It has never witnessed before that 20% FAW Toyota’s dealerships in Chinese capital Beijing asked to abandon sales network of a joint-venture. Five 4S dealers out of the original twenty-four ones are reaching agreement with FAW Toyota in quitting sales network, who have been suffered a large amount of loss in the dealership cooperation as a result of the joint-venture’s irrationally fast expansion in dealerships.
One of the five dealers has shut down half month ago since there have been hardly consumers and maintenance business from the beginning of the year till now. Other four are still in half operation.
Currently monthly sales of one of the five dealers are seventeen or eighteen, a 90 percent steep drop compared that of three years ago or a more than 50 percent drop on a year-on-year basis. While all the other automakers have confronted the overall industrial recession with the dealers, FAW Toyota chose not to care for the adverse situation for dealerships.
Thus, dealers have been reduced to the situation of losing 50,000 or 60,000 yuan for selling one single Prado. In order to keep the loss as low as possible, dealers have managed not to sell vehicles.
FAW Toyota has expanded its dealerships to 523 units in China, 95 percent of them suffered with deficit and 10 percent are ready to resign cooperation due to the extremely high inventory.
