According to market research data, as of June 2024, the number of motor vehicles in China has reached 440 million, and the number of motor vehicle drivers has exceeded 530 million. It is predicted that China's automotive aftermarket will maintain steady growth in the next few years, with an annual growth rate of about 8%.
Analysis of external drivers
According to the annual development report of China's automotive aftermarket (passenger cars), the external drivers of China's automotive aftermarket mainly come from the macro and meso levels, of which the macro drivers include but are not limited to policy, economy, society, technology and other aspects; At the mesoscopic level, it is driven by the industry, mainly affected by the upstream vehicle market and industrial funds.
Policy factors
Since 2004, the Chinese government has introduced a series of strong policies to promote the development of the new energy vehicle (NEV) market. For example, the New Energy Vehicle Industry Development Plan (2021-2035) aims to establish China's leading position in global electric vehicle technology. This not only promotes the sales of new energy vehicles, but also drives the demand for related aftermarket parts and services, bringing new growth points to the automotive aftermarket.
Increasingly stringent environmental policies are driving automakers and aftermarket suppliers to pay more attention to sustainability, driving demand for environmentally friendly components and remanufactured products, and promoting the development of the green aftermarket.
In addition, the new energy vehicle industry policy, consumption stimulus policy, second-hand car policy, etc., directly affect the purchase, use and elimination of automobiles, and change the ownership and market structure of the automobile aftermarket. For example, policies such as subsidies for the purchase of new energy vehicles have promoted the increase in the number of new energy vehicles, thereby expanding the demand for new energy vehicle aftermarket services.
Figure: Year-on-year changes in the retail value of automobiles, furniture and entertainment in China (2002-2023) (information source: National Bureau of Statistics, iFinD, Hejun Consulting and analysis)
Economic factors
Consumer market recovery: In the post-epidemic era, China's consumer market has recovered well, service consumption has picked up rapidly, and residents' per capita service consumption expenditure has increased, providing a good consumption environment for maintenance, beauty and other service consumption in the automobile aftermarket.
Adjustment of consumption structure: Although the demand for large amounts of consumption has been weak since 2018, the consumption of automobile goods has rebounded slightly after 2021 due to factors such as the development of new energy vehicles and the liberalization of the epidemic, and consumers' demand for the automotive aftermarket has also changed, extending from simple maintenance to more diversified services.
Socio-cultural factors:
Consumption habits: Chinese consumers are increasingly inclined to shop online, and according to statistics, the number of online shopping users in China has exceeded 900 million in 2023. This has given impetus to the growth of e-commerce in the automotive aftermarket. Consumers can more conveniently purchase auto parts and maintenance supplies through online platforms, prompting aftermarket companies to expand online sales channels and improve online service capabilities.
Figure: Changes in the scale of online shopping users and the proportion of online retail sales of physical goods in China (unit: 100 million people) (information source: China E-Commerce Research Center)
Consumption concept: Consumers' concept of car use has gradually changed from "owning" to "using", and the rise of new travel modes such as shared travel has increased the frequency of vehicle use, which in turn has led to an increase in the demand for vehicle maintenance and maintenance. In addition, consumers' demand for personalized and intelligent configuration of automobiles is also growing, which promotes the development of market segments such as car modification and intelligent electronic equipment.
In addition, the vigorous development of China's IP industry has led to the rise of the IP co-branding model. IP co-branding has become an important marketing tool for consumer brands. According to the incomplete statistics of the DT Research Institute, the product categories involved in IP co-branding include coffee beverages, catering food, shoes and clothing, beauty and skin care, life services, digital electronics, personal care and home cleaning, pets, home furnishing, automotive aftermarket and other fields, among which the IP co-branded products purchased by consumers are mainly coffee, food, etc., and the future trend of consumerization and personalization of automotive aftermarket products is obvious, which may become an important battlefield for IP co-branding.
Related:
Analysis of the 2024 China Automotive Aftermarket Annual Development Report (1)
Analysis of the 2024 China Automotive Aftermarket Annual Development Report (2)
Analysis of the 2024 China Automotive Aftermarket Annual Development Report (3)
