On the afternoon of May 25th, the "Forge the Heart, Reach New Heights - 2023 China Auto Dealer Conference" hosted by the China Automobile Circulation Association was grandly held at the Changsha International Conference Center. Chen Jikai, Vice President of Baturu, was invited to attend the 2023 Auto Dealer Procurement and After-sales Forum and delivered a keynote speech titled "Digital Solutions for Parts Centralized Procurement Help Dealers Reduce Costs and Increase Efficiency." The following content is excerpted from the speech.

Parts Procurement "Chronic Issues" Are Not Unbreakable

In recent years, affected by factors such as the pandemic, auto dealers have continuously faced market "cold waves." With new vehicle sales and parallel business showing a "high start and low finish," after-sales business has taken center stage, contributing nearly 50% of profits and has become one of the most focused business segments for auto dealers seeking stability and growth. Among these, parts, as a key link in after-sales profitability, have many pain points.

Currently, dealers generally face high capital occupation, low management efficiency, and high management risks in parts procurement. Due to scattered procurement resources, numerous suppliers in the market with mixed quality, and lack of product quality standards, there are many control dimensions and high management difficulty.

Meanwhile, with multiple circulation levels for parts, price opacity or inconsistent pricing frequently occurs, making it difficult for groups and stores to effectively control procurement processes, resulting in inflated procurement costs. Additionally, the hidden costs in time, management, and operations brought by "high dependence on manual work" should not be overlooked.

Traditional extensive management is no longer sufficient to meet the management needs of current dealer groups. How to utilize digitalization to achieve cost reduction, efficiency improvement, and revenue increase has become a key concern for auto dealers.

Digital New Engine Empowers Dealers

Auto Parts Centralized Procurement Costs Drop 10%+, Efficiency Improves 30%

Baturu, based on nearly 10 years of deep involvement in parts supply chain self-operation and accumulated digital capability systems, has launched a digital solution for auto parts centralized procurement for auto dealers. Using SaaS as the foundational support, it can achieve full-process digitalization of parts procurement. Meanwhile, Baturu can also output high-quality source supply chains and supply chain operational capabilities, helping dealers build a transparent, efficient, mature, and stable parts supply system.

Specifically, through the introduction of the solution, stores can achieve online and standardized management of their own suppliers. Parts procurement from inquiry, comparison, ordering, payment, delivery, after-sales, and reconciliation goes through a complete digital closed loop, enabling online control of the procurement process. Combined with functions such as "anti-collusion," it can comprehensively reduce parts procurement costs, including visible price costs and hidden costs in time, management, and operations.

Furthermore, Baturu currently possesses over 2,000 high-quality parts factories and dealer resources, which can achieve precise source matching according to dealers' different brands and quality requirements. Cloud warehouses composed of group-owned suppliers plus Baturu's supply chain can help dealers conduct more comprehensive sourcing and procure more cost-effective parts, shorten procurement cycles, and achieve cost reduction and efficiency improvement.

Going forward, Baturu will take parts centralized procurement management digitalization as a starting point and continuously extend to common business scenarios troubling dealer profitability such as slow-moving inventory, OEM parts procurement tasks, and supplies and accessories, forming a comprehensive digital solution covering all procurement business scenarios and helping dealer groups achieve "double harvest" in after-sales business revenue and profits.

10 Years of Capability Refinement, Recognized by Over 50 Large Dealer Groups

Currently, over 50 large dealer groups nationwide have reached deep cooperation with Baturu, fully verifying the cost-reduction and efficiency-improvement power of the parts centralized procurement digital solution.

Among them, top 100 dealer Nanling Group reached cooperation with Baturu in December last year, and starting from the second month of cooperation, the combined monthly reduction in procurement personnel costs and parts procurement costs averaged over 10%.

The reason for rapid results depends on one hand on dealers' understanding and recognition of digitalization and implementation execution, and on the other hand on Baturu's nearly 10 years of data, systems, supply chain, and operational capabilities accumulated through parts self-operated transactions. These digital capabilities can help dealers quickly achieve digital transformation of after-sales business.

As Shen Jinjun, President of the China Automobile Circulation Association, said at this top 100 dealers conference: Dealers need to grasp the "key link" of digitalization and achieve refined operations, promoting growth through digitalization.

In the process of comprehensive digitalization for dealers, the growth brought by parts centralized procurement digitalization will become a highly reliable "profit cow" for their long-term and stable development.