Money

Dealer's business hit hard by recall

By Wang Chao (China Daily)
Updated: 2010-03-03 10:34

Gong Jianzhong has a lot of time on his hands these days. While he used to be busy each day negotiating purchases with consumers, he now gets to sit in his office for longer than he would like, reading newspapers and surfing the Internet.

"The Toyota recalls have hit sales hard," Gong sighed. "Recently, fewer people have been asking about Toyota SUVs."

The 27-year-old, from Liaoning province, is the sales manager at a car store in the Yayuncun Automobile Exchange Market, specializing in Toyota SUVs. He has been involved in the business for five years.

"People are not that loyal to a certain brand; now the reputation of Toyota has been damaged, they are all switching to other brands," he said.

Among Gong's customers are many rich mine owners, from Shanxi, Shaanxi and Inner Mongolia, who are prepared to spend more than one million yuan on an SUV. Toyota SUVs used to be their first choice.

Vehicles cost between 800,000 yuan and 1.5 million yuan.

"Before the recall, we could sell more than 10 SUVs each month," he said.

"The Toyota RAV4 used to be one of the most popular SUVs on the market; it even got the nickname 'Little Princess'. At that time, dealers could easily sell it, charging an additional 10,000 yuan, but now, even when we are selling it at cost price, nobody is asking about it."

As sales manager, part of Gong's work used to involve arranging for imported cars to be picked up by trailer from Tianjin and Shanghai.

With his stock turnover now almost stagnant, he is not picking up new cars nearly as often.

After large-scale recalls of Toyota, even rock-bottom prices are not drawing customers back.

"We do have people asking about Toyota SUVs now but they have stopped buying them," Gong said.

"Most of them are expecting a big sale from Toyota after this incident."

There are no fixed prices in the store, so the sellers' ability to negotiate is paramount.

Gong's salary is made up of two components: basic pay and bonus. His bonus is decided upon by his performance.

"If my performance is good enough, I can earn up to 10,000 yuan a month; but when times are bad, I only make enough to cover my living expenses," he said.

He said this month's bonus is not likely to be big.

"The best time to sell cars has long gone," Gong said. "In 2004, it was so easy to make a fortune by selling cars. The price was not as transparent as today since the Internet was not as prevalent, consumers would accept almost any price sellers charged."