China's automotive after-market moves towards a segmented era

【 Media Coverage 】 Release Date : 2014-10-08 Author : Kelly Editor : Jaime Source : People's Daily

The Ministry of Transport, the National Development and Reform Commission and other 10 departments jointly issued the "Guiding Opinions on Promoting the Transformation and Upgrade of the Auto Repair Industry and Improving Service Quality". A series of measures pointed to the persistent monopoly of industries such as 4S stores, and new formulations such as "encourage chain operations" to allow Chinese and foreign investors to see the potential business opportunities in the aftermarket service market of China's large automobiles.

Not long ago, the global information service provider International Business Machines Corporation (IBM) signed a strategic cooperation agreement with Beijing’s emerging domestic private car after-sales service chain agency, Tirecool. Service-oriented new automotive after-service chain format.


Feng Guohua, vice president of IBM Greater China, said that China ’s automotive after-sales service has a huge blue ocean market on how to better serve about 200 million car owners, and how to manage the trillion-dollar blue ocean market. As the industry enters the subdivision era, this There is huge room for future growth in one area.

Statistics show that as of the end of 2013, China had 137 million passenger cars. According to industry estimates, the size of China's auto after-sales service market in 2013 exceeded 450 billion yuan. According to the current growth rate of domestic auto sales, it is expected that the scale of the entire auto after-sales service market in 2015 will exceed 760 billion yuan.

For domestic automobile consumers, the high consumption and opaque prices of 4S stores, the dirty and messy environment of roadside repair shops, and the uneven level of domestic automobile repair industry have brought the after-sales service market segmentation opportunity.


Tim Liang, chairman of Beijing Tirecool Auto Service Chain, said that from the perspective of development in other countries, the automotive after-sales service market usually undergoes development stages from small stores to comprehensive large stores and subdivision services. Relative to the current US stocks of approximately 250 million passenger cars, the rapid growth of China's car sales has allowed Tirecool to see a broader domestic tire service market.

"The mature automobile service market in developed countries is mainly based on tire steel ring replacement services and tire retail chain stores, extending car maintenance and repair services, while in China, simple car maintenance and repair and car beauty are the main subjects. Tirecool need to learn Learn from the mature model of the European and American developed markets, and take root in the country through innovation to make it grow stronger. " Said Tim Liang.


Tirecool was established in 2008, and its parent company Crown international corporation  is a large private tire export company in Qingdao, Shandong. When the international financial crisis raged in 2010, Tim Liang, chairman of the group, set his sights on the large-scale entry of automobiles into the "gold market" of domestic tires in China.

However, as nearly 90% of the domestic auto tire market services are occupied by foreign brands, the strategy of the Tirecool to develop tire service chains in China has not been smooth over the past few years.

The release of the opinions of relevant departments has given Tim Liang the hope of future development. The opinion clearly stated that it is necessary to make full use of the Internet of Things technology to establish an auto repair parts traceability system, and to ensure that the spare parts supply channel is open and transparent, so as to achieve traceability and traceability of auto repair parts. And realize that consumers ’legal rights and interests can be recovered and liable; encourage the development of third-party auto repair parts certification agencies, strengthen the quality and reputation of parts; encourage chain operations, and promote market structure optimization.

"The directions indicated by the opinions of the relevant departments will be reflected in our future development strategy." Tim Liang told reporters. In the Internet era, companies are forced to change their minds. This year, offline and online will integrate their respective advantageous resources. On the one hand, we will expand their stores offline, and on the other hand, we will develop online. By sorting out the domestic mixed automotive after-sales service industry, the domestic automotive after-sales service segment is opened.

Source: People's Daily