E-shopping discount cars: China’s luxury auto dealer and Alibaba to offer pricey wheels at online sale prices

Yongda teams up with Alibaba's Tmall to expand offerings with Chevrolet Epicas as the first to be available and at some 40 per cent less than their recommended retail price

PUBLISHED : Thursday, 06 August, 2015, 9:33am
UPDATED : Friday, 07 August, 2015, 2:17am

Yongda, a leading Chinese luxury auto service provider listed in Hong Kong, will sell cars online through Alibaba’s Tmall platform, a move that comes as the mainland fever for pricey wheels cools.

The two giants will allow customers across the nation to buy a car at a single price and pick it up at the nearest Yongda shop, the two companies announced on Wednesday.

Alibaba had 80 million online customers in a financial position to buy a car, while Yongda, also known as Yonda, had about 200 outlets selling more than 20 brands across the mainland, according to the companies. Customers can also have after-purchase services at the shop where they pick up the car.

Wang Zhigao, Yongda’s deputy board chairman, said online sales were a key innovation for the company as the car industry moves to embrace the internet.

Yongda, which specialises in top brands like Porsche, Land Rover and Cadillac, saw sales grow as much as 30 per cent annually for the past couple of years.

Despite a general slowdown of luxury car sales amid the central authorities’ anti-corruption campaign and the gyrations of the stock market, Wang was confident sales of pricier models will grow 10 per cent annually over the coming decade. He expects 15 per cent of sales to take place online.

“The major driving force in the future will be individual consumers – the growing middle class,” Wang told the South China Morning Post. “Growth [of luxury cars] is slowing down as the Chinese economy transforms, and I don’t think it will recover until at least half a year later.”

The first batch of cars made available through Tmall will be 4,000 Chevrolet Epica vehicles, priced at between 60,000 yuan (HK$74,800) and 70,000 yuan – 40 per cent less than the manufacturer’s recommended price.

More expensive models would follow, Wang said, declining to specify which brands.

Wang Licheng, Alibaba’s general manager of automobile business, said Tmall used to partner only with manufacturers and focused mostly on inexpensive cars, usually priced between 100,000 yuan and 150,000 yuan.

“Alibaba is often considered [a platform for] ordinary people, while Yongda is known for its luxury, so the cooperation of the two will bring a revolutionary change, which was unimaginable in the past,” he said.

Alibaba would also offer zero-interest loans to buyers depending on their previous credit record with Tmall and its sister platform, Taobao, he said. About 20 million users qualified for the loans, he said.

Unlike internet start-ups that invest heavily to build a customer base, Yongda’s move would have immediate results.

“I see steady revenue growth instead of big investment, as selling cars and [organising] repairs via online orders we realise immediate profits,” Wang said.

China remains the world’s largest car market, with more than 23 million units sold last year, a 7 per cent increase over 2013.

According to the National Bureau of Statistics, there were 105 cars for every 1,000 people in China, about an eighth of the level in the United States.