Franchising in the Chinese Automotive Aftermarket, Forecast to 2022
The Chinese automotive aftermarket is likely grow at a strong pace in the next few years from 2017 to 2022. By 2022, it is forecasted that the revenue of the Chinese automotive aftermarket $281.8 billion. Currently, the average age of vehicles exceeds the warranty period (0–3 years). In 2015, the average age of vehicle in operation was 3.3 years. The average lifetime usage period of a vehicle is 8–10 years. A large section of consumers need to go for service and maintenance in the automotive aftermarket. The franchise business model is growing. In the automotive aftermarket, the franchising model is a strategy to integrate the distribution channels. In order to build their reputation, many corporates, through franchising have opened many branches in various locations to provide higher a level of service along with the need to sell vehicle components at lower price.
The aim of this study is to provide a strategic insight into the potential for Franchising in the Chinese automotive aftermarket. The study presents the current scenario in the Chinese automotive aftermarket by providing a high-level overview of the factors that influence and impact its growth.
• To provide a strategic perspective of franchising in the Chinese automotive aftermarket, including key current situations, challenges, and future
• To estimate the size and sales potential of the Chinese automotive aftermarket in 2022
• To provide a competitive analysis of various automotive aftermarket participants’ activities, market shares, products or services provided, and
• To provide current Chinese consumers’ potential behavior toward vehicle maintenance
• To provide reasons for franchise stakeholder to grow in the Chinese automotive aftermarket
Key Questions This Study Will Answer
• What is the short-to-medium term outlook for Chinese automotive aftermarket development?
• What are the key market trends?
• What are the key advantages and disadvantages of the various models of services in the Chinese automotive aftermarket?
• What is the structure of the current Chinese automotive aftermarket franchise channel? Which are the key industry participants?
• How challenging is the competitive landscape?
The research closes with conclusions and a future outlook. China is currently a highly fragmented market with regional variations and absence if any giant franchising corporates that dominate the entire domestic Chinese automotive aftermarket. The market share of franchised model servicing or maintenance shops is likely to surpass that of 4S shops, which charge a relatively higher servicing fee and maintenance cost. Besides, individual workshops will also shift to the franchise model of operating to become competitive.
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