Full of depression, a confused account, with passionate words in front and tears behind.

A few days ago, I attended a party in the circle, and all the investors in the auto authorized stores were a little worried. Since 2020, the survival pressure that this industry has faced is evident to all.

In 2024, more than 8000 4S stores have closed down, and another 10000 may be eliminated in the next 5 years. Where have their after-sales customers gone? 》In this article, it was predicted that 'this wave of 4S store closures may not stabilize until 2028, by which time only half of the 4S stores may be able to survive'.

In the next few years, at least 10000 or more 4S stores will have to go bankrupt. Nowadays, the concept of 'leftover kings' is not just talk.

01. The Golden Age and Survival Crisis of 4S Industry

Traditional 4S dealership investors are mostly people born in the 1960s and 1970s, or even older. When 4S dealerships rose in the late 1990s, they were in their 30s, different from the planned economy familiar to their predecessors or leaders. They also accepted the management ideas of modern market economy from the West, coupled with the wave of nationwide automobile popularization brought about by the rapid development of the Chinese economy. Most of them achieved great commercial success.

But to be fair, in an era where obtaining authorization for joint venture brand 4S stores basically meant making money, their success relied more on the monetization of "network relationships". The strategies and methods for internal construction and external competition of the enterprise came more from the training and mandatory assessment of the host factory. The survival and competitive logic of modern enterprises were still in a relatively ignorant state or in a fragmented stage.

The competition between enterprises ultimately boils down to the competition of the innovative ability, professional knowledge, and comprehensive literacy of high-quality talent teams. The high-quality talent team has risen from the category of labor to the height of human capital, which determines the technological innovation, product quality, and market adaptability of enterprises. ‌

Human capital is different from traditional capital such as funds, equipment, land, etc. It is acquired and accumulated through knowledge updating, skill improvement, and collaborative efficiency, and becomes a strategic resource for enterprises to gain sustained competitive advantage.

In the year 2025, when the automotive industry was in turmoil, many investors relied on their "personal connections" to obtain authorization to invest in joint venture brand 4S stores. However, now they are deeply mired in losses and cannot extricate themselves. Salary cuts and layoffs have become a daily operation for many investors.

But in this round of personnel reform, how to make personnel choices has become their biggest headache. Here we recommend selecting and appointing personnel from four combinations based on the dimensions of morality and talent, in order to strengthen the competitive edge of the enterprise.

02. Personnel reform dilemma in the quagmire of losses

The virtue here is not the traditional humanistic morality, but more importantly, the recognition of corporate culture and value orientation, the professional ethics of dedication and love for work, and the personality traits of daring to take responsibility;

The talents here are not those who can speak fluently or play music, chess, calligraphy, and painting. Having these skills is certainly better, but more importantly, comprehensive qualities such as historical achievements, skill level, learning ability, and so on.

There are four combinations of the dimensions of morality and talent: possessing both morality and talent, having morality but lacking talent, having talent but lacking morality, and lacking morality but lacking talent.

For those who possess both moral integrity and professional competence, important responsibilities can be entrusted, such as the legal representative and CEO of the group company, directors at all levels, store managers, and other positions with significant interests;

If it is a single store, key positions such as store manager, department manager, and team leader of various trades will be appointed. Most of these people have followed investors to start their businesses and have proven their virtues and talents through too much time and events.

Talents with both moral integrity and talent are hard to come by, just like if it weren't for Cai Chongxin assisting Mr. Jack Ma, Alibaba would probably be much inferior.

For those who lack morality and talent, the first reaction of many investors is to sweep them out and refuse to stay. In fact, this is a misconception. As mentioned earlier, the virtue here is not the traditional humanistic morality. Of course, those who have been sentenced and convicted for committing crimes are not included in this category.

The term 'immoral' here refers to a lack of sense of belonging to the enterprise, a lack of enthusiasm and initiative in work, and a state of indifference and lack of concern towards work; No talent refers to average work ability, perfunctory treatment of training, and unsatisfactory results, unable to provide any improvement suggestions, recommendations, or even ideas for the deficiencies in work.

The majority of employees without morality or talent are in low paying auxiliary positions. Internal training and continuous replacement are essential for these employees, but it is impossible to eliminate them. The purpose of cultivating and replacing them is to discover malleable talents and transfer them to types with morality but no talent. Employees who have not yet shown any morality or talent should either seize the time and opportunity to showcase themselves, or leave quickly and let each other go.

As for how to distinguish and appoint employees with morality but no talent and those with talent but no morality, interested fans can contact the author for communication.

After classifying employees based on their moral and talent, suitable talents should be retained and not allowed to leave as much as possible. Mr. Jack Ma once made a classic two reason summary for the resignation of employees: not giving enough money and feeling wronged.

As for the current business model of car dealerships, the reason why the money has not been paid properly may be due to a lack of effort rather than willingness. Here, I want to speak well of these authorized store investors. As the saying goes, if you don't manage your own business, you won't know how expensive your daily necessities are. Which authorized store's accounting items are not just limited by income, but also continuous by expenses.

A 100 person authorized store, where each person makes an insignificant mistake once a year, should be considered forgivable, right? But what if these mistakes were made by one person? Is it unforgivable and must be punished?

Unfortunately, as the investor of this store, he is like the person who made 100 mistakes a year, because he bears the ultimate consequences of these 100 mistakes. However, it is clear that he did not make any mistakes, so don't just see the thief eating meat but ignore the beating he received.

If the money is not given properly, it may be due to reasons, then the investor is wronged and cannot be exempted from responsibility 100%. Every corporate executive I have come into contact with who has resigned has experienced at least one 'greatest humiliation of their life' when resigning.

03. The way to break through: a trio of salary, emotions, and career retention

At this point, the three elements of retaining employees in enterprises: salary, emotions, and career can be flexibly combined and applied.

When it comes to salary retention, investors may disdain it, just like the statement made by a boss at a party that has gained more recognition: what high salary can meet the requirements of retaining people with salary? I suffer millions of losses every year, while they earn tens of millions of dollars in income every year. They earn more than me. Who is the boss? I feel like I'm working for them, not them working for me!

Indeed, with the current situation of authorized stores, even if Jack Welch comes, he may have his performance deducted. The annual income of the chairmen and general managers of the eight listed car dealership groups in China is almost all declining in 2024 compared to 2023, and the decline in the chairman's income is even greater. The annual income of Zhou Xiaobo, the chairman of Baideli Holdings, has just exceeded 200000 yuan.

Salary retention is not more about reaching an absolute number. Confucius said, "Don't worry about scarcity but about inequality, don't worry about poverty but about insecurity." I have always believed that the salary system is the most fundamental system of an enterprise, the thickest one in the baton of interests.

As the initial and final approver of the compensation system, investors provide employees and talents of the company with a predictable and strictly enforced compensation system. It is not about pretending to be poor every day when making money, nor about raising funds for employees to advance and retreat together when making losses, so that they do not have to worry about inequality and anxiety, achieving the most basic salary retention.

Emotional retention is not the cake on an employee's birthday, nor the red envelope blessings given by superiors to subordinates during annual meetings. Will anyone give up the idea of resigning because of these? When there is a conflict between customer, shareholder, and employee satisfaction, putting employee satisfaction first is doing emotional retention.

I once conducted an employee satisfaction survey while managing a store. When both the boss and management anticipated that the first item of dissatisfaction for employees would definitely be low wages, the most frequently mentioned item ranked as the least satisfied was that administrative and financial personnel could eat their lunch first and receive more dishes, making them feel like they were eating leftovers!

Dignity is the foundation of emotions, how can emotions be sustained without dignity?

The foundation of career retention is timely and appropriate career planning. Enterprises provide employees with the knowledge and skills training they need and a stage to showcase their talents for their career aspirations, achieving their career advancement path and transforming an employee without morality or talent into a pillar of both morality and talent. Only through long-term efforts can they achieve great success.

Try not to do the kind of frontline promotion that involves upgrading three levels in a row, as it will shatter the mentality of the entire team. The survival rate of saplings that sprout on site and grow for years is definitely higher than that of towering trees that are grown by pulling out seedlings or even transplanting them. The same applies to talents.

Nowadays, those first generation authorized store investors are gradually aging, and their knowledge system and expertise inevitably have the imprint and limitations of their time. However, they also have strengths and abilities that investors in other eras and fields do not have. Moreover, with the increasingly fierce competition in the industry, the tests on them are actually comprehensive.

Whether it's due to necessity or emotional turmoil, they are still braving the storms of the market, using their hard-earned capital and no longer young bodies to practice the most authentic business management. Regardless of success or failure, these experiences themselves are wealth to society and deserve our applause.