Why have all Kia 4S stores been withdrawn?
3 Answers
4S internal shareholders no longer inject capital into 4S stores, and there is no working capital support, so they go bankrupt. Kia Motors: Kia, or Kia Motors Group, is a Sino-foreign joint venture engaged in automobile production and sales, established in December 1944, with its headquarters located in Seoul, South Korea. Business scope: Automobile sales services, Kia's logo consists of a bright red ellipse, a white background, and the red KIA lettering. Kia's models include Forte Cerato (Forte), Cadenza K7 (Cadenza), Sorento (Sorento), Sportage (Sportage), and Sportage R (Sportage R).
As a veteran driver with years of experience, I was quite puzzled to see the local Kia 4S store close down. Last year, I often went there for car maintenance, and it was clear that sales were indeed poor—the store was empty, and the staff mentioned they only sold a few cars each month, with severe inventory backlog. Rising fuel prices and a weak economy have made consumers tighten their purse strings. Especially with the rise of new energy vehicles, domestic brands like BYD have taken over the traditional fuel car market, while Kia failed to keep up with the trend, with slow model updates and significantly reduced appeal. Manufacturer support was also lacking, with frequent changes in rebate policies, making it hard for small dealers to turn a profit. I’m worried about future car repairs, as I’ll likely have to rely on third-party shops. This is actually part of a major industry reshuffle—small businesses can’t withstand cost pressures, and many brands are consolidating their networks.
I used to work as a salesperson at a Kia 4S dealership. Inside information revealed that the main reason for the store closure was razor-thin profits. Back then, our sales commissions were minimal, the manufacturer aggressively pushed inventory onto us, tying up substantial capital. The Kia brand's weakening appeal resulted in fewer customers, coupled with minimal advertising investment and the pandemic's impact, leading to a cliff-like drop in foot traffic. Rent and labor costs kept rising year after year, and there were even instances of delayed salary payments. More critically, strategic missteps in new car launches, particularly the delayed push into new energy vehicles, left them squeezed out by competitors like BYD and Tesla. I later switched to the used car business, where colleagues mentioned widespread dealer mergers or closures across regions—ultimately stemming from an unsustainable business model that gets hit hardest during economic downturns. My suggestion is for manufacturers to increase subsidies or restructure their distribution channels.
