BMW's First Xingdebao 5S Store Goes Bust Amid China’s Cut-Throat Auto Pricing
Wu Ziye
DATE:  Oct 28 2024
/ SOURCE:  Yicai
BMW's First Xingdebao 5S Store Goes Bust Amid China’s Cut-Throat Auto Pricing BMW's First Xingdebao 5S Store Goes Bust Amid China’s Cut-Throat Auto Pricing

(Yicai) Oct. 28 -- Beijing Xingdebao Automobile Sales and Service, the German car maker’s first 5S store in the world which offers second-hand car sales and financial services on top of the normal 4S dealer services, has become the latest casualty in China’s cut-throat vehicle market and shut its doors for the final time last week.

Xingdebao is no longer selling cars and has suspended its after-sales services, according to a notice posted on the dealer’s door last week. The Beijing-based company is actively seeking capital injections and other solutions to solve its financial crisis.

Xingdebao also recently lost one of its main backers. Last month, BMW terminated its dealer agreement with Singapore’s GA Group, previously one of the Munich-based company’s top five dealers in China and a shareholder in Xingdebao, citing poor management decisions that led to the insolvency.

The fierce price war in China’s auto sector has led to a sharp drop in the price of luxury cars and plunging sales, which has made it difficult for dealers of high-end brands such as Xingdebao to break even. Sales of luxury cars in China tumbled 8.5 percent in the first nine months from a year earlier to 1.9 million vehicles, according to data from the China Passenger Car Association.

Phone calls to Xingdebao are going unanswered and there are no more show autos on the exhibition floor. The shop has set up a counter where car owners and buyers can go to register any monies or services that they are owed by the store for possible future compensation.

A BMW owner told Yicai that although he managed to register, he will probably lose his six years of free maintenance and he is unlikely to be able to use his CNY2,000 (USD280) in-store spending voucher.

There are some buyers who put down deposits just before the store closed down, the person said. Now, not only can they not collect their vehicle, but their deposit has also not been returned.

Even Xingdebao’s own employees are registering their losses at the counter as some are owed two to three months in wages.

Editors: Tang Shihua, Kim Taylor

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Keywords:   BMW