationbutalsochangestoorganization,processesandessentiallyashiftinmindset.Forinstance,manyOEMsstillrelyoncustomerdataspreadacrossdifferentsystemsmanagedbydifferentdepartmentsoreventhedealer.Leaders,likeHyundai’sLiHongpeng,haveunderstoodthatcustomerdatamustbeunifiedandusedbytheOEMtosteertheentirenetwork.
Dealers,ontheotherhand,mustembracetheirrole asinvestorsandacceptthattomaximizereturnstheymust give up some of their business ownership and independence.Manydealersthatwesurveyedsupporttheideaofre-inventingtheautomotivesalesmodel,aslongastheyremainacentralpillar.Forexample,RaymondLee,ManagingDirectorGreaterChinaofSimeDarbyMotorGroup,iscertainthat“thecurrentautomotive sales model is coming to an end.” And the speedofinnovationaroundNEVs,togetherwiththerecentCOVID-19pandemic,havefurtherfueledcalls from dealers for OEMs to introduce reliable sales commissionsandreducethefinancialrisksassociatedwithstockownership,residualvaluesandpricing.
Dealers know that the business model will change, but they do not know how because they are afraid of losing their business, their property. They should rather think like investors, letting a central organization manage showrooms in a unified way. In that, direct sales has advantages, because the OEM can take the role of that central organization, taking control of staff, processes, prices and information.
Li HongpengChief Business Officer Hyundai Motor Group (China)
23
InChina,wehaveobservedthatthreearchetypesofdirectsalesmodelsareemerging,andeachhasadifferentlevelofdealerinvolvement:DigitalExclusives,4S-Transformations,and4S-Complements*.Whilereal-lifeexamplesmaycombineaspectsoftwoorallthreearchetypes,theirdifferentiationprovidesvaluable strategic orientation for OEMs.
Digital ExclusivedescribesOEMs’strategyto makeoneorafewselectedmodelsexclusivelyavailable through a dedicated app or platform. Existingindependent4Sdealershipsaretypicallypaid acommissiontodisplaythesemodelsandprovidecustomer consultation. That means customers can experiencethemodelsinstoresandtakethemfor testdrives.Forthepurchase,however,thedealerwillonlyreferthecustomertotheOEM’sexclusivedigitalchannel.Dependingontheback-endprocesses,thismodel can provide a strong uplift to OEM margins andcreateproductionandlogisticsefficiencies.
SAIC’sRoeweMarvelXisagoodexampleforthisarchetype.Despitethemodel’sstrugglesinadynamicpoliticalenvironmentaroundNEVs,SAIC’sapproach ofshowingthecaratexistingdealershipsandselling itexclusivelyviaanappprovedsuccessful.Ithasenabled SAIC to reduce lead times to start production and push manufacturing updates to the customer directly.Similarly,ChinesecarmakerGeelypartneredwith Alibaba-owned Souche.com to sell its model “LightKnight”ata5%discounted,non-negotiabletransaction price. The special edition model is not availablethroughGeely’s4Sdealernetwork.
4S-Transformation describes a more holistic but alsomorecomplexarchetypeofdirectsalesmodels.Here,theOEM’sexisting4Sdealershipsaretransformedintoagents,whoactonbehalfoftheOEM.Thisimplies atransitionfromtoday’smarginandbonussystemtoone where dealers (or agents) work for a set commission. Inreturn,theOEMassumesmuchoftheriskthattodaylieswiththedealers,suchasownershipofstockand demo cars.
Sofar,Chinahasnotseenanymajor4S-Transformationsyet,butEuropeanOEMshavecompellingexamples.BMW,forinstance,pilotedanagencymodelwithitsBMWisub-brandin19marketsfrom2012-2016.9 DaimlerlaunchedanagencyforitsfullrangeofmodelsandcustomergroupsinSouthAfricaandSweden,andisnowplanningtoextendtheagencymodeltofurtherEuropeanmarkets.Similarly,VolkswagenhasalsolauncheditsfamilyofIDmodelsinanagencymodelinGermany,withfurthermarketsandVW groupbrandslikelytofollow.10
InChina,severalasyetundisclosedOEMsaresaidtobecurrentlyexploringoptionsfortransformingtheirnetwork of independent 4S dealerships into a network of sales agents.
4S-ComplementdescribesanarchetypewhereOEMs launch new direct sales retail formats in additiontoexisting4Sdealerships.Specifically, OEMs have started launching high-street shops that augmenttheexisting,large-scalepremisesintheoutskirts of cities. The idea is to move sales to the consumer,whichinChinaisoftentimesinshoppingmalls. The new showrooms aim to attract customers byfocusingsolelyonthedisplay,experienceandsaleof a selected range of new premium models. After a purchase,customerscanrelyontheexisting4Sdealershipforaftersalesandservices,whichXavierChardon emphasizes will still be needed: “Unlike Tesla andNIO,wecannotonlyrelyoncityshowrooms.Wehave a much broader product portfolio and a bigger stockofcars.Therefore,westillneedbigshowroomsand repair capacities to present our whole range and to service our customers.” These 4S dealers are the onesthattypicallyinvestinthenewdowntownretaillocations and run operations for a commission. The cars,however,areownedbytheOEMwhosetsstandardsandpricestoensureconsistency.
The current automotive sales model is coming to an end. While I believe that the full transformation will still take at least 10 years, we assume that younger customers will develop a fundamentally different view on car purchases. They are looking for ways to buy online, meaning that in the longer-term test drives may be the only physical experience that is left. That is why we have embarked on various online digital initiatives such as digital showrooms and live streaming on WeChat and Tik Tok. We are even nurturing our sales consultants to be KOLs so that they can promote and sell cars on-line.
Raymond LeeManaging Director Greater ChinaSime Darby Motor Group
* The term “4S” refers to dealerships that offer sales, service, spare parts and surveys (i.e. customer feedback).
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Weexpect4S-ComplementstobeespeciallysuccessfulinChinesemegacities,whereretailrentsare often too high to operate traditional dealerships. Already,severalpilotscanbefoundinChina.InDecember2020,Volkswagenlauncheditsfirstdirectsalescitystore,the“ID.StoreX,”incooperationwithSAIC.11Plansaretoopenatotalof40ID.StoreXstoresin29Chinesecitiesoverthenextonetotwoyears.BesidesVolkswagen,severalotheryetundisclosedWesternpremiumandvolumeOEMsarepursuingplans to open 4S-Complements. Successful NEV startups,aswell,arerelyingonaverysimilarcombinationofself-ownedflagshipstoresandpartnerships with investors who provide aftersales andservice,accordingtoFuQuiang,Co-Founder andChairmanofAi-WaysCars.
However,whether4S-Complementswillprovetobesuccessfulremainstobeseen.Hyundai’sLiHongpeng,forexample,warnsthatcityshowroomsshouldratherbe viewed as a marketing or branding element than a viablesalesformat,because“eventually,cars—whicharenotaveryprofitableproduct—shouldnotbesoldin places with the highest rent.”
WhileDigitalExclusivestendtoworkbestwithalimitednumberofmodelsoraspilots,sellinglargervolumesdirectlytothecustomerrequiresadeeperintegrationofthephysicalretailnetwork.Whetherto
transform the retail network or to complement it dependsontheindividualOEM’snetworkstructure,history,andcompetitivelandscape.
Inthefollowingchapters,webreakdownthebusinesscase and show how OEMs can lead a successful transformation from indirect to direct sales. It is a highlycomplexandambitiouspathtocommitto,butwebelieveitistheonlyroadthatcanleadtoasuccessful future for automotive sales.
4S-Complement
SAIC Marvel X in China
+ Lower complexity (no dealer involvement)+ Production efficiencies through link between app and factory+ Direct customer access
– Cannibalization of indirect retail sales– Limited scalability for full portfolio– Limited dealer participation in OEM online sales
Mercedes-Benz in Sweden
+ Fixed prices and intra-brand efficiencies across all channels+ Cost synergies from centralization+ Steering of 3rd-party platforms and network stability (in economic crisis)
– High complexity (full transformation)– Significant IT investments and additional run costs (headcounts, IT)– OEM balance sheet extension
SAIC-VW in China
+ Direct sales focused retail formats, e.g., in city centers+ Independent dealers as investors in new formats+ Lab for innovative sales approaches
– High complexity (greenfield approach)– Major investment in new retail formats– Integration of existing 4S dealerships used for aftersales and service
Digital Exclusive
Source: Accenture
4S-TransformationArchetype
Example
Setup
Pros
Cons
Figure 10: Comparison of direct sales model archetypes
Similar to established OEMs, we are selling our cars via a network of partners alongside stores owned and operated directly by ourselves. But other than established OEMs, we do not set volume targets or exert stock pressure, and we own the customer contact. Our partners act as Maintenance point or as experience centers who combine traffic with community and delivery.
Fu QiangCo-Founder and ChairmanAi-Ways Cars
25
3.2 A financial evaluation of the direct sales model
Todeterminethefinancialbenefitsofadirectsalesstrategy,welookattwoperspectives:thatofthedealerandtheOEM.Fromthedealer’sperspective,wewouldadviseOEMstokeepdealers’interestsinmindandensurethatdealernetprofitremainsunchangedwhentransitioning from indirect to direct sales. This means thatwhilethedealer’sturnoverandcostswillchange,the bottom line should remain unaffected—a central demand from dealers to protect the investments theyhavemadeintheirbusinesses,SimeDarby’sRaymondLeesaid.
Inthetraditionalindirectsalesmodel,adealer’sgrossturnover from car sales is based on the margin and bonusnegotiatedwiththeOEM.Inaddition,dealersmayreceiveothercommissionssuchasfinancingkickbacks.Tomakesales,dealersoftengrantlargerebatesofupto25%(10-14%onaverage),eliminatingmostoftheirmargin.Furtherreductionsinpricemaycomefrommarketingandoperatingcosts,personnelexpenses,costsofstockownership(e.g.handling,financing,storage,insurance)andotheroverhead (e.g.property,administration,depreciation).
Inadirectsalesmodel,adealer’sgrossturnoverisdeterminedbyfixedremunerationandcertainbonuselements,which,insum,istypicallymuchlowerthantoday’smarginandbonus.Thedealer,however,incurs
muchlowercosts.Mostimportantly,rebatesaregrantedandcoveredbytheOEM.Additionally,theOEM takes over important functions such as owning andfinancingthestock,managingorders,invoicingandaccounting.Thisreducesthedealer’scostsbyupto2.5%.Ultimately,theremunerationneedstobesetatalevelatwhichthedealer’snetprofitremainsstable—usuallybetween5and8%intotal,basedonourprojectexperience.
The relationship between the traditional OEMs and investors requires close collaboration and reciprocity. Investors have been and still are opening new dealer locations to enable a broad presence and drive volume growth for OEMs. In return, OEMs need to keep the interest of investors in mind when defining new ways to interact with customers and sell cars.
Raymond LeeManaging Director Greater ChinaSime Darby Motor Group
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Tomanagethetransition,OEMsneedtodifferentiatebetween the one-time investment for the transformation andthesubsequentannualnetsavingstheywillgain.The former describes the immediate investment needed and the budget that must be allocated for the transformationproject.OnemajorcostdriverwillbetheadaptationofexistingITandthedevelopmentofnewITsystems,suchasonlinestores,pricing,invoicing,customerrelationshipmanagement(CRM),customerdatamanagement(CDM)orpointofsale(POS)systems.Further,OEMswillneedadedicatedfull-timeprojectteam,whichwilloftentimesbesupportedbyanexternalteamoflegal,ITandbusinessexperts.Lastly,OEMscanexpecttoincurcostsforthingslikedevelopingtrainingconcepts,trainingdealers,andsettingupsupportfunctions,amongothers.Theinitialinvestmentcosts for a market the size of China are estimated at between50and90milliondollars,dependingonthematurityandcomplexityofsystems,processreadiness,networkstructure,andthescopeofthetransformation,ourprojectexperienceshows.
TocalculatetheannualnetsavingsOEMscanachieve,wewillnextlookathowthecostofsaleswillchangewith the move from an indirect to a direct sales model. Wehaveseenthreepositivefinancialfactorsandthreenegativefinancialfactorsinourprojects,althoughtheresultingimpactisoverwhelminglypositive:
Intra-brand efficienciesByexertingpricecontrol,OEMscanreduceoreveneliminate competition among their brand dealers. Whennegotiationsbecomeathingofthepast*andpricesbecomechannel-agnostic,OEMscanenforcetransactionpriceswhicharetypically1-1.5%abovepricesinanindirectsalesmodel.AsHyundai’sLiHongpengputsit,“Priceconsistencyis[…]thecore of the sales management process.”
Online salesOnlyinadirectsalesmodelcanOEMscreateanattractiveonlineofferingthatisnotthwartedbydealersundercuttingonlineprices.Instead,dealersparticipateinonlinesalesbyreceivingahandlingfee(i.e. fee for handing over the car to the customer). As onlinesalesenableoverallleanersalesprocesses,withahandlingfeebelowtoday’sdealermarginandbonus,OEMsgenerateupto0.5%offurthersavings.
Cost synergies Inadirectsalesmodel,OEMstakeoverseveraltasksandresponsibilitiesfromdealers(e.g.invoicing,stockmanagement,stockownership),meaningthatcostsshift from the dealer to the OEM. Centralizing tasks cancreatesignificantcostsynergies,e.g.because theOEMwillprofitfromlowerfinancingcoststhanindividualdealers.Further,thecostreductiononthedealersideamountstoroughly1-1.5%,whichstillensuresdealernetprofitparitybetweensalesmodels.
Marketing & operations Because ownership of customer data is transferred fromdealerstotheOEM,itisonlylogicalthatmarketingspending,too,willshifttotheOEM.Inaddition,overalloperationalcostswillincrease,e.g.higherITruncosts.Insum,projectexperiencehasshownmarketingandoperationalcostswillgrowby0.5-1%.
Personnel costs AsOEM’sdomore,theywillneedmorepeople. Projectexperiencehasrepeatedlyshownafull-timeequivalent(FTE)increaseof10-15%inOEMsales-relateddepartments,resultinginupto0.5%additionalcost of sales.
Stock ownershipInthedirectsalesmodel,theOEMassumesstockownership until the car is sold to a customer. This impliesanincreaseinstockfinancingcosts.Moreover,expensesincurredinstoring,transportingandhandling the vehicle are no longer shared with the dealer.Thisincreasesthecostofsalesby1-1.5%.
What OEMs need to achieve is price consistency. This does not mean a price is the MSRP and it will never be adjusted, but it means that price adjustments need to be unified. Adjustments should be done in the whole market and not by single dealers. In fact, price consistency is a management element that we should consider the core of the sales management process.
Li HongpengChief Business Officer Hyundai Motor Group (China)
On average, dealer remuneration for new car sales amounts to
5-8% of the list price
* Find out more on the future of automotive pricing in our new study: Vehicle pricing in the new automotive reality
27
Direct sales business case
One-time invest ≈ $50-90m
$20-60mIT systems
central and local
$5-20mProject team≈ 30-100 FTE
$10-20mExternal support
≈ 10-30 FTE
$3-6mDealer training
concept development
Amortization after 1-3 years
No negative impact on dealer net profit
Dealer perspective
“How will my net profit change and what will I earn in a direct sales model?”
OEM perspective
“Which savings does a direct sales strategy generate and at which costs?”
Annual savings and costs ≈ $50-90m
Today’s CoS
Intra-brand efficiencies
Online sales
Costsynergies
Marketing & operations
Personnel costs
Stock ownership
Tomorrow’s CoS
2-4%p CoS savings potential 1-2%p additional CoS
-1.0-1.5%
-0.5-1.0%-1.0-1.5% +0.5-1.0% +0-0.5%
+1.0-1.5% 23-29%25-30%
-1-3%p in CoS
Rebate Commission
Annual savings and costs/change in compensation ≈ $0
TODAY TOMORROW
OEMtacticals
Bonus(qual. & quant.)
Fixed margin 10-12%
4-6%
1-4%
Margin & bonus
Direct costs & overhead
Retained margin
Shift of rebate to OEM
Shift of costs to OEM
Same dealer net profit
12-14%
5-7%
1-3% 1-3%5-8%
4-6%
Direct costs & overhead
Tomorrow’s retained margin
Source: Accenture
28
The COVID-19 crisis has increased interest in how an economicdownturnwouldlikelyaffectOEMs’anddealers’performancewhenoperatinginanindirectvs.adirectsalesmodel.Whilerealworldexperienceislimited,simulationshaverevealedastrikingresilienceof the direct sales model.
To understand how the direct sales model compares totoday’sindirectmodel,itisimportanttoacknowledgewhattypicallyhappensinacrisis:First,customerdemandandsalesvolumesplummet.Then,stocklevelswithinthenetworkincrease,leadingtolongerstockholdingperiods(i.e.thenumberofdaysfromproduction of a vehicle to its handover to a customer). Afterthat,asdealersdesperatelytrytoselltheirstock,theyofferhigherdiscounts,whichmeansthattransaction prices fall.
Withadirectsalesmodel,dealersprofittwofold:Forone,thecostsofstockownershiparetransferredtothe OEM. This means that dealers are relieved of high financingcosts.Additionally,dealersareprotectedfrom falling prices because their remuneration is typicallybasedonthelistpriceandnotthetransactionprice.Insum,thedirectsalesmodelcantherebymitigate much of the negative impact of an economic crisis on the dealer and provide an uplift in return on newcarsalesofupto28%.(Notethatdealers’businessinusedcars,aftersalesandserviceislargelyunaffectedbythetransitiontodirectsalesandthereforeisstillnegativelyimpactedinacrisis).
FortheOEM,thestrongfinancialbenefits(i.e.intra-brandefficiencies,onlinesalesandcostsynergies)ofthe direct sales model provide a certain buffer against economicdownturns.Butifacrisisbecomessystemicwith a prolonged and severe impact on sales volumes andprices,thefinancialbenefitswillbesubsumedbytheadditionalcostofsales(i.e.costsofstockownership,personnel,marketingandoperations).ThisiswhythepresidentandCEOofBMWBrilliance,Dr.JohannWieland,saysthatwhilethedirectsalesmodelcanstabilizedealermargins,OEMsmustmakesurenottotakeonmoreriskthentheycandigest.
However,asBerndPichler,Bentley’sRegionalDirector inAsia-Pacific,notes,theindirectsalesmodelisnotwithout risk for OEMs as well. During the COVID-19 pandemic,OEMsinvestedmassivelyintothenetworktopreventdealershipsfromfinancialcollapse.Theyofferedmeasuressuchasextendedpaymentterms,loansorevenequityinvestments.Suchsupportmechanisms would not be needed in a direct salesmodel,whichwouldcounterbalanceOEMs’additional costs.
Intheend,thelogicissimple:Thedirectsalesmodellowers competition between dealers of the same brand,whichenablesOEMstorealizehighertransactionprices.Moreover,itallowsOEMstotrulypushonlinesalesbyeliminatingthecannibalizationofsaleschannelsandensuringdealerparticipation.Lastly,astasksarecentralizedattheOEM-level,costsynergiescan be created. All of this results in a total margin improvementofupto2%.
Furthermore,OEMsregaincontroloverallsaleschannels,allowingthemtoharmonizedealers’salesactivities,optimizelogistics,manageresalevalues,anddirectlynegotiatetermsandconditionswiththird-partyplatforms.Finally,owningthecustomerinterfacemeansOEMscanstarttocreateagreat,consistentexperienceofthebrandacrossalltouchpoints,helpingtobuildtrulyengaging,life-longrelationshipsand to unlock future value pools.
All of these aspects provide an important advantage inastableeconomybutbecomeindispensablewhenthe going gets rough.
Direct sales models hold significant opportunities to stabilize dealers’ margins but should be focused on well selected use cases. The dealer network must remain intact and risk consolidation must be digestible for the OEM.
Dr. Johann E. WielandPresident & CEO BMW Brilliance Automotive Ltd.
Launching a direct sales model in China requires a one-time investment of
$50-90 million
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Direct sales in times of economic crisis
Crisis scenario: Reduction of sales volume and increase of rebate and stock age
Indirect salesNet turnover $ 2.840.879
Vehicle sales income $ 60.124.427
OEM purchase price $-50.203.897
Discount $ 7.695.927
Other income $ 616.275
Direct costs $ 1.506.670
Vehicle handover (PDI) $ 314.937
Vehicle handling, fuel, etc. $ 830.290
Other direct costs $ 361.443
Overhead expenses $ 2.111.665
HR $ 487.495
Marketing $ 300.622
Demo cars $ 14.733
Admin $ 60.453
Property, rent & insurance $ 541.662
Depreciation $ 14.857
Interest $ 691.843
Net profit before tax - $ 777.456
RoS new car sales -27,4%
Agency modelNet turnover $ 2.810.817
Fixed remuneration $ 1.593.297
Bonus $ 601.244
Discount –
Other income $ 616.275
Direct costs $ 1.506.670
Vehicle handover (PDI) $ 314.937
Vehicle handling, fuel, etc. $ 830.290
Other direct costs $ 361.443
Overhead expenses $ 1.282.020
HR $ 487.495
Marketing $ 162.498
Demo cars $ 7.800
Admin $ 67.708
Property, rent & insurance $ 541.662
Depreciation $ 14.857
Interest –
Net profit before tax $ 22.127
RoS new car Sales 0,8%
Baseline scenario: 2% return on new car sales
Sales volume-30% sales volume
decline over 3 month
Vehicle list price$32,500
Sales volume2,000 vehicles/year
Vehicle list price$32,500
Dealer rebate12%
Dealer rebate+13% (+1%)
Stock age70 days for BtS and
14 days for BtO
Stock age100 days for BtS (+30)
and 14 days for BtO
Up to 28% uplift in dealer return on new car sales
Source: Accenture
Introduction of remuneration
scheme
Rebate covered by OEM
Elimination of stock financing costs
30
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3.3 A transformation roadmap for the future of automotive sales
TheshifttodirectsalesrequiresOEMstosetupadedicatedprojectteamwithacarefullycalibratedgovernancestructureandclearresponsibilities.Whiledifferentarchetypesofdirectsaleswillrequirefocusondifferenttopics,ithasprovenbeneficialtostructurethetransformationprojectalongthefourareasofPMO,conceptwork,processdesignandITsystems.
Conceptsaredrawnforcustomer-facing,back-officeandcrossfunctionalbusinessareas.Theyanswerkeyquestionsregardingthefuturesalesmodeland,whencombined provide a holistic picture of the target state. Important deliverables include clear guidelines for agentremuneration,avolumesteeringplanandalegal review of all concepts.
The different concepts all feed into one holistic end-to-endprocessview,whichdetailstheentiresalesjourneyincludingallpossiblescenarios—forthecustomer,thedealer,theOEMandthirdparties.
Comparing this end-to-end process with the status quoenablesthedefinitionofpreciseITrequirements,ensuring the development of tools for a superior directsalesexperience.
Duetotheextensivescopeofadirectsalestransformation,OEMsfarewellbystartingasmallerpilotbeforetransformingtheentiresalesnetwork,ourprojectexperiencehasshown.Typically,pilotscanfocus on selected customer groups (e.g. private or commercialcustomers),productlines(e.g.ICEsorNEVs),ormarketregions.Thismakesthesalestransformationmorefeasibleandyieldsmeasurablesuccess.However,tomaximizediscountefficiencies,costsynergies,andtheintegrationofonlineandofflinechannels,afull-blownagencyrolloutisnecessary.
Figure 11: Considerations and deliverables for selected work packages
Remuneration
Online
Main questions• Should we maintain net profit parity?• Should remuneration be activity-based?• What is the share of fixed commission vs. variable bonus
(incl. bonus elements)?• How can fraud potential be minimized?• ...
Main questions• How to create a seamless online/offline customer journey?• How to partner with 3rd-party platforms?• Which vehicles will we sell online and at which prices?• ...
Legal
Order & Stock
Main questions• How to legally separate parallel sales models operated by one
retailer?• What will the agency contract look like?• Are directly sold products differentiated from products in the
indirect model?• ...
Main questions• How to optimize stock levels to minimize fixed capital?• How many demo cars are needed?• How to handle different stock types, incl. eventual remarketing?• ...
Key to-dos & deliverables• Acquire OEM license to sell vehicles• Orchestrate legal reviews for concepts• Draft agency contracts• Distribute agent contracts and get signatures from all
participating agents• ...
Key to-dos & deliverables• Set up regional stock pooling hubs to optimize availability and
lead time• Create a volume steering plan• Define high-end ordering process, incl. order cancellations• ...
Key to-dos & deliverables• Develop overall guidelines for future remuneration • Define and quantify remuneration elements• Define relevant remuneration processes in sales journey,
incl. pay-out triggers• ...
Key to-dos & deliverables• In-depth online sales journey assessment• Definition of online strategy and analysis of potential platform
partners• Definition and prioritization of online store requirements• ...
Source: Accenture
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Direct sales go/no-go,incl. archetype selection
Go-live
Phase 1 – Discovery
Phase 2 – Design
Project set-up
Business case development
Conceptual corner stones
ITfreeze
17+
Phase 5 –Hypercare & rollout
Pilot hypercare
Concept implementation
Phase 3 – Build
Phase 4 – Implementation
Month
Concept scaling
Business concepts V1
Transformation support & training
Phase
Activities IT scalingTesting, migration and cutoverIT development
Design of concepts, processes, and roles
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
Refinement and finalizationof concepts, processes, and roles
Project lead (& PMO)
Syst
em IT systems & landscape(encompasses all work packages)
Proc
ess
End-2-end processes view(encompasses all work packages)
Con
cept
Customer-facing
Back-office
Cross-functions
Business case & liquidity
• Business case from agent & OEM perspective
• Balance sheet & liquidity effects • Scenario analysis
Change management
• Communication of new sales model
• Training of retailers & OEM staff
• Go-Live Support
Legal • Agency contract • Legal standards and regulations
• Legal review for other work packages
Customer & marketing• CRM• Customer data• Lead & campaign
mgmt.
Offline• Customer journey
harmonization• Process requirements
Online• eCommerce strategy• Online store
alignment & requirements
Used car & aftersales• Interfaces to indirect
dealer business • Used car appraisal
integration
Order & stock• Order management • Logistics optimization• Demand planning
Lease & finance• Offering definition• Captive vs. non-
captive steering across channels
Invoice & billing• Direct invoicing• Accounting
integration• Process automation
Pricing• Pricing engine• Transaction price
definition• Campaigns/tacticals
steering
Remuneration• Remuneration model
& levels• Payout mechanism• Sales target setting
Functions & roles• New agent role
definition• New OEM
responsibilities• Resource ramp-up
Figure 13: Phased transformation approach
Figure 12: Typical direct sales transformation project setup
Withastrong,dedicatedteam,theshiftfromindirectto direct sales can be accomplished within 18 to 24 months.Beforestartingthetransformation,werecommendOEMscheckthegeneralfeasibilityandstudythemarketenvironmenttopinpointthebenefitsandrisksoftheproject,includinganevaluationoftheinvolvedstakeholders,suchasJVpartnersanddealergroups.Thentheycanpassthroughdiscovery,design,build,implementation,andthehyper-careandrolloutphasestosuccessfullybringthenewsalesmodeltolife.
Inordertoexcelinthedirectsalestransformation,OEMs must put the customer at the heart of all operations,somethingthatiseasiersaidthandone. ItrequiresOEMstoredefinetheirrolefrombeingamanufacturer to becoming a retailer. This is where the future of automotive sales in China lies.
Source: Accenture
Source: Accenture
33
Doing nothing is not an option. OEMs that fail to futureprooftheirsalesmodelsothatissatisfiesconsumers’demandsforatransparent,convenientandseamlessexperience,risklosingaround30%ofrevenuetonewcompetitorswithinthenext10to15years.12OnlyaboldparadigmshiftcanshieldOEMsfromimpendingdisruption:Theymustputthecustomer front and center.
Withpowerfulinvestorsandstrongdealerassociations,however,changemustofferbenefits toOEMsanddealersalike.Asthisstudyhasshown,implementinganagencymodelenablescarmakerstocreatetrulyseamlessonline-offlinejourneys,providetouchless sales that have become the norm during the COVID-19pandemic,andsatisfycustomerdemandsfortransparent,haggle-freeprices.Moreover,itsupportsdealersbyshiftingfinancialrisktotheOEM,ensuringthatOEMscanpreservethephysicalnetworkthatdifferentiates them from newcomers who do not have asimilargeographicalreach.Lastly,itprovidesOEMsand dealers with the means to protect the customer interfacebycentrallysteeringandleveragingthird-partyplayersformutualgain,anditsignificantlyimprovesalesmargins.Thereby,thedirectsalesmodelunlocksthestrategicandfinancialleversthatareneededtostayaheadofthetechnologicalinnovationcurve in China.
To be part of and steer the future of automotive sales in China, we recommend OEMs start with the following five actions:
1. Understand what your company needs to thrive in China, including consumer demands, dealer sentiment and competitors’ moves
2. Adopt a retailer’s mindset that puts the customer front and center
3. Uncover the organizational, technological and financial implications of a direct sales transformation by conducting a thorough feasibility analysis
4. Setup a dedicated project team to draft the direct sales transformation roadmap from early pilot to full-blown rollout
5. Engage with the dealer network to secure investor support and generate strong buy-in
4. ConclusionThe Chinese automotive market is crucial for automotive OEMs. Its size and innovation power make it so. But with 400+ OEMs in the market, winning the battle for the customer is hard. To stay ahead, OEMs must radically rethink their sales model. The traditional way of selling cars will soon be obsolete.
It’s time to act. Now.
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References1 Statista (2020): Car sales (passenger and commercial vehicles) in China from 2009 to 2019,
https://www.statista.com/statistics/233743/vehicle-sales-in-china/ 2 CAAM (2019-2020): Economic operation of the auto industry in August 2019 – August 2020,
http://www.caam.org.cn/chn/1/cate_3/con_5231797.html3 Financial Times (2020): China car sales notch first rise in almost 2 years,
https://www.ft.com/content/34e5759f-107c-4e8b-a372-7096d599c9fd 4 Statista (2020): Monthly automobile sales in China 2019-2021
https://www.statista.com/statistics/276899/automobile-sales-in-china-by-month/5 Statista (2020): Electric vehicle sales across China in 1st half of 2020, by leading original equipment manufacturer,
https://www.statista.com/statistics/976376/china-electric-vehicles-sales-by-oem/ 6 Green Tech Media (2019): China to Eliminate Subsidies for Hydrogen Fuel-Cell Cars: Report,
https://www.greentechmedia.com/articles/read/china-to-eliminate-subsidies-for-fuel-cell-cars 7 Statista (2020): Annual sales volume of new energy vehicles in China from 2011 to 2019, by type,
https://www.statista.com/statistics/425466/china-annual-new-energy-vehicle-sales-by-type/ 8 Technode (2019): Tencent joins the race and creates dedicated auto intelligence team,
https://technode.com/2019/06/10/tencent-new-mobility-department-iov/9 Accenture (2019): Direct. A New Way for OEMs to Thrive in Times of Disruption,
https://www.accenture.com/_acnmedia/PDF-108/Accenture-Study-The-Future-of-Automotive-Sales.pdf10 Financial Times (2020): Carmakers launch direct internet sales,
https://www.ft.com/content/6681b877-348b-486e-8149-aa9dc6bd7fa4 11 Reuters (2020): Volkswagen explores new sales model for electric models in China,
https://de.reuters.com/article/uk-volkswagen-electric-china-idUKKBN28J0CW 12 Accenture (2019): The Future of Automotive Sales. Pre-Release, C-Suite Insights,
https://www.accenture.com/_acnmedia/PDF-108/Accenture-Excerpt-OEM-Insights-Online.pdf
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Authors About Accenture
The ideas and information in this publication are theresultofmanymonthsofworkbynumerousAccentureexperts,whomadethisperspectiveon the future of automotive sales in China possible.
Axel SchmidtGlobalIndustrySectorLeadAutomotiveaxel.schmidt@accenture.com
Johannes TrenkaAccentureStrategy,CEO&[email protected]
Dr. Maximilian HoltgraveAccentureStrategy,CEO&[email protected]
Tobias BüchsenschützAccentureStrategy,CEO&[email protected]
Florian-Frederik DeutgenStrategy&Consulting,[email protected]
Beatrix FrischAccentureInteractive,[email protected]
Marcello TamiettiStrategy&[email protected]
JIAO Yang (Dave)Strategy&Consulting,[email protected]
TheauthorswishtothankDr.MarcusDemmelmair,LudwigGöbl,andJulienPicartfortheirvaluablecontributionstothisstudy.
This document is intended for general informational purposes only and does not take into account the reader’s specific circumstances, and may not reflect the most current developments. Accenture disclaims, to the fullest extent permitted by applicable law, any and all liability for the accuracy and completeness of the information in this presentation and for any acts or omissions made based on such information. Accenture does not provide legal, regulatory, audit, or tax advice. Readers are responsible for obtaining such advice from their own legal counsel or other licensed professionals. This document may contain descriptive references to trademarks that may be owned by others. The use of such trademarks herein is not an assertion of ownership of such trademarks by Accenture and is not intended to represent or imply the existence of an association between Accenture and the lawful owners of such trademarks.
