The 22nd China Automobile Industry Development (TEDA) International Forum (hereinafter referred to as "TEDA Automobile Forum"), jointly sponsored by China Automobile Technology Research Center Co., Ltd., China Automobile Engineering Society, China Automobile Industry Association, and China Automobile Newspaper, was held in Binhai New District, Tianjin from September 17 to September 20, 2026. This year's TEDA Automobile Forum focuses on the annual theme of "building a foundation of wisdom and green, ecological empowerment, and win-win cooperation", and invites key guests to conduct in-depth discussions. In the main forum of the TEDA Automobile Forum on "High-end Insights: Smart Transformation, Green Promotion, and Upgrade to Build a New Ecology of the Automobile Industry" on September 19, Wang Du, Vice President of the China Automobile Circulation Association, delivered a speech entitled "Symbiosis and Breakthrough Under the Change - Reshaping the New Ecology of the Automobile Circulation Industry". In his speech, he said that the current automotive industry is undergoing three major changes: electrification and intelligence are redefining automobiles, mobility and circulation; the automotive industry has officially entered the knockout round; and the center of gravity of the automotive industry has gradually shifted from front-end manufacturing to the back-end service market and the stock market. According to Wang Du, the average gross profit margin of current dealers selling new cars is -21.4%, mainly supported by the gross profit of after-sales and financial insurance. However, the current after-sales sales are also shrinking significantly, which can no longer support the above profit logic. If the dealer profit model cannot be restructured, the dealer model will be unsustainable. The dealer inventory depth of mainstream car brands has exceeded 2 months, and dealer satisfaction with the main engine factory is only 56.3%, the lowest in recent years. The China Automobile Circulation Association expects double-digit negative growth in domestic passenger car sales in 2026. In Wang Du's view, competition in the automotive market has begun to gradually shift from product power to brand power. In brand power, the value of user services will gradually increase. As a result of this trend, the relationship between the host factory and the distributors and service providers will slowly change from the past active and passive relationship to a symbiotic relationship. Dealers and service providers should also take the initiative to explore the transformation of the one-time transaction relationship with consumers into a longer-term service relationship, and seek to maximize the value of the entire life cycle of user services. He stressed that the increase in value will bring about the enhancement of the right to speak, and the value of the circulation side will be as much as the right to speak. Wang Du, Vice President of the China Automobile Circulation Association, here is the transcript of his speech: Good afternoon, delegates! It is a great honor to meet you at this high level of insight. Today, my topic is "Symbiosis and Breakthrough under Change - Reshaping the New Ecology of Automobile Circulation Industry". Why the change? Because we can see that the automotive industry is really at a historical turning point, which is really too important. From the joint venture, this year should be exactly 40 years, we are from learning to running and then running, there are places where we are already leading. In the process, we have seen the automotive industry go from being a learner to being the world's largest production and consumer market. Today, three changes are happening: first, I think that the two waves of electrification and intelligence are superimposing, redefining cars, redefining mobility, and redefining circulation; second, the competition in the automotive industry is intensifying, and it has officially entered the knockout stage. After the knockout stage, who will remain in this industry is very important; third, the focus of the automotive industry used to be front-end manufacturing as the core, and will gradually shift to the back-end service market and the stock market. As a key link connecting production and consumption, the circulation field is at the center of this change. The feelings of circulation enterprises are the most direct, the transmission is the most rapid, and the most basic point of the industry can be reflected. Next, I will share some perspectives from the four aspects of change, change and invariance, resilience, and far-reaching thinking. Why emphasize the circulation perspective? Consumption determines the industry. The link between production and consumption is circulation. The effect of policies, the advantages and disadvantages of products, and the color of services are reflected in the circulation link, so circulation is "barometer" and "thermometer". As an industry organization that connects government, enterprises and markets, the Automobile Circulation Association has always insisted on observing the industry and service industry on the front line of circulation, which is the starting point of my speech today. First, let's look at "change". The number of vehicles in the country has reached 371 million, and it is expected to reach 450 million in the future. Of the 450 million vehicles we have, we are already basically the main stock, and the room for further increase is not so large. So what should we pay more attention to in the stock market? Consumers have already bought a car and will have to change it next. Unlike first-time purchases, product awareness is clearer than before and service may be more important. At the same time, the number of new energy vehicles is rapidly increasing, and more than half of them are now new energy vehicles. What exactly are we going to do next? As the value center of gravity gradually shifts backward, the proportion of production and circulation may gradually change. Next, let's look at intelligence and electrification. The core of electrification is to reconstruct the powertrain, while intelligence is to reconstruct the relationship, which is more important than the system power. We believe that intelligence is to reconstruct the relationship between people and vehicles, the relationship between people and roads, the relationship between people and cities, and the relationship between people and society as a whole. This change is brought about by intelligence, which can change the car from a simple vehicle to a smart mobile terminal. The change of this relationship is the change of the core of the industrial ecology. What is the car after all? The ultimate car is a living space, and this living space may eventually allow you to achieve both work and life in the car. This space can be arbitrarily defined, it can be a cafe, bar, office, meeting room or bedroom, any space you can imagine is here, the next step may be our direction. If the car is an ever-changing thing, then we think that the back-end service may become more important and more imaginative. And this service must be on the ground, not designed at the time of production. He must have many changes, circulation is valuable, service is valuable. In the end, no matter who does it, it may not be the current 4S store model, but it must be done by someone, it must have value, and this value will gradually become larger and stronger. Returning to the dealer's perspective, we can see that the profit model has changed, why? That is, in the past, we relied on earning price differentials, after-sales service, and 4S to make money, and now we are losing money. The gross profit margin of new cars is now an average of -21.4%, and selling cars is only an entrance to traffic, and it is no longer a tool for dealers to make money. Although most of them are still traditional dealer models, dealers are unsustainable in this proportion. The gross profit of after-sales and financial insurance is the root of supporting these dealers to live, but now car sales are losing money, and after-sales are also shrinking a lot. The maintenance price is low and the cycle is long. It can no longer support the entire service system. The original logic of the profit basic disk has ceased to exist, and it can only support relatively lightweight things. If the dealer profit model cannot be restructured, the dealer model is unsustainable. Why is the dealer so indemnified? The current industry average inventory cycle is 1.58 months, that is, we need to sell 1.58 months to sell the inventory. Mainstream brands have inventory depths of more than 2 months. Dealer satisfaction with OEMs is now only 56.3%, the lowest in recent years. We expect only 11.2% of dealers to grow in the full year, with more than 70% expected to decline this year. Our association also has a more pessimistic expectation for passenger car sales for the whole year in China, which may be double-digit negative growth. Total sales are still relatively optimistic due to exports. The relationship between users has changed. We used to talk about selling cars. After selling, we can do less and less. Our full lifecycle service and companionship after delivery to our users is our value. Cars have changed from a means of transportation to a way of life, which requires offline maintenance and more services, which are difficult for consumers to complete on their own and require continuous service, which is the value of our circulation. In the past, we were basically a dealership model, which is now the most core and main model in the automotive field in the world. But in China, we are walking a road that no one has ever walked. What kind of model will be formed behind the road of new energy vehicles, whether it is agency, direct operation, hybrid, or dealer-based, is the question we will answer in the next step. There is no standard answer to this question, consumer satisfaction, the lowest life cycle cost is the best solution. Just now, we talked about such variety, but the nature of circulation has not changed. First of all, connecting supply and demand, the core or service, consumers are willing to pay for satisfactory services is the essence of our circulation. The value of the channel has not changed. Although the model is changing, the service-oriented kernel has not changed. How do we respond? First of all, in the previous distribution model, selling cars was a service user, not a business user. In the next step, we can discuss how to use it, but in the end, what remains unchanged is the service, which is to maximize the value of the whole life cycle. We need to turn one-off transactions into long-term service relationships, so that every touchpoint becomes a node that establishes a deep connection with consumers. This can now be solved with AI and big data. Another is digital refactoring. The circulation field is relatively slow in this regard, because it is restricted by the main engine factory and consumers, so this part is relatively passive in the circulation field. What is more important in this regard is the new ecological symbiosis of the industry. Why Symbiosis? Previously, the relationship between the OEM and the dealer was active and passive. Now, due to the rapid rise of new energy vehicle brands, the symbiotic relationship between dealers, service providers and the OEM has become more important. Previously, we believed that product power determines whether products can develop steadily in the long run. The next step should be brand power, not just product power. The value of services in brand power will gradually increase. Whether it is a traditional fuel vehicle company or a new force, our brand power is not enough, which requires us all to think. At the same time, we see a new ecology. I think that retrofitting is a very important development direction. Many things in the car still want to change. If this change can meet the needs of consumers, I think consumers are willing to pay. Therefore, establishing a new type of vendor relationship that is equal and mutually beneficial may be one of the issues we need to face together in the next step. Judging the trend, because the development time of new energy vehicles is relatively short, the view on the whole life cycle is not particularly strong. Now that we have entered the long-term knockout phase, the entire life cycle of the car is very important, the value of the full life cycle service is maximized, the level of user satisfaction is exactly what, and how much ability is in the knockout phase, how can we not be knocked out? We need to answer this question together. In the past, circulation was the end of the industry, mainly with the manufacturing industry, whether it was defining products or price profits, it was mainly the decision of the main engine factory. However, in the stock market, there will be some value input from the circulation end, and the circulation end will have value to have a say. Therefore, the promotion of value is an important prerequisite for the promotion of discourse power, and how much value is how much discourse power. I will briefly communicate with you today. Please give us more guidance on any inappropriateness. Thank you.