What Are the Future Development Trends of the Automotive Aftermarket?
2 Answers
The future development trends of the automotive aftermarket can be summarized in eight aspects, as detailed below: 1. Chain Stores: AC Auto's survey of the top 100 chain repair companies shows that the main factors restricting the development of repair companies are still internal management (customer acquisition and relationships, parts supply chain, and technicians). The industry generally favors the development of supply chain-driven repair chains. 2. Supply Chain: Supply chain companies are essentially high-tech enterprises requiring significant investment, with a strong retail and distribution network, efficient logistics management, refined inventory management, and high-level capital management, rather than low-level price competition. 3. Insurance: After the reform of auto insurance premiums, the continuous decline in premiums is irreversible. Insurance companies are focusing on 'cost-cutting' at the claims level, starting with selecting high-quality repair companies and building certified parts circulation systems, which will inevitably dominate the development of the accident vehicle industry chain. 4. Mergers and Acquisitions: Regional chain mergers and acquisitions occurred frequently in 2017, but nationwide mergers and acquisitions are still difficult. The main reason is that high-quality assets in China's automotive aftermarket have not yet been corporatized, making mergers and acquisitions impractical and difficult to acquire core advantages to block new entrants; mergers and acquisitions of non-high-quality assets are meaningless. 5. Players: The impact of major players such as OEMs, insurance companies, 4S groups, and industrial capital on the independent aftermarket is that all players are expanding their space, promoting the integration and coverage of the entire value chain from parts production and sales to services such as car washing, decoration, maintenance, and mechanical repairs. 6. 4S Groups: Although 4S shops capture a larger market share in vehicle maintenance, they face significant challenges: high and non-transparent prices, limited and inconvenient locations, and persistently high loss rates of new car owners. Chain stores with better brand recognition and geographical advantages are the biggest winners in capturing the 'dividend' of lost 4S shop customers. 7. Terminal Stores: For individual repair companies, the key is to enhance customer experience within a 3-square-kilometer radius, use informatization to master 'small data' on car owners and vehicles, establish their own O2O system, and provide 'butler-style' services to build trust with customers. 8. Car Owners: There are two pieces of news in the automotive aftermarket: the bad news is that the average vehicle mileage is declining, and the annual maintenance frequency and expenditure of car owners are decreasing; the good news is that car ownership is still growing rapidly, and the overall size of the aftermarket is expanding quickly. It is estimated that by 2020, China's car ownership will reach 248 million units.
I think the future of the automotive aftermarket will be exciting. Cars are becoming increasingly intelligent, and with the widespread adoption of electric vehicles and autonomous driving technology, maintenance methods are undergoing significant changes. Traditional engine repairs are decreasing, but battery maintenance and software upgrade demands are surging. Repair shops are using AI tools for diagnostics, and mobile apps enable remote control, saving time and effort. Online parts shopping is becoming popular, making DIY repairs much more convenient. With the rise of car-sharing, individual repair frequency is decreasing, while demand for professional maintenance services is increasing. Competition among chain quick-service shops is fierce, leading to more transparent and affordable pricing. Remember to keep learning new technologies to stay ahead of the trends, and choosing reliable service providers is crucial. In the future, everything will be more efficient and intelligent. Vehicle maintenance costs might initially rise before falling, but ultimately, it will become more hassle-free.
