China's auto "aftermarket" is growing rapidly


With the rapid increase in the number of car ownership in China, the demand for “aftermarket” such as automobile insurance, maintenance, beauty, and used car trading has also increased. At the meeting of the China Automobile Industry Association's Aftermarket Committee held recently, experts from the China Automotive Industry Association predicted that China's automobile "aftermarket" industry is enjoying rapid growth and will reach an output value of 700 billion yuan in 2015.

From 2009 to 2013, China's automobile production and sales volume maintained the first place in the world for five consecutive years. In 2013, the number of civilian vehicles reached 127 million, which is expected to reach 200 million by 2020. Behind the ownership of billions of cars is the "aftermarket" industry of the one hundred billion-dollar car. According to the data, every 1 yuan of car consumption will drive automobile after-sales service of 0.65 yuan, automobile repair, spare parts replacement, refurbishing beauty, second-hand car trading, waste car dismantling and other automotive "aftermarket" industries will usher in a huge market space .

The factors driving the growth of the "post-market" are still high profits. According to Jian Jianhua, deputy secretary-general of the China Association of Automobile Manufacturers, despite the fact that China’s auto production and sales volume still maintains its growth momentum, after years of price wars, manpower and land-rent costs have risen year after year, and car companies have become increasingly profitable. In the past, profits from automobile manufacturing and sales have entered a downward path. In this context, the “aftermarket” of the automobile maintains a high growth rate of 25% to 30% per year, which has become a dazzling profit growth point for the automotive industry, thereby attracting attention from companies and capital markets. In the mature automobile market in Europe and the United States, "post-market" profits account for 60% of the entire industry value chain, compared with the "post-market" profit of China's automobile there is still a great room for improvement.

Take the used-car transaction as an example. In 2013, China's used-car traded 5.2 million vehicles, which only accounted for 4% of the total inventory, while the mature used car market in Europe and the United States accounted for about 20% of car ownership; the car rental sector was sold by lease. Out of the car sales accounted for only 10% of the total sales, the United States this figure is 35%, Germany sold by leasing cars accounted for 50% of its domestic sales; car consumers who are concerned about the individual consumer market, China's car modification With a rate of less than 10%, Japan has reached 80%, and the United States has also reached 70%, with huge growth potential.


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