The Explosive Growth Opportunity in China’s Automotive Aftermarket

Gao Feng Insights Report, August 2016

We are pleased to share with you our paper titled: The Explosive Growth Opportunity in China’s Automotive Aftermarket.  In this report, we examine one of the major discontinuities shaping the future of the Chinese auto market:  the rapid expansion of the independent aftermarket (IAM).

China’s automotive market is transitioning from a period of rapid growth in new car sales to a slower pattern of expansion going forward.  While this slower pattern of growth is a concern for automakers and suppliers, the market remains at historically high levels of sales, and the car population continues to expand at double digit rates annually.  In addition, the average age of the vehicle population is rising.  Add to this a recent push by the Chinese government to allow sales of original equipment service (OES) parts by independent service providers, coupled with the emergence of digital platforms for accessing services, the conditions are ripe for discontinuous expansion of the independent aftermarket.

All of these factors are contributing to an explosive expansion of the automotive aftermarket services business in China.  In this environment, automakers and suppliers are seeking ways to offer a clear and differentiated value proposition in order to succeed in the aftermarket, and they must act quickly to compete with new entrants who are seeking to disrupt the traditional service model.

We welcome your comments and feedback on our briefing paper or in general about our firm. We would be glad to meet you in person to share our data and perspectives in a fuller manner. Please let us know if you are interested in meeting and discussing directly how we can help you to operationalize these insights.

Thought leadership is core to what Gao Feng does. We will, from time to time, share with you our latest thinking on business and management, especially as it relates to China and China’s role in the world.

Best Regards,

Bill Russo
Managing Director, Gao Feng Advisory Company
bill.russo@gaofengadv.com

Robert Zhang
Senior Associate, Gao Feng Advisory Company
robert.zhang@gaofengadv.com

Emily Wang
Senior Consultant, Gao Feng Advisory Company
emily.wang@gaofengadv.com