Gao Feng Insights, May 2017
China’s automotive industry has entered a new phase where new car sales growth decelerates, while the car population expands and the average car age increases. This brings enormous opportunities for expansion of the independent aftermarket.
In this paper, we examine the complexity of China’s independent aftermarket including the distribution channel and service shops. We also examine the key success factors, market dynamics and emerging marketing channels in the independent aftermarket. We will highlight the implications of these developments for key players along the value chain.
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.
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Managing Director, Gao Feng Advisory Company
Senior Associate, Gao Feng Advisory Company
Senior Consultant, Gao Feng Advisory Company