Nearly 5,000 4S Dealerships Exited Last Year, "Fuel Vehicle Continues to Shrink"! Over 80% of Dealers "Selling Cars at a Loss," Most Dissatisfied with Automakers in History

On March 18, the China Automobile Circulation Association released the “Development Report of China’s Automobile Circulation Industry 2025-2026” (hereinafter referred to as the “Report”). It shows that by the end of 2025, the scale of the 4S dealership network will be 32,432 stores, a 1.4% decrease from the previous year, with the decline narrowing compared to last year.

Image source: China Automobile Circulation Association

“Although the overall size of the 4S network is shrinking, there is structural differentiation within it. The traditional fuel vehicle 4S network continues to contract, while the new energy 4S network maintains an expansion trend,” said Lang Xuehong, Deputy Secretary-General of the China Automobile Circulation Association.

According to the “Report,” nearly 5,000 new 4S stores will be added in 2025, with about 56% of these belonging to new energy vehicle brands. Among the new additions, domestic brands account for 88%, while joint venture brands and luxury brands account for 7% and 5%, respectively. Of the nearly 5,000 4S stores that closed, domestic brands also hold a larger share, about 76%, with joint venture brands at around 15% and luxury brands at 9%. The closures and transfers of new energy vehicle brands are mainly due to network integration and brand termination.

Image source: China Automobile Circulation Association

Lang Xuehong stated that compared to the previous year, the autonomous brand 4S network continued to expand in 2025, reaching a total of 21,371 stores, a 1.1% increase, with autonomous brands accounting for 66% of the total 4S stores. The network sizes of joint venture and luxury brands declined, with joint venture brands totaling 7,304 stores, a 5.7% decrease, and luxury brands totaling 3,757 stores, a 5.8% decrease. The combined share of joint venture and luxury brands’ 4S stores is 34%.

Despite the introduction of multiple policies in 2025 to support and stabilize automobile consumption domestically, car dealers generally failed to meet their annual sales targets. Issues such as price inversion, losses in new car sales, narrowing profit margins, high inventory, high parts prices, bundling sales, and excessive authorized outlets in the same city have persisted or worsened.

According to a survey by the China Automobile Circulation Association on the survival status of auto dealers nationwide, in 2025, more than half of the dealers failed to meet their annual sales targets, a worse situation than in 2024. The target achievement rates vary significantly among autonomous, luxury, imported, and joint venture brands. Over 50% of dealers selling luxury, imported, and joint venture brands met their annual goals, while autonomous brands, due to generally aggressive targets, had the lowest achievement rates.

Notably, in 2025, the overall satisfaction score of auto dealers with OEMs dropped to 60.8 points, a historic low. Main reasons include overly high sales targets, price inversion, high inventory levels, expensive parts, bundled sales, and excessive authorized outlets in the same city, which intensify competition.

Additionally, the survey shows that in 2025, 81.9% of auto dealers experienced varying degrees of price inversion, with 51.5% facing a price inversion of over 15%. The China Automobile Circulation Association stated that severe price inversion would lead to increased losses in new car sales for dealers, eroding their profits.

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Reporter | Dong Tianyi

Editors | Duan Lian, Yu Tingting, Du Hengfeng

Proofreader | Cheng Peng

Cover image: Visual China (unrelated to the text)

| Daily Economic News nbdnews Original Article |

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(Editors: Wang Zhiqiang HF013)