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Auto After-sales Market Booming
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China's roaring automobile market over the past five years has ushered in a boom for related businesses: the auto after-sales and maintenance sector, especially for foreign auto firms.


In 2005 in China, the total value of auto related products reached 42 billion yuan (US$5.25 million) in China, and the maintenance industry hit 40 billion yuan (US$5 billion).


By 2005, there were 300,000 registered auto maintenance enterprises and more than 9,000 auto decoration companies in China.


A survey shows that at present, more than 60 percent of high-end sedan owners take their cars for regular maintenance and decoration. Over 30 percent of economy car owners bring their cars in for services.


The boom has mainly helped foreign players in China, many operating through joint ventures. Since 2005, the auto after-sales sector has been fully open to foreign firms due to China's World Trade Organization (WTO) commitments.


Auto giants such as Volkswagen, Ford and Mercedes-Benz, have all authorized distribution and maintenance to local partners by launching 4S stores, dealing with sales, spare parts, services and surveys.


US auto repair giant ACDelco will have 242 maintenance centres in China by the end of the year, and aims to have at least 1,000 centres before 2010.


ACDelco is the after-sales products and service suppliers under the auto giant General Motors.


World leading diversified technology company 3M is planning 700 professional high-end auto decoration centres and 500 stores in China before 2007. It entered the country in 1994 as an auto-related products supplier.


The US company's products, especially auto glass adhesives, sealants and accessories, are used in most professional Chinese maintenance factories and some 4S stores.


Autobacs, Japan's biggest auto after-sales service supplier has also gained a foothold in this huge potential market.


The company established the wholly owned Autobacs (China) Auto Products Co, Ltd in Beijing last July to better manage its business in China.


By 2005, the company had opened more than 500 stores in Japan. It is planning to open 100 stores in China in five years and hopes to grow further by launching a franchise model.


German-based Bosch, the world's biggest auto spare parts provider, also regards the service network as a shortcut to expand its distribution.


Bosch hopes to expand its maintenance network to 1,500 stores by 2013, covering the whole nation.


Analysts said global operator's expansion in the auto after-sales sector can help stablize the domestic repair and maintenance market and introduce world-leading technology to China.



(China Daily December 13, 2006)


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