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Car Aftermarket - China - October 2019

“The automobile aftermarket is enjoying stable growth. But competition is also becoming fiercer as car owners start to acknowledge the advantages of channels other than 4S stores. These include franchise auto repair shops, independent shops and even online platforms. Current car owners have a diverse range of information channels available to them. They also show significant divergence in terms of actual usage satisfaction with different repair and maintenance channels. Instead of sticking with the same shop and putting up with something they don’t like, car owners are open to seeking options that are better suited to them. It is important for service suppliers in the automotive aftermarket to rethink and develop more customer-driven strategies, with premium services, standardised quality, and transparent information and price systems.”
– Terence Zhou, Research Analyst

This report looks at the following areas:

  • Premium service opportunities, especially for high-end 4S stores users
  • NEV repair and maintenance market: franchise auto stores and 4S stores battle it out
  • Importance of online information channels and transparency

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Table of contents

  1. Overview

    • What you need to know
      • Covered in this report
        • Definition
          • Excluded
          • Executive Summary

              • The market
                • Size to double in the next five years with a slower growth rate
                  • Figure 1: Chinese car aftermarket, by value, 2015 -19 est
                  • Figure 2: Best- and worst-case forecast of auto aftermarket value, China, 2014-24
                • Companies and brands
                  • 4S stores still dominate but market share fragmented between different car dealers
                    • Figure 3: Top 10 players in automobile aftermarket, by sales value and market share, 2017 vs 2018
                  • Franchise brands are boosting their advantages through standardisation as new forces join the market
                    • Figure 4: Franchise brands and their parent companies
                    • Figure 5: Franchise brands by car manufacturers
                  • The consumer
                    • Average RMB4,749 spent a year on maintenance for cars under 3 years old
                      • Figure 6: Spending on repair and maintenance, July 2019
                    • Greater repair and maintenance bill for NEVs due to high out-of-warranty repair costs
                      • Figure 7: Spending on repair and maintenance, by car energy type, July 2019
                    • Most car owners use 4S stores but only one third stick to 4S stores only
                      • Figure 8: Usage of repair and maintenance shops, July 2019
                    • Online channels, especially portal websites win the highest attention
                      • Figure 9: Information channel, July 2019
                    • Demand for diverse information channels is stronger outside of tier one cities
                      • Figure 10: Information channel, by city tier, July 2019
                    • 4S store enjoys high satisfaction levels for maintenance skills, parts quality and standardised process
                      • Figure 11: Satisfaction level of repair and maintenance shops, July 2019
                      • Figure 12: Satisfaction level of repair and maintenance shops – 4S stores, by spending on repair and maintenance, July 2019
                    • Small difference in satisfaction with repair skills of franchise shops and 4S stores among NEV owners
                      • Figure 13: Satisfaction level of repair and maintenance shops – selected item, by car energy type, July 2019
                    • Online platforms are meeting consumers’ call for transparency in the aftermarket
                      • Figure 14: Tuhu online booking process
                    • Only half of car owners still choose 4S stores for deep maintenance and specialised repair after the warranty period
                      • Figure 15: Choice of car maintenance after the warranty period, July 2019
                    • BEV owners tend to try diverse options for specialised repair after the warranty period
                      • Figure 16: Choice of car maintenance after the warranty period, by car energy type, July 2019
                    • Strong maintenance awareness among surveyed car owners, especially experienced car owners
                      • Figure 17: Attitudes towards repair and maintenance – selected item, by car purchase price, July 2019
                    • Only 3% do DIY maintenance, but more than 20% claim willingness, offering synergy for online platforms
                      • Figure 18: Attitudes towards repair and maintenance – selected item, by selected demographics, July 2019
                    • What we think
                    • Issues and Insights

                      • Premium service opportunities, especially for high-end 4S stores users
                        • The facts
                          • The implications
                            • Figure 19: BMW’s aftermarket service
                          • NEV repair and maintenance market: franchise auto stores and 4S stores battle it out
                            • The facts
                              • The implications
                                • Importance of online information channels and transparency
                                  • The facts
                                    • The implications
                                      • Figure 20: Franchise brands’ mini programs
                                      • Figure 21: BMW maintenance calculator
                                      • Figure 22: Official website of TyrePlus
                                      • Figure 23: Tuhu online booking process
                                  • The Market – What You Need to Know

                                    • Car aftermarket reaches the highest growth rate in the past five years
                                      • Double the size in the next five years with a slower growth rate
                                        • Fairer competitive environment and rising consumer demand
                                        • Market Size and Forecast

                                          • Chinese automotive aftermarket reached RMB1,252 billion in 2018
                                            • Figure 24: Chinese car aftermarket, by value, 2015 -19 est
                                          • Market size to double in the next five years to 2024
                                            • Figure 25: Best- and worst-case forecast of auto aftermarket value, China, 2014-24
                                        • Market Factors

                                          • Policy to make aftermarket more transparent and fairer for all channels
                                              • Figure 26: Provisions on the Administration of Motor Vehicle Maintenance
                                            • Rising car parc builds increased demand for car aftermarket
                                              • Figure 27: Private car parc in China, 2014-18
                                            • Second-hand car market is a potential growth impetus for car aftermarket
                                              • Figure 28: The sales unit and growth rate of second-hand cars, 2014-18
                                            • Higher maintenance costs due to out-of-warranty issues for new energy cars
                                              • Figure 29: Complaints about new energy car quality issues
                                          • Key Players – What You Need to Know

                                            • 4S stores still dominate the market but car dealers’ market share highly fragmented
                                              • Franchise brands bolstering their advantage through standardisation as new forces join the market
                                                • Innovation leads to better resource allocation and more advanced parts technology
                                                • Market Share

                                                  • Car dealers’ 4S stores account for 70% of market share
                                                    • Pang Da Automobile dropped to 9th from 5th last year, while the rest of the top ten kept growing
                                                      • Figure 30: Top 10 players in automobile aftermarket, by sales value and market share, 2017 vs 2018
                                                  • Competitive Strategies

                                                    • Franchise brands are establishing their brand image through standardization
                                                      • Figure 31: Franchise brands and their parent companies
                                                    • Car manufacturers are starting their own aftermarket brands
                                                      • Figure 32: Franchise brands by car manufacturers
                                                    • Internet giants are stepping into the aftermarket
                                                      • Figure 33: Tmall Station
                                                  • Who’s Innovating?

                                                    • Resource-allocation: luxury-focused online platform, integrating resources of 4S stores
                                                      • Innovation in parts: advanced technology applied in auto parts, such as airless tire
                                                        • Figure 34: Airless tire from Michelin
                                                        • Figure 35: REE
                                                    • The Consumer – What You Need to Know

                                                      • Choice of maintenance and repair shops is becoming more diverse
                                                        • Demand for diverse information channels in tier two or lower tier cities
                                                          • 4S stores face challenge of losing customers after warranty
                                                          • Spending on Repair and Maintenance

                                                            • Average maintenance cost on cars within 3 years is RMB4,749
                                                              • Figure 36: Spending on repair and maintenance, July 2019
                                                              • Figure 37: Spending on repair and maintenance, by car purchase price, July 2019
                                                              • Figure 38: Spending on repair and maintenance, by annual driving mileage, July 2019
                                                            • Car owners in tier one and two cities spend more on maintenance
                                                              • Figure 39: Spending on repair and maintenance, by city tiers, July 2019
                                                            • Huge gap in maintenance costs for different car price tiers
                                                              • Figure 40: Spending on repair and maintenance, by car purchase price, July 2019
                                                              • Figure 41: Spending on repair and maintenance, by car purchase price, July 2019
                                                              • Figure 42: Spending on repair and maintenance, by car purchase price, July 2019
                                                            • Higher repair and maintenance cost for NEVs the result of high cost of non-warranty repairs
                                                              • Figure 43: Spending on repair and maintenance, by car energy type, July 2019
                                                          • Usage of Maintenance & Repair Shops

                                                            • Most car owners use 4S stores but only one third stick to just 4S stores
                                                              • Figure 44: Usage of repair and maintenance shops, July 2019
                                                            • 4S stores share similar usage across different city tiers
                                                              • Figure 45: Usage of repair and maintenance shops, by city tiers, July 2019
                                                            • Franchise shops and online platforms have higher usage rate among female car owners
                                                              • Figure 46: Usage of repair and maintenance shops, by car energy type, July 2019
                                                            • Independent auto shop see higher usage rate among owners of lower price cars while franchise stores are more popular among high-end car owners
                                                              • Figure 47: Usage of repair and maintenance shops, by car purchase price, July 2019
                                                          • Information Channels

                                                            • Online channels, especially portal websites win the highest attention
                                                              • Figure 48: Information channel, July 2019
                                                            • Dealers come close second as important source of information, especially for car owners who only use 4S stores
                                                              • Figure 49: Information channel, by usage of repair and maintenance shops, July 2019
                                                            • Demand for diverse information channels is stronger outside tier one cities
                                                              • Figure 50: Information channel, by city tier, July 2019
                                                            • Mass media channels are more favoured by high-end car owners
                                                              • Figure 51: Information channel, by gender, July 2019
                                                            • Official information is more favoured by female car owners
                                                              • Figure 52: Information channel, by gender, July 2019
                                                          • Satisfaction Level of Maintenance & Repair Shops

                                                            • 4S stores enjoy high satisfaction levels for maintenance skills, parts quality and standardised process
                                                              • Figure 53: Satisfaction level of repair and maintenance shops, July 2019
                                                              • Figure 54: Satisfaction level of repair and maintenance shops – 4S stores, by spending on repair and maintenance, July 2019
                                                            • Small difference in satisfaction with repair skills of franchise shops and 4S stores seen among NEV owners
                                                              • Figure 55: Satisfaction level of repair and maintenance shops – selected item, by car energy type, July 2019
                                                            • Independent auto shops enjoy higher satisfaction for cost, location and especially service attitude in lower tier cities
                                                              • Figure 56: Satisfaction level – independent auto shop, by city tiers, July 2019
                                                            • Online platforms are meeting consumers’ call for transparency in the aftermarket
                                                              • Figure 57: Tuhu online booking process
                                                          • Choice of Car Maintenance after the Warranty Period

                                                            • Only half of car owners still choose 4S stores for deep maintenance and specialised repair after the warranty period
                                                              • Figure 58: Choice of car maintenance after the warranty period, July 2019
                                                            • Franchise auto shops more attractive to young female car owners for deep maintenance than other demographics
                                                              • Figure 59: Choice of car maintenance after the warranty period, by gender and age, July 2019
                                                            • Independent auto shops tend to appeal to car owners in lower tier cities for quick repairs after the warranty period
                                                              • Figure 60: Choice of car maintenance after the warranty period, by selected demographics, July 2019
                                                            • BEV owners tend to try diverse options for specialised repair after the warranty period
                                                              • Figure 61: Choice of car maintenance after the warranty period, by car energy type, July 2019
                                                          • Attitudes towards Maintenance & Repair

                                                            • Strong maintenance awareness among surveyed car owners, especially experienced car owners
                                                              • Figure 62: Attitudes towards repair and maintenance – selected item, by car purchase price, July 2019
                                                            • The majority of the market are willing to pay more for better experience, not just high-end car owners
                                                              • Figure 63: Attitudes towards repair and maintenance – selected item, by car purchase price, July 2019
                                                            • Car owners in tier one cities favour online booking systems more
                                                              • Figure 64: Attitudes towards repair and maintenance – selected item, by city tiers, July 2019
                                                            • New energy car owners favour longer period of free maintenance and repair with car purchase
                                                              • Figure 65: Attitudes towards repair and maintenance – selected item, by car energy type, July 2019
                                                            • Only 3% do DIY maintenance, but more than 20% claim willingness, offering synergy for online platforms
                                                              • Figure 66: Attitudes towards repair and maintenance – selected item, by selected demographics, July 2019
                                                          • Meet the Mintropolitans

                                                            • MinTs are more explorative towards maintenance shops than non-MinTS
                                                              • Figure 67: Usage of repair and maintenance shops, by consumer classification, July 2019
                                                            • Although MinTs shows higher maintenance intention than non-MinTs, MinTs prefer to pay for service than DIY
                                                              • Figure 68: Attitudes towards repair and maintenance – selected items, by consumer classification, July 2019
                                                          • Appendix – Market Size and Forecast

                                                              • Figure 69: Total market value of auto aftermarket, 2013-23
                                                          • Appendix – Methodology and Abbreviations

                                                            • Methodology
                                                              • Fan chart forecast
                                                                • Abbreviations

                                                                Car Aftermarket - China - October 2019

                                                                £3,486.28 (Excl.Tax)