Summary of Key Points
Traditional automobile 4S stores are facing their darkest hour: severe losses and a continuous wave of closures. A large number of idle outlets are being transformed or repurposed in innovative ways. Some have shifted to other industries such as fashion malls, night snack businesses, or cultural heritage museums; others are generating revenue by leasing out their properties, while some are exploring new energy solutions or strengthening their after-sales services. The emergence of “robotic 4S stores” represents a novel approach to survival in the face of declining industry pressures. At the heart of these transformations lies the need for dealers to adapt and find new ways to survive in the changing automotive landscape, with the reuse of land and space playing a crucial role.
Why Can't 4S Stores Survive?
Once, 4S stores were highly profitable businesses; for example, selling a Camry could generate a return on investment within one and a half years. But what’s the situation now?
- Profit figures are dismal: In 2025, only 23.5% of dealers were making a profit, while over half (55.7%) were in the red. Listed dealers fared even worse: Zhongsheng Holdings turned from a profit to a loss of 1.67 billion yuan, Yongda Automobile went from a profit of 280 million yuan to a loss of 300 million yuan, and Zhengtong Automobile lost 2.67 billion yuan.
- The trend of closures continues: In 2025, the number of 4S stores nationwide decreased by more than 400. Guanghui Automobile, which once had over 700 stores at its peak, now has only 218 (less than 30%).
- The root cause: The automotive industry is in turmoil: New energy vehicles are challenging traditional sales models, and the demand for fuel-powered cars is declining. In the first half of 2026, 63.87% of consumers postponed their car purchases, and even new energy vehicle sales slowed down. Manufacturers are offering fewer incentives, leaving dealers struggling to cover costs and relying mainly on after-sales services to stay afloat.
Can Conventional Transformations Save 4S Stores?
Most dealers initially tried to adapt within the automotive industry, but this path has proven difficult:
- New energy: While new energy represents potential opportunities, it’s also a challenging area. Leading dealers are collaborating with new energy brands (such as Yongda with HarmonyOS and NIO), but these brands are also reducing their store networks. The available market for 4S stores is limited due to competition.
- After-sales services: Although they are a source of profit (with a gross margin of over 44% and contributing more than 80% of total revenue), after-sales services rely heavily on fuel-powered cars, as new energy vehicle maintenance accounts for less than 10% of the business. Additionally, companies like Tuhu and JD.com have entered the car maintenance market, further squeezing dealers’ profits.
Exploring Alternative Paths
Realizing that the automotive industry is not a viable option, dealers are exploring other uses for their properties:
- Repurposing idle spaces: 4S stores are being transformed into various non-autonomous businesses. For instance, a 3,000-square-meter store in Anhui was converted into a clothing mall that doesn’t require fixed rent and generates revenue based on a 10% share of sales; a Shanghai store became a cultural heritage museum, while another in Ningbo was transformed into a night snack or barbecue venue. These formats require large spaces, which 4S stores typically have.
- Leasing properties as a source of income: Guanghui Automobile is a prime example of this strategy, with 5,000 acres of land and 2 million square meters of buildings leased out, generating stable rental income. There are several ways to lease these properties:
1. Whole property leasing: To businesses in the clothing or catering sectors, with either fixed rent or a percentage of sales revenue.
2. Partial space leasing: The front portion of the store is rented to new energy brands, while the back area remains for after-sales services (for example, a Buick 4S store rents out its exhibition space to a new energy brand, earning an additional 2.4-2.6 million yuan per month).
- Minor leasing activities: Idle workstations, office spaces, and parking lots are also rented out to generate extra income. For a 3,700-square-meter store in Shunyi, Beijing, the monthly rent is 77,700 yuan—a significant source of revenue for struggling dealers.
The Rise of Robotic 4S Stores
In 2026, a new trend emerged: the integration of robots with traditional 4S stores. These stores offer the same services as conventional ones (displaying vehicles, selling products, providing services, and addressing customer needs) but with the addition of robotics. For example, a Mercedes-Benz 4S store that adopted UbiSelect robots saw a 15% increase in foot traffic and extended customer stay times from 20 minutes to one hour.
- The potential is real: The smart robotics sector attracted 93.5 billion yuan in funding in the first half of 2026, with prices for humanoid robots dropping significantly (e.g., the Yushu R1 costing 29,900 yuan, and Songyan Power’s robot selling for 9,998 yuan).
- Still in the development stage: Currently, robots are mainly sold to businesses (B2B), with limited consumer adoption. Many experience stores use robots for small-scale activities like 19.9 yuan experiences or ticket sales, but these revenues are not enough to cover the costs of leasing large spaces and employing staff. While robots may not immediately save 4S stores, they represent a promising direction for transformation.
The Value of Space
Traditional 4S stores were once symbols of economic prosperity. Although their functions have changed, the value of land and space remains. Whether transformed into fashion malls, barbecue venues, or robotic services, these adaptations allow dealers to continue operating in a changing market. For those struggling financially, any temporary solution is welcome—after all, every boom eventually comes to an end, but space always awaits new opportunities for growth.