A Strategic Assessment of China s Light Passenger Vehicle Aftermarket

Transcription

1 A Strategic Assessment of China s Light Passenger Vehicle Aftermarket 9th Edition Summer 2015 Powered by Prepared by: Technomic Asia, Room 701 China Tower 1701 Beijing West Road, Jing an District Shanghai , China Tel: Fax:

2 Introduction While China s automotive industry has begun to slow in terms of new vehicle sales after over a decade of blistering growth, the parts and repair aftermarket has continues to expand more significantly as a result of a larger and older automotive parc. The strong vehicle growth over the last 10 years has created an increasingly sizeable and diverse light passenger vehicle parc which has reached 121 million vehicles and has now gotten the attention of the world s leading parts and service suppliers. In fact, industry players consider that China is well into its aftermarket era an will close the gap with the US market. To support this growth and the ongoing shift in vehicle make-up of the parc, the aftermarket structure and key players will also continue to change and explore new business models to more effectively compete. This growth and dynamism is offering both attractive opportunities and new challenges to foreign companies trying to expand their positions. Light Passenger Vehicle Sales 2014 By Vehicle Classification Light Passenger Vehicle Parc 2014 By Age 6% 3% 12% 32% 44% 59% 44% Low End Mid End High End Luxury 1 to 3 4 to 9 >9 Other dynamics Market is now dominated by private users, many who are first time owners with very little car experience. Significant model proliferation based on new foreign entrants, upgrades of existing models and very active local Chinese vehicle maker expansion. Foreign entrants at multiple levels of the supply chain, from vehicle makers to parts suppliers, service providers and distribution companies. Evolution of branded / all-makes parts, as an alternative to genuine, substitute or fake parts. Trend to localization of parts supply and enhanced price competition. Fragmented repair outlets, with OES still dominating market value. Multiple dynamics in the supply chain at all levels making channel strategy critical to success. as a result, the aftermarket will receive significantly more attention as it reaches viable scale, more attractive vehicle composition and trends to a modern trade structure. About Technomic Asia Technomic Asia is a business and growth strategy consultancy with more than 30 years of experience helping clients plan and execute China growth strategies. Technomic Asia assists companies in entering and expanding their business by providing critical market insight, an understanding of business potential and assistance in designing the optimum strategy for success including both organic and acquisition approaches. Technomic Asia s Steven Ganster is the author of The China Ready Company, a book that details the process to develop a successful China strategy. Please visit our website at 2

3 Need for Analysis The need for objective, quality market insight is apparent Available market data is inconsistent, of poor quality and hard to obtain. As the market grows rapidly, the need to have a solid picture of the existing base market as a forecast reference will be critical including strategic segmentations of the market at all levels. Intelligent and experienced analysis is required. Recognizing this need among its client base, Technomic Asia, in cooperation with IHS Automotive, has developed a special report on China s automotive aftermarket now in its 9 th and enhanced edition, which Provides a logical and clear description of the aftermarket structure in terms of parc, vehicle segmentation and forecasted growth. Quantifies current market size by key areas such as maintenance & light repair, collision, and general repairs. Employs a detailed and built up approach to quantifying and segmenting the market at multiple levels. Portrays the current and evolving service and parts distribution structure as well as key dynamics. Develops a logical forecast to 2019 by vehicle and aftermarket business segment. Presents this insight in a strategic, management oriented format which can be readily used as a planning tool. As a multi-client format, this report provides a very cost effective means of building a foundational market perspective for your ongoing planning initiatives. Program Scope The scope of the program will cover the following aftermarket segments and parameters. Vehicles Vehicle Age Channels Parts & Services Light passenger vehicles (LPV) which include Sedans, SUVs and MPVs as well as microvans (excluding light buses, light and mini trucks), with detailed segmentation into four strategic vehicle classifications by value that correlates to repair activity. Low end (e.g. Xiali TJ/2000) Mid end (e.g. Buick-Shanghai Excelle) High end (e.g. Audi-FAW A4) Luxury (e.g. BMW 5 series) Parc segmented into 3 age groups: 1 to 3 years 4 to 9 years >9 years Full supply chain from parts production to end consumers with both current and future dynamics Maintenance & light repair (MLR), collision, general major and minor repair categories (accessories and car care are excluded) Timeframe 2014 as base year for quantification and forecasts to

4 Objectives and Methodology This report will address the following key topics: An insightful and concise snapshot of China s economy, investment environment, entry considerations and related issues to serve as a backdrop for assessing the automotive aftermarket. A detailed assessment of China s automotive parc in terms of size, vehicle composition, vehicle makes, age and future growth including detailed segmentations and new registration forecasts. Summary view of the total parts and service aftermarket, covering size, segmentation, parts types, age, growth and trends. A description of the maintenance and light repair service market, including services provided, repair frequency, pricing, etc. Current and forecasted 2019 value by vehicle and service type will also be provided. A description of the collision repair market covering the insurance market, accident rates, service providers, repair types/costs, service value, etc. Current and forecasted 2019 value by vehicle type will also be provided. A description of general major and minor repairs covering the engine and other major overhauls as well as minor spot repairs. Current and forecasted 2019 value by vehicle type will also be provided. An evaluation of the parts distribution and supply chain structure describing value chain, all key player groups, auto parts cities, pricing characteristics and future dynamics. Perspective on key opportunities and challenges facing players in China s automotive aftermarket over the forecast period with recommended key strategic issues to consider. To develop the insight in this report, a multi-pronged methodology was implemented covering both primary and secondary research. Vehicle forecast and parc data is provided by IHS Automotive. Comprehensive secondary research covering published material, on-line sources, etc. Industry associations such as: China Association of Automobile Manufacturers Auto After Market Committee of China Association of Automobile Manufacturers China Automotive Maintenance and Repair Trade Association China Auto Part Supplies Market Association Shanghai Automotive Parts Circulating Trading Association Direct interviews with multiple levels of the value chain, covering: Domestic and international parts makers Garage chains (IAM Class 1, 2, 3 and OES) Parts retailers and distributors International service and car care providers Leading vehicle makers Leading local insurance companies, e.g. PICC, Pacific, Ping An Market quantification will be provided by year, vehicle category and repair type using IHS Automotive parc data and segmentation. 4

5 Table of Contents Executive Summary I. Introduction o Objectives 16 o Methodology 17 o Market Segments 18 o Vehicle Group Definitions o Report Organization 26 o Definitions/Abbreviations o Perspective on Findings 30 II. III. IV. China Country Snapshot o A Mixed Profile 32 o Evolution o Urbanization o Household Income 38 o Government Direction o Major Challenges 41 China s Light Passenger Vehicle Parc o Introduction 43 o Assumptions 44 o 2014 Light Passenger Vehicle Parc 45 o 2014 LPV Parc 46 o 2014 Parc by Age o Age by Vehicle Group 49 o Geographic Dispersion 50 o 2014 Parc by Manufacturer 51 o Forecast for New Registrations o 2019 Parc Forecast 57 o Forecast by PC Type 58 o 2019 Forecast by Age 59 o 2019 Forecast by Age by Class 60 o 2019 Forecasted Parc by Manufacture 61 o Future Trend 62 Aftermarket Overview o Introduction 64 o Level of Development o Market Structure 67 o 2014 Market Size 68 o By Repair Type 69 o By Vehicle Group 70 5

6 Table of Contents IV. Aftermarket Overview (Cont d) o By Age Group 71 o Service by Vehicle Group 72 o Service Spend 73 o Spend by Vehicle Group 74 o Parts Types o Parts Suppliers o 2019 Markets 79 o Shifts in Segmentation o Future Service Spend 82 o US Market Comparisons 83 V. MLR Market o Introduction 85 o Definition of Services 86 o Overview 87 o Key Assumptions 88 o Quantification Methodology 89 o Annual Service Costs 90 o Total Market Value in o Segmentation o 2019 Forecast 94 o Forecast by Vehicle Group 95 o Shifts in Segmentation 96 o Shifts in Age 97 o Key Trends 98 VI. Collision Repair o Introduction o Driving Environment o Road Infrastructure 106 o Express Growth 107 o Accident Rates 108 o Congested Spaces for Parking 109 o Motor Insurance Policy 110 o Claim and Repair Process 111 o Vehicle Repair Outlook 112 o Types of collision Repairs o Market Calculation 115 o 2014 Market Size o Repair Provides o Forecast Assumptions o 2019 Forecast 124 o Forecast by Vehicle Group 125 o Forecast by Age 126 o Key Trends 127 6

7 Table of Contents VIII. VIII. IX. General Repair Segments o Introduction 129 o Scope of Repairs 130 o Frequency by Repair Type 131 o Major Repairs/Overhaul o Minor Repairs o Annual Average Vehicle Spend 138 o 2014 Market Size 139 o Segmentation by Age 140 o 2019 Market Forecast 141 o Forecast by Vehicle Group 142 o Shifts in Vehicle Share 143 o Shifts in Age 144 o Key Trends 145 Supply Chain o Introduction 147 o Evolution of Structure 148 o Parts Supply Structure 149 o Channel Characteristics o Players Changing Roles 152 o Parts Production & Trade 153 o Pricing Characteristics 154 o Parts Suppliers 155 o OEM vs OEM Parts Suppliers 156 o Distribution Classification 157 o Auto Parts Cities o Repair & Service Shops o OEM vs. IAM 167 o OES Channel o IAM Channel 170 o E-Commerce 171 o Logistics o Trends Perspective on Opportunities & Challenges o Attractiveness Scale 184 o Addressable Market o Geographic Fragmentation 187 o Distribution Approach 188 o Other Issues

8 Table of Contents Appendix Vehicle Classifications o Low End (L) o Mid End (M) o High End (H) o Luxury (X) Appendix Background on Technomic Asia Appendix Background on HIS Automotive 213 Note: The Table of Contents is subject to minor adjustments 8

9 Report Costs and Format The cost of this report is US$4,900 (or RMB 31,300 which also includes a 3% VAT tax). Payments are to be made by check or wire transfer as below: In US$ by wire: Technomic Consultants Int l (S) P L USD Account No Bank: HSBC Singapore 21 Collyer Quay, HSBC Building Singapore Bank Code: 7232 Swift Code: HSBCSGSG In RMB by Check/Wire: 普纬斯 ( 上海 ) 管理顾问有限公司开户行 : 工商银行上海市久事复兴大厦支行人民币帐户 : The report deliverables will be provided as follows: An electronic PDF file by Yes, I want to purchase the report A Strategic Assessment of China s Light Passenger Vehicle Aftermarket - 9 th Edition Send me an invoice to: Name: Title: Company: Address: Send by: Fax: For more information on purchasing the report, A Strategic Assessment of China s Light Passenger Vehicle Aftermarket 9th Edition, please contact in Shanghai, Eileen Liu at eileen@technomicasia.com or call (86-21) In the USA, Angellia Boey at aboey@technomicasia.com or call