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Capital swarms into China’s automotive aftermarket

Driven by huge profits, more than 50 foreign automotive services suppliers have entered China’s automotive aftermarket, including Denso Corp., Delphi Corp., 3M Co. and Royal Dutch Shell, according to a report on Information Times.

Bosch has set up more than 500 automobile repair and maintenance shops in China. Yellow Hat, Japan’s largest automotive accessory supplier, plans to expand the number of its outlets to 500 in China by 2015. ACDelco, an automobile repair chain under GM, is committed to be a leader in the automotive aftermarket in East China. Pangda, one of the largest automotive dealer groups in China, invested ¥2.4 billion ($385.44 million) in automotive leasing, telematics and online services.

Business volume in China’s automotive aftermarket expanded to ¥240 billion in 2009 from ¥88 billion in 2005.

Lin Lei, co-president and CEO of Sinotrust Business Information & Consulting (Beijing) Co., Ltd., said that output value of China’s automotive aftermarket will reach ¥700 billion in 2015.

Profits made in the aftermarket account for 60-70 percent of the total profits of the automotive industry, said Xu Shi, chairman of Zonyi Auto Equipment Group, a leading company in China’s automotive aftermarket.

Output value of China’s automotive accessory and repair industry exceeded ¥190 billion in 2011.

The most common way to enter the automotive aftermarket in China is to open repair and maintenance shops. The aftermarket is disordered and still in the initial stage.

“There is no leader or guidance in China’s automotive aftermarket. This is the biggest problem in the industry,” said Gao Jiqun, founder of Jiqun Chebao Automotive Service Co., Ltd.

Chen Wenkai, CEO of auto.gasgoo.com, said that only when large distribution brands emerge after channel integration in the industry, can the problem be solved.

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