Auto Aftermarket “Red Sea”? Industry changes lead to new trends

As a trillion-dollar market, the automotive aftermarket used to be a huge blue ocean in the eyes of investors and entrepreneurs, but in recent years, with the evolution of the market and the influence of various “black swan” factors, the automotive aftermarket has become more and more inward, and the market is not The turnover and profits of less-operated entities showed a downward trend.

For example, according to the data of the China Automobile Maintenance Association, the overall maintenance frequency of Chinese passenger cars and the number of car owners entering the store continued to decrease from 2013 to 2021. However, behind this “turning from blue to red” is actually the aftermarket after the car is brewing Accelerate change.

 

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Iteration of new technologies, impacting the automotive aftermarket

The automotive aftermarket refers to the general term for various service transactions generated during the use of the car after the car is sold, including car repair, modification, maintenance, insurance, second-hand car transactions, etc. There are many variables in the entire automotive aftermarket itself. factor.

But the deeper changes come from technological iteration. In the past ten years, the most notable is the impact of the rise of the “Internet +” trend on the automotive aftermarket industry. The Internet + automotive aftermarket has spawned Tuhu, Diandian, A large number of service application platforms such as Yangchebao and Guazi used cars.

At the same time, Internet giants have also entered the automotive aftermarket sector. For example, Baidu Maps uses its own APP as the entrance, and based on its own big data advantages, it has entered the auto maintenance, second-hand car trading and other industries. In addition, Internet giants such as Ali and JD.com have also entered this field. The application of the Internet and big data has profoundly changed the consumption scenarios and service experience of the automotive aftermarket, and further accelerated the survival of the fittest in the industry.

Another disruptive influence on the automotive aftermarket is the rise of new energy vehicles. The replacement of fuel energy by new energy does not simply switch power systems such as fuel vehicle engines and gearboxes to new energy systems, but the market logic and application scenarios will be subverted, and the automotive aftermarket business of traditional fuel vehicles will inevitably be affected. Of course, new service content will also be derived.

In addition to the factors of technological innovation, the epidemic situation in the past two years is also a factor for the shrinking of the automotive aftermarket. But in general, the potential of the automotive aftermarket is still huge, which is completely different from the decline in the single-store data mentioned above, and the overall size of the automotive aftermarket is still expanding. According to Zhiyan Consulting data, from 2014 to 2020, the scale of China’s automotive aftermarket industry has been on the rise, reaching 1,466.53 billion yuan in 2020. The number of cars in China is also on the rise. In the first half of 2022, the number of cars in China will reach 310 million, and the number of new energy vehicles will be 10 million, of which the largest 4-10-year-old car in the automotive aftermarket accounts for 50% Above, and the proportion of automobiles in 1-3 years is more than 35%. In the future, there are still huge opportunities in China’s automobile aftermarket.

New trends have emerged, and the automotive aftermarket is creating new opportunities. Facing the growing market size, many new trends have emerged in the automotive aftermarket. Especially with the blessing of new technologies, the path of market evolution is very interesting.

01The automotive aftermarket tends to be intelligent
Intelligence can be said to be the only way for the automotive aftermarket under the rise of Internet+

and new energy vehicles. Taking the car washing that car owners are most accustomed to, not only the operating equipment of manual car washing is becoming more and more intelligent, but also a large number of intelligent car washing equipment manufacturers have emerged in China.

The promotion of new energy vehicles may bring more intelligent imagination space, because new energy vehicles themselves are highly intelligent carriers, and the overhaul, maintenance and insurance of new energy vehicles may have intelligent iterations beyond traditional imagination, such as power exchange technology, intelligent self-service maintenance and so on.

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02 Brand chains are increasingly prominent, and the market is standardized

For a long time in the past, the automotive aftermarket has been characterized by high fragmentation, irregular competition, and low industry efficiency. Consumers also generally have low trust in corporate entities and insufficient service awareness.

In the face of this “battle between the rivers and lakes”, a group of enterprises are winning the market by standardizing and standardizing their services and operations through branding, chaining and franchising integration, such as Tuhu, Tmall Car, Che Jazz, De Shifu, Little finger, etc., even regional auto repair shops tend to form chain brands in the region.

In 2021, there will be 80 investment and financing events in China’s auto aftermarket, with an investment and financing amount of 40.695 billion yuan, the highest level in the past decade, among which the mainstream investment targets are also chain brands.

At the policy level, at the beginning of this year, the General Office of the Ministry of Transport, the General Office of the Ministry of Ecology and Environment, the General Office of the Ministry of Commerce, and the General Office of the State Administration for Market Regulation jointly issued the “Notice on Deepening the Comprehensive Application of Automobile Maintenance Data”, aiming to deepen automobile maintenance. The comprehensive application of data will improve the service level of the auto repair industry, better protect the legitimate rights and interests of consumers, and promote the high-quality development of the automotive aftermarket.

This also means that the country’s determination to speed up the standardized operation of the automotive aftermarket will objectively accelerate the branding and chaining of the automotive aftermarket.

03After-sales service “go to 4S shop”

In the face of the huge scale of the automotive aftermarket, car manufacturers have been coveted for a long time. For example, Shanghai GM has created a car workshop, which ranks in the top ten in the “Top 40 Chinese Auto Aftermarket Chain Enterprises in 2021″ released by CCFA, and the number of stores in 2021 will exceed 1,100.

In the case of rising sales of new energy vehicles, many brands have chosen the direct-sale after- sales service center model to replace the 4S store model, and thus gain market share in the automotive aftermarket. On the one hand, new energy vehicle technology has the characteristics of modularization, and new energy vehicle companies have the conditions and space for direct sales. On the other hand, the cost of the traditional 4S store model is relatively high, and direct sales can instead gain considerable market benefits.

04 Talent iteration intensifies
The popularization of new energy vehicles will inevitably bring about the iteration of talents in the

entire automotive aftermarket. Generally speaking, fuel vehicles have about 70,000 SKU spare parts, while new energy vehicles only need more than 6,000 SKUs, which means that maintenance items will be reduced. Correspondingly, the knowledge and ability structure of employees must be adjusted accordingly. .

The core is that engine maintenance and oil will be withdrawn from the market in a large area, and battery motor maintenance and repair will become mainstream. Xia Fang, Vice President of Little Thumb, once said at the sub-forum of the 5th Auto Rear West Lake Summit-Auto Repair Service (West Lake) Innovation Summit: If the maintenance value of a fuel vehicle is regarded as 100%, then the engine, transmission, and maintenance will be That’s half, and these are all maintenance items that electric vehicles don’t need. From this, we can imagine the iterative influence of talents behind this kind of change.

Of course, the demand for brake pads, air-conditioning filters, tire vulnerable parts, and sheet metal spray will still exist, and will even become more prosperous due to the expansion of the market. Therefore, no matter how the automotive aftermarket evolves, opportunities and challenges will always coexist.

In general, China’s automotive aftermarket still faces numerous new business extension opportunities, and more innovation and growth points can be found.

However, it should be noted that under the new trend, the traditional automotive aftermarket will be redefined, and applications such as digitalization, membership, and the Internet of Things will give birth to a new automotive aftermarket ecology with more dimensions and updated application scenarios. One area is worth looking forward to.

 


Post time: Oct-28-2022