Automotive Aftermarket, the Next Main Battlefield - 2018 China Automotive Aftermarket Research Report

On January 9, China's auto market was "from chaos to melee." Since the automotive market entered the first year of development in 2012, it has been scattered, chaotic, and poor. After six years of rapid development, the market finally has the darkness before the dawn and the appearance of setting off the dark clouds to see the sunrise.

The big market trend has already taken shape. The big winner of the big format has seen it in 3 years.

For the first time in eight consecutive years, the automobile production and sales are the first in the world, even if the growth rate slips only at 4%. Still 29 million new vehicles. In 2017, the number of vehicles in China is expected to reach 215 million vehicles. The current average age is still only at a relatively low level of about 4.5 years. After the auto market scale continued to grow at a high speed after the 2016 trillion mark, Jing Kui studies that the capacity of China's auto aftermarket has exceeded 1.3 trillion in 2017, making it the world's second largest market after the US$241 billion.

Overview of the auto aftermarket in 2017, King Binghua, partner of Kwai Kwai Investment, pointed out that China's auto market is "from chaos to melee." Since the automotive market entered the first year of development in 2012, it has been scattered, chaotic, and poor. After six years of rapid development, the market finally has the darkness before the dawn and the appearance of setting off the dark clouds to see the sunrise. A large industry development and recognition, first of all need to dare to be the first company in the world, this is not only reflected in the scale of sales, the number of stores, the scale of financing, but also need to have integrity, have a responsibility, have a vision, innovation, automotive aftermarket Began to show the pattern of the strong leader. In the chain of accessories, Kangzhong Auto Parts Co., Ltd. covering 400+ directly-operated stores across the country continues to cover and deepen the country’s auto parts supply chain, auto services, Chijia, Che Xiangjia, Master Zhuofu, and German Masters or leveraging industry resources or industries. Capital, continue to develop brand chain stores, and strive to provide standard and high-quality services for owners.

Insurers try to control the automotive aftermarket through hardware and software integration, parts supply chain and DRP

According to the research report of the insurance company in 2016, Kwai Kwai pointed out that the insurance company has already changed from being an agent in the automotive aftermarket to becoming a bureaucrat. Then, in 2017, insurance companies are taking a closer look at the layout of the automotive aftermarket. In addition to the previously launched accessory certification system, PICC P&C Insurance and People's Insurance Co., Ltd. invested in Bang Bang auto parts and began to accept insurance accident car claims, creating a B2B auto panel distribution platform. At the same time, Ping An and PICC's multiple insurance companies tried to use the DRP to start the accident maintenance system. Through the cooperation with CCCIS, a US auto insurance system service provider, three types of service markets, namely the sedan, the Huasheng and the masters of the 4S system, have been launched. This will create a new China accident vehicle maintenance system. The insurance company has to be hard-handed and constantly seeks to control the standards and voice of the auto market.

Can OEMs Become "Dimensionality" Attackers in the Automotive Aftermarket?

Both OEMs and 4S stores are striving for the routine maintenance service market, and attach importance to the business expansion and cross-border operation in the post-market segment. After the Shanghai Automotive Co., Ltd. took the lead in arranging assets and independently sold after opening 1,000 stores, Ford, Citroen, and Dongfeng Nissan Both Honda and Honda have followed suit, either high-profile or light taste of setting up an independent 2S system to recapture brand owners outside the lost 4S system.

The pace of insurance companies and OEMs in 2017 did not stop, of course, but the control and influence of the final market remains to be verified.

The key to "cross-border robbery" is in the name of innovation or substance.

What is more inconvenient is that cross-border e-commerce giants such as home appliance chain giants and BAT have all started to enter the auto aftermarket. In the name of innovation and with new retail/unrestricted retail, “cross-border robbery” has entered the auto market with a high profile. . Home appliance chain giant Gome cuts into the automotive aftermarket from the supply chain service, and Suning cuts in sales and auto finance, and the whole industry layout. Internet platform BAT挟 capital, flow and technology, continuously promoted the layout of the automobile industry. JD “unbounded” and the U.S. taxi team also entered the automotive aftermarket and travel areas. In terms of capital operation, the amount of financing for the aftermarket in 2017 increased significantly. However, compared to time-share leasing and car travel, it is still only the tip of the iceberg. The potential unicorns will inevitably gain greater industrial resources and more capital bets.

Kang Binghua believes: "The largest market after real estate as a real estate market, and even more than one trillion in each of these market segments, will surely be the next major battleground for big capital and BATJ and other big platforms."

As an insurance company, insurance companies are continuing to control the auto aftermarket through the supply chain and DRP software and hardware. The impact of big players such as capital and insurance companies, and Internet platforms on the auto aftermarket is also not to be underestimated. New energy vehicles have also gradually become a new force in the automotive aftermarket. More than 4000 billion yuan of funds have been poured into the manufacturing of new energy vehicles, and subsequent new energy vehicles have been leased and shared vehicles.

Automobile as a commodity, low frequency and special consumption attributes throughout the long life cycle, previously scattered in different areas of new cars, used cars, auto insurance, auto finance, car maintenance, car modification, automotive supplies will be 1-2 in the future Each company or platform provides one-stop, comprehensive, full-cycle services. Whether it is killed by big players or not, eating alone is worth paying attention and thinking.

Even in the entire field of travel, we can see that Didi enters shared bicycles, Mobike enters the shared electric car, the US Mission and the Easy-to-Go Special Warrior, and Baoneng has acquired 6.5 billion gold to pay attention to whether or not there will be “your site”. . Mobile Internet blurs the boundaries of consumer physics, can only stick to consumers around time and space, and blurs the boundaries of products at any time. The “cross-border robbery” has never lost its soil in China, and it has never lost its “bandits”.

Stick to or dance together

No matter what industry and market segment, technology is not a panacea, innovation must be based on industry knowledge. Especially in the automotive aftermarket, the 3D law of “timing, fixed-point, and definite person” already exists. The 3km business circle, the last 1km distribution, and tens of millions of data matching, professional and technical professional equipment and professionals provide more than just products. , It is more personalized service and solution. These are the strongest infrastructures and requirements for 2C or 2B. Like the giants of the e-commerce and take-away platforms, there are thousands of deliverers who walk through the streets every day.

In 2017, in the retail chain and e-commerce platforms outside the auto market, new and unrestricted retail terms, online and offline marriages took place. Ali stocked shares in Gaoxin Retail (Darunfa) and Sanjiang Shopping. With Beilian Group, Tencent has stake in Yonghui Supermarket and Amazon has wholly-owned to purchase Whole Foods Supermarket. The online platform experienced a period of steady growth after high growth and had to go back to rediscovering the value of offline stores. In fact, the largest volume of traffic and entrances has been online.

Under the trend of the big market, after the auto market companies stick to and enhance their own value, they must implement Things Big Big, or leveraging capital or combining industrial resources to achieve bigger and stronger. Either become a big player or dance with big players to gain a place in the fast-growing and constantly changing automotive aftermarket. In 2018, the auto aftermarket will become the main battlefield of internal and external, online and offline, industrial capital and new forces, and Jing Kui believes that within 3 years, the future will be decided and will determine who will become the big winner.

Automotive market will continue to grow rapidly

The standard definition of the automotive aftermarket includes auto parts, automotive supplies, car maintenance and car modification beauty. In addition, the relevant market segments of the automotive service industry chain such as used cars, auto finance, and automobile insurance will all grow at a rapid rate, with an overall CAGR of 28%.

Under the high growth of total market volume, the maintenance frequency and routine maintenance costs of vehicle owners have declined.

The survey data of 1,507 car owners showed that 56% of car owners carried out regular maintenance of the car for at least half a year, and the average annual consumption of conventional maintenance was 3,021 yuan. With the increase in the age of the car, the maintenance frequency of some owners has a downward trend. With the fierce competition in maintenance and maintenance, the stores have adopted subsidy and promotion in different degrees. As a result, the cost of conventional maintenance continues to decline, compared to 2016. The average annual maintenance cost dropped by RMB 1,000 this year, among which the maintenance cost reduction for low-priced vehicles was more than 40%.

As a company in the automotive aftermarket, facing the constantly new competitors and looters, how to deal with the decline in the frequency of vehicle maintenance and the large percentage decline in the owners' regular maintenance costs seems to have become an unbearable pain.

4S stores and auto service chain channels still account for 85% of the absolute market share, and all have a slight increase.

The 4S shop still occupies an absolute share of the automobile service chain, and it is difficult to be shaken for quite a long time, and it has continuously eroded the business of roadside shops and repair shops with the auto service chain. However, the survey also found that even 30-50,000 and 800,000 mid- and high-end owners still choose to leave the 4S store.

The proportion of self-purchased parts in high-end and high-end owners has increased, and the price, selectivity and quality are still the major reasons for self-purchasing.

In the accessories self-purchase channel, car owners prefer E-commerce and brand online malls, of which the oil pipeline has a significantly reduced proportion of channels. With respect to the purchase of automotive products, the proportion of self-purchasing has been rising, the lower the age of the car, the higher the degree of attention to the brand and quality of automotive products, and the product selection has shifted from price-oriented to brand-oriented.

The survey also found that car owners have a high level of awareness of new energy vehicles, and their willingness to make new purchases has reached a record high of 66%. While the perception of time-shared leasing is related to the level of urban lines, time-sharing leasing still requires time.

About Kwai Kwai Investment and Kwai Kwai Institute

Kwai Kwai Investment is an investment fund focused on the automotive aftermarket. It helps companies achieve rapid growth through both capital and knowledge base resources. Under the Kwai Kwai Research Institute, it is committed to the in-depth study of vehicle owners (consumers) and automotive aftermarket enterprises. It will complete and publish the "China Automotive Aftermarket Research Report" for the sixth consecutive year from 2012 to 2017.