Executive View: Can dealerships become the BEV brand theme park?

When it comes to buying Chinese brands, new car buyers are divided about whether they prefer single or multi-brand dealerships, according to a new study by data analytics firm, Escalent. Mark Carpenter, its UK managing director, explains how this could influence Chinese car dealership distribution strategies.

Some established automotive brands have fallen in and out of love with agency models in recent years, but the fact remains that the vast majority of car buyers need to get up close and personal.

The old adage of ‘try before you buy’ has never been more important especially with a new powertrain, while in-person knowledge-seeking, even in an age of online sales, is still fundamental in the car buying process.

But while functional sales and service aspects are central, a dealership can also be a ‘theme park’ of sorts for brand values, as well as a tangible expression of serious commitment to a market.

This points towards the need for a dealership network. Different automotive companies have different views about the number of brands that appear under a single roof; the question being whether a brand’s values can be properly represented if it has to share with another marque within the same corporate family? 

Strategic decisions like these can have a major impact on go-to-market investments, especially if you are a Chinese car maker with multiple brands to present to potential new customers – in new markets.

Divided opinion

Findings from Escalent’s Chinese Automotive Brand Impact Study of new car buyers in Europe (France, Germany, Italy, Spain and UK) show that opinions are divided when it comes to the type of dealership they prefer when considering a new vehicle.

We found that on average, more than half (56%) of buyers have either no preference between single or multi-brand dealerships or would prefer the multi-brand scenario. A sizeable minority (43%), however, prefer the traditional one brand, one roof proposition.

It’s perhaps no surprise that single brand dealership preference skews towards older car buyers, while those under the age of 35 are most enthusiastic about multi-brand dealerships.

This growing acceptability of multi-brand dealerships will come as good news to Chinese manufacturers looking to gain ground in UK and European markets.

For Chinese brands entering a market, this becomes significant for their sales and distribution strategies and for creating a tangible and credible brand footprint.

The single roof single brand approach may be more traditional, but it potentially requires a much bigger investment.

Those in an alliance with an established brand could potentially co-exist under one roof providing instant credibility and proof of logistical legitimacy. It follows that the likes of Geely has many options available to it.

Independent Chinese automakers with multiple brands, like NIO, which is already establishing itself as a key player in the premium BEV market, could also live under a single roof rather than curating a massive real estate portfolio.

The value of brand

Brand, as we know in the automotive business, is critical to success. Chinese BEV brands may be in their infancy but are making big inroads on the more established car manufacturers thanks to their competitive pricing, advanced technology, and increasingly, investment in high profile advertising campaigns and sponsorship deals.

This means growing awareness and familiarity among potential new car buyers. But more important is the consideration to buy. While a majority of respondents in our study have never heard of many Chinese brands, one in five car owners (of any automotive brand) would ‘probably’ or ‘definitely consider’ a Chinese car.

This suggests a critical mass of interest in a highly competitive marketplace. Established automakers would do well to look over their shoulder at the competition.

Even though brand familiarity is relatively low right now, things are changing as more consumers see them on TV, at sports events, and on dealership forecourts.

In our top 25 ‘brand familiarity’ list, a small number of Chinese brands are making themselves known. The top end of the table is understandably dominated by the likes of BMW, Audi, Mecedes, VW and Ford, but we see MG at number 22, Volvo-owned Polestar at 24 and BYD at 25. 

The dealership as a brand experience hub

As Chinese automakers establish themselves in Europe and their momentum builds, the role of dealerships extends beyond transactions to immersive brand experiences.

With most car buyers either having no strong preference or being open to multi-brand showrooms, the door is open for Chinese entrants to explore a flexible retail model that balances cost efficiency with brand presence.

Whether through dedicated brand spaces or shared dealership environments, manufacturers must ensure a compelling in-person experience that builds trust, showcases innovation, and ultimately drives sales in an increasingly competitive market.

Author: Mark Carpenter, UK managing director, Escalent