Automotive Aftermarket: Incalculable "Money" Views, and Unpredictable Risks

In 2016, China's auto aftermarket reached a trillion-dollar scale; in the first half of this year, the post-market dynamics remained the same, with nearly 20% year-on-year growth.

In the context of China's new car market reaching the top of the world for seven years in a row, and the vehicle ownership of more than 200 million vehicles, the post-car market is showing signs of renewal and surging, with hot spots and frequent highlights. At the same time, this high-speed growth is accompanied by various disorder and anomie.

Self-provided ingredients, kitchen processing

In the past few years, the choice of where the car is maintained is still an “obsession”: Relatively speaking, 4S stores are relatively safe in terms of technology and parts, but the maintenance and repair prices remain high, resulting in a large number of owners after the vehicle is out of warranty. No longer choose 4S shop for maintenance.

At present, the churn rate of 4S stores after the vehicles are out of service keeps rising, and most of them have flowed to social independent maintenance factories and chain maintenance companies. The other side is a small, scattered, disorderly roadside shop. Many social independent repair shops and roadside shops are much cheaper than 4S stores in terms of accessories, working hours, etc., but accessories and technology are always difficult for consumers to rest assured. Consumers can only maintain their interests in the long run between the two.

But nowadays, with the onlineization of car owners' consumption habits, the combination of online and offline maintenance of “self-provided ingredients and kitchen processing” has become a new “net red”. Buying accessories online and booking and maintenance services offline become the new mainstream maintenance model. Its advantages of convenient and affordable, authentic guarantee are welcomed by the owners.

At present, the e-commerce platform has become the main purchase channel for auto parts and supplies, and brand and price have become important factors affecting self-purchase. However, compared to some large integrated e-commerce providers on the Internet, the sub-sectors in the automotive aftermarket cannot be focused and professional, and third-party sellers cannot solve the problems of counterfeit goods and high prices. More and more car companies are trying Self-operated model.

Companies including Volkswagen, General Motors, Mercedes-Benz and BMW have all launched self-employed online automotive sales platforms. In addition to providing an affordable price, it is also possible to control the quality and install it at its authorized dealers. Some analysts believe that self-employed e-commerce is able to strictly control the process of goods circulation, to ensure the highest degree of authenticity, and thus gain the favor of owners.

With the development and consolidation of new consumer habits, a number of outstanding emerging e-commerce platforms will provoke heavy responsibility for post-market changes.

Car insurance fee reform, Li Shang Limin

In the first half of this year, with the advent of the auto insurance fee reform, the industry competition has further intensified, adding to the smell of fire.

On June 9, the China Insurance Regulatory Commission issued the “Circular on Issues Concerning the Adjustment and Management of Commercial Vehicle Insurance Rate,” which indicated that it would further expand the independent pricing power of insurance companies, cut the lower limit of the floating coefficient of commercial auto insurance rates, and further reduce commercialization through marketization measures. The level of auto insurance rates indicates that the auto insurance fee reform has officially started.

Under the influence of this fee reform, the insurance company's premium adequacy ratio and loss ratio will be reduced, and poorly-managed insurance companies will face elimination, while those with higher management and management level will further expand market share.

For consumers, after this fee reform, discounts on auto insurance premiums nationwide can be as low as 3.8%, and in some regions even lower. For example, a car owner who has good driving habits insures a well-run insurance company, and the premium may be 20% lower than before the fee reform.

In the context of fees reform, the Internet giant has also actively deployed the auto insurance industry. For car owners, the internet giant's entry into the car insurance industry may mean that it is more convenient and affordable to purchase car insurance services. However, for the entire industry, this also indicates that the “car insurance + internet” campaign has started.

According to industry insiders, with the help of the e-commerce platform of the e-commerce company, insurance companies can collect large amounts of customer information and use technologies such as big data analysis to research the differences in customer characteristics, risk orientation, driving habits, and vehicle usage. Customer Differentiation Features and Different Needs R&D To introduce new insurance products that are more personalized and more in line with customer needs. For example, according to the customer's gender and other attributes, driving time, driving mileage, driving habits preferences, car environment and other tailor-made corresponding risk management programs, so that drivers with lower risk will enjoy a lower premium. At the same time, the auto insurance company can also conduct big data analysis and research on customer car risk points, tailor car risk management services for different customers, and guide customers to recognize the risk points of their car.

Capacity to be mentioned, standard to be raised

Although China's auto market is full of vitality, its development is not a smooth one.

The crisis of confidence caused by the opacity of information is the biggest crisis faced by the post-market. In the past, information on auto parts and auto repairs was held in the hands of operators and consumers knew nothing about them. Today, although there is an online platform, consumers can have a certain understanding of relevant consumption. However, due to their strong professionalism, consumers are still hard to make clear. As a result, some unscrupulous businesses took the opportunity to deceive consumers and shoddy and overspend, eventually triggering a crisis of confidence in the market. To change this status quo, we must import professional and standardized services to build an equitable and smooth consumer environment.

Experts in the industry stated that the barriers to entry in the automotive aftermarket are low, the lack of legal awareness among practitioners, and the room for improvement in technical quality have become the main “bottleneck” restricting the sustained development of the automobile maintenance industry.

In today's fierce market competition, after many maintenance companies have invested large sums of money to upgrade and upgrade their factories and equipment, the human resources of many domestic automobile repair companies have been unable to meet the needs of modern vehicle maintenance, and the proportion of high-level skilled personnel is low. The problem of low proportion of talented people with professional training, low wages, and inability to retain talents has plagued post-market automobile companies. Therefore, “the talent is rare, talent is hard to stay”, which is a common problem faced by many automobile maintenance companies. This issue has also become a key factor in improving the competitiveness and efficiency of enterprises.

Under the influence of various factors, the entire industry has both immeasurable "money" views and is full of unpredictable risks. The post-market operators must constantly reflect on, continuously improve their own capabilities, and form a standardized awareness, so that the entire post-market can be operated in a more rational and orderly manner, and customers can become more trustful and agreeable with merchants.