Deloitte Launches China Dealership Benchmarks

HONG KONG - Deloitte's Motor Industry Services (DMIS) group in Hong Kong has launched the industry's first China luxury and non-luxury operational performance benchmarks.

Mr Vincent Liew, CEO of the Asian operation of DMIS, said that although China's car imports increased by 53% in the first half of 2008, actual passenger car sales growth slowed to 6% in August and about 2% in September. This is the weakest level in two years, according to a survey conducted by China Economic Review Publishing.

"The 2008 growth forecast for the mainland auto market is 10%, down from the 2007 growth rate of 15%. Factors such as the recent increase in sales tax on large vehicles, the economic slow-down and increased brand competition mean dealers need to manage their dealerships effectively for long-term success. Deloitte's Motor Industry Services group is advising various dealerships on how to increase their operational performance by effectively managing the factors within their control," Mr Liew said.

For the recently published benchmark results, please visit:

• Luxury Segment: http://xprnnews.xfn.info/Deloitte/20081120/Luxury_Segment.htm

• Non-luxury Segment: http://xprnnews.xfn.info/Deloitte/20081120/Non_Luxury_segment.htm

"These figures represent 'best practice' as identified in the industry for a mature market and for dealerships across China. They represent the top 30% of dealerships, which are then crossed referenced with our experience and knowledge of the Chinese market," added Mr Liew.

"For example, our studies show that the top 30% luxury car dealerships in China can achieve 6% to 7% gross profit (GP) on new vehicle sales compared with 8% to 10% GP in a mature market. Similarly, the top 30% non-luxury car dealerships in China are able to achieve 3% to 6% new car GP while their counterparts in mature markets have managed to achieve 8% to 10% GP on new car sales," said Mr Liew.

(Nov 25, 2008)