Strategic Analysis of the Chinese Automotive Aftermarket
China will have the world’s largest number of vehicles in operation (VIO) by 2021, making the automotive aftermarket a high-growth industry over the short, medium, and long terms.
Total Automotive Aftermarket: Key Takeaways, China, 2014
The total light vehicles in operation will grow from million in 2014 to approximately million in 2021, eclipsing the forecasted US VIO of million. Manufacturer-level revenue will grow at a compound annual growth rate (CAGR) of % between 2013 and 2021, reaching $ billion by the end of the forecast period.
The average vehicle age is no more than years, generating high demand for routine maintenance parts such as tires, batteries, and wiper blades, among other products.
Traditional aftermarket distribution channels are not common in China. Most garages source products from so-called “auto parts cities,” which are areas featuring groups of small, specialized distributors clustered together, and may include counterfeit components.
Original equipment suppliers (OES), which include automakers and their dealerships, account for almost % of retail service revenue, while independent workshops capture about % of the maintenance and repair business. However, recent regulatory actions by the Chinese government will make the industry more competitive in the coming years for independent workshops and parts suppliers.
Volkswagen and Chinese automakers Wuling and Changan are the largest participants, along with Internet giant Alibaba. eCommerce channels such as Alibaba will play an important role for foreign suppliers to develop brand loyalty with Chinese consumers.
About this report
This research service analyzes the automotive aftermarket in China. It includes vehicles in operation analyses, discussions of key industry trends, and identifies major market participants. In addition, it provides manufacturer-level revenue forecasts and analyses of wholesale parts and service channels. Consumer trends and key conclusions are also presented. The base year is 2014, and forecasts are provided from 2015 through 2021. The vehicle scope is passenger cars and light trucks. The objective is to provide strategic insight for decision makers and potential new entrants. High growth in vehicles in operation will create opportunities for companies to sell parts and service.
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