80% of Store Sales and Profits Decline, Nearly Half of Dealers Suffer Losses, 4S Shops Strike Back at After-Sales… Stores Caught in a "Double Squeeze"?

AC Auto's inventory of the top 50 most discussed topics in 2025 found that new energy, insurance, repair monopoly, 4S store reshuffle, loss dilemma, technician shortage, survival of repair shops, and policies have become the annual keywords.

Key Data

The data, such as "a shortage of 820,000 new energy vehicle maintenance technicians" and "a 70% turnover rate of technicians leaving the industry," directly reflect the core bottleneck faced by the new energy vehicle aftermarket—talent shortage. As the number of new energy vehicles surges, the speed of training professional maintenance personnel is far behind market demand, which has become a key factor restricting industry development and the improvement of service quality.

The "over 30,000 4S shops" experiencing a wave of closures is the most direct evidence of the massive impact faced by the traditional 4S system in 2025. Under multiple pressures such as the impact of the direct sales model of new energy vehicles and declining profitability, the traditional dealership network is undergoing profound reshuffling and restructuring.

The three major insurers have underwritten "24.2 million" new energy vehicles but are still facing losses. This huge contradiction highlights that the insurance business for new energy vehicles is currently in an industry-wide predicament. It profoundly reflects the unequal game between insurance companies and manufacturers regarding pricing and claims data, which is a core contradiction that urgently needs to be addressed in the current new energy ecosystem.

In the context of the broader environment, let's review the survival status of core participants in the industry: 4S dealerships, repair shops, and beauty shops.

According to F6 data, the growth rate of entry visits to 4S shops is the worst, while quick repair and maintenance shops, as well as beauty shops, show strong market resilience. AC Automotive will conduct a brief review of the operating conditions of these three types of stores.

Chart: Year-on-Year Growth Rate Distribution of Different Types of Store Visits in the First Half of 2025

4S dealer counterattack after-sales

The survival situation of dealers has further deteriorated.

New car losses worsen, while after-sales, finance, and new energy advantages expand.

In 2024, nearly 50% of car dealers achieved their annual sales targets, an improvement from 27.3% the previous year. Among them, luxury brands performed slightly better in meeting their targets compared to joint venture and domestic brands. The reasons for this are twofold: on one hand, new policies effectively stimulated automotive demand; on the other hand, manufacturer support measures such as cash subsidies, relaxed assessment targets, and reduced sales target discounts alleviated dealer pressure. However, the number of dealers withdrawing from the network reached 4,419, indicating that the market situation for 4S dealer groups remains challenging.

In the first half of 2025, only 30% of dealers achieved their sales targets, a decline of 18% compared to 2024, indicating a further deterioration in the survival conditions of car dealers.

Chart: Dealer Sales Target Achievement (2023 vs. 2025H1)

The comparison of dealer profitability from 2022 to 2024 shows a continuous downward trend in the proportion of losses over the three years. In the first half of 2025, the proportion of car dealers experiencing losses rose to 52.6%, with nearly half of the dealers operating at a loss.

Graph: Profitability of Distributors from 2018 to H1 2025

In terms of revenue share, the price war remains intense, with an increase in both the number of discounted models and the extent of price reductions. The proportion of new vehicle revenue and profit has significantly declined, while the improvements in financial services, insurance, and after-sales have been more apparent.

Figure: Dealer Overall Profit Structure 2022-2025 H1

In response to poor profitability, dealers mainly focus on after-sales services, sharing some operating costs by renting out workshops and accepting maintenance and repairs for other brands. However, in terms of parts absorption rates, traditional brands have an advantage over new energy brands. Dealers are adopting a more open attitude to seek external cooperation, and there will be more collaboration opportunities in after-sales services, such as car wraps and light modifications.

The auto repair shop is caught in a "double squeeze."

Double decline in output/profit, price war/marketing war continues.

The losses from new cars at 4S stores have led to an unprecedented emphasis on after-sales service. On one hand, they are accelerating cooperation with new energy vehicle manufacturers, and on the other hand, they are increasing investments in services such as car coverings, washing and beautification, and bodywork painting. This has also, to some extent, encroached on the market share of independent after-sales service.

In the first half of 2025, a survey conducted by AC Auto on the operation of automotive service stores (sampling survey) showed that over 80% of independent aftermarket stores experienced a decline in both output value and profit. The main reasons for this were customers replacing old cars with new ones, price competition, and the diversion of business through new media channels. Price wars and marketing battles are still ongoing.

Graph: Performance of Automotive Service Stores in Terms of Output Value/Profit/Number of Vehicles Serviced in the First Half of 2025

In 2025, the customer traffic structure in automotive service stores is undergoing significant changes. The most significant factor driving current changes in store traffic is existing customers replacing their old cars with new ones, particularly new energy vehicles (NEVs). As the penetration rate of NEVs continues to rise and the vehicle replacement cycle for consumers gradually shortens, there is customer attrition as original customers replace their old cars, especially with NEVs.

Secondly, there is the price war. Price-sensitive customers are more easily attracted by short-term discounts, leading to customer diversion. Online platforms attract car owners to place orders online and receive in-store services through subsidies and package deals, gradually changing customer consumption paths, which has a dual impact of both drawing and diverting customers from traditional stores.

The enhanced after-sales service of 4S stores and the overtaking on curves in the video era pose challenges to many traditional stores.

Figure: Reasons for Changes in Store Traffic in the First Half of 2025

In response to market competition, many stores are enhancing their service capabilities (accounting for 34%) while increasing their investment in new energy and online marketing.

Figure: Store Response Strategies to Market Changes

In 2025, the customer flow structure of car service stores is shifting from "natural traffic" to "diversified drivers". Customer retention, pricing strategy, online channel layout, and content marketing have become important variables affecting the survival and development of stores.

AC Auto believes that stores should improve in the following four areas: first, strengthen the maintenance of old customers and awaken dormant customers; second, respond reasonably to price competition to avoid falling into a vicious cycle of low pricing; third, actively layout new media content on platforms like Douyin, accurately target audiences, and build store IP; finally, collaborate with e-commerce platforms to broaden traffic channels and enhance service conversion capabilities.

The car beauty shop is relatively resilient.

Is the beauty business a "lifesaver"?

AC Auto will release the "2025 Car Wrap and Film Store Research Report" during the summit on November 24-25. Before the official release, some key data on store operations will be shared.

Compared to 4S shops and auto service shops, the business situation of car film shops is more optimistic, with 60% of the shops showing stable or growing conditions. (It is worth noting that this survey result is consistent with the related business conditions of F6 beauty shops.)

Graph: 2025 Store Operations of Car Wrap Films

In terms of price, AC Auto conducted research from the perspectives of both car owners and stores. A price of 3999 yuan is seen as the end of market price competition, with nearly half of store owners believing that the price of mainstream basic car covers will be around 4000 yuan. However, the expected price for 2024 is around 6000 yuan—indicating that the price war for car covers is not over yet.

Diagram: The Price Floor of Basic Mainstream Car Covers in the Eyes of Store Owners

In terms of customer traffic, offline in-store users remain the core contributors to value, but the proportion of online traffic is increasing year by year. At the same time, brands and multi-channel customers are also empowering store operations. More and more brands are establishing headquarters live streaming rooms to assist franchise stores in brand strength, product strength, and marketing capabilities.

Figure: Customer Sources for Car Wrap Film Stores in 2025

In terms of marketing expenses, as short video platforms pass the window period (with the aftermarket sector developing relatively later than other industries), most stores have fallen into a marketing dilemma of "no traffic without investment." For individual stores, continuous investment results in a relatively low ROI. Therefore, compared to the data from 2024, stores in 2025 will control their monthly marketing budget to within 3,000 yuan.

Graph: Marketing Expenses for Car Wrap Stores in 2025