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China’s aftermarket positioned for explosive growth

Friday, July 24, 2015 - 07:00
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The well-documented explosion of light vehicle sales in China will create a vast aftermarket and opportunities for aftermarket suppliers.

The initial beneficiaries of China’s growing aftermarket will be the OEMs, OE service and single-make channels, but the seeds are there for a surge in the independent aftermarket (IAM), according to Automotive Aftermarket Suppliers Association (AASA) analysis. China’s aftermarket growth will be driven by the diversity of makes and models in the market, its gradual aging fleet, its used car market and motorists’ adoption of vehicle usage/maintenance routines.

However, the key driver will be the manufacturers that committed to China’s aftermarket development. As part of its strategy in China, AASA has developed “China Vision – 2025,” which includes:

·      A robust, growing independent aftermarket where vehicle owners have local access to a variety of choices of quality products and convenient service outlets.

·      Replacement products that are of consistent quality, are readily available, and are professionally installed.

·      Motorists who have the confidence in the performance and safety of the replaced parts.

AASA strategy includes key pillars for a robust sustainable IAM. These must be developed as the fleet on the road reaches critical mass:

·      Consumer choices for auto care over the life of vehicle

·      IP protection for products and brands; eliminate counterfeiting

·      Products of consistent high quality that function as expected

·      Accessible product information for fitment and installation

·      Local inventory available through a reliable supply chain

·      Skilled technicians at convenient repair shops

Multi-national suppliers have significant investment in China: local operations to support OEM and aftermarket; China sales and marketing structures to serve aftermarket; and local manufacturing/sourcing for export to aftermarkets in the West. These global suppliers bring their experience from successful North American and European aftermarkets and quality products and innovation for Chinese consumers. Global suppliers also have the resources to develop successful business models in the China aftermarket.

AASA’s role is to represent the collective supplier group, based on its dedication to a robust industry that enables members’ business success. AASA is focused on China’s aftermarket reaching its business potential while serving Chinese motorists.

To assist its member companies that have a long-term presence in China, AASA formed China Aftermarket Forum (CAF) in 2005 – the only aftermarket executives’ council of its kind in China. This year, AASA has established its China Aftermarket Office in the MEMA China Center in Shanghai to serve as a unified platform for its strategic plan. Dr. Yilong Chen has joined as managing director of the MEMA China Center, providing a strong profile and extensive technical expertise.

The AASA China Aftermarket Office will provide global support from experienced global aftermarket executives and strong industry outreach to key constituents in China. We will drive the development of the fundamentals for a robust IAM in China.

For more information about the AASA China Aftermarket Center and the CAF, contact jburkhart@aasa.mema.org.

Editor's note: Jay Burkhart is AASA vice president, chief strategy officer and executive director of the AASA China Aftermarket Office. Based at MEMA’s global headquarters in Research Triangle Park, N.C., Burkhart provides strategic guidance and global aftermarket direction to Dr. Yilong Chen, managing director of the new MEMA China Center in Shanghai, also the location of the AASA China Aftermarket Office. Burkhart recently joined AASA after 16 years with Federal Mogul, including the role of senior vice president, global aftermarket. He also previously served as vice president of global marketing at Tenneco Inc.

The China Aftermarket Forum is a peer group comprised of members of the Automotive Aftermarket Suppliers Association with operations in the People’s Republic of China. Its mission is to support the growth of member companies’ business within the Chinese automotive aftermarket. The CAF accomplishes this mission through offering opportunities to meet with peers and other selected constituencies, facilitating collaboration among the members, and representing member interests via coordinated member participation in relevant industry groups.

AASA (www.aftermarketsuppliers.org) exclusively serves manufacturers of aftermarket components, tools and equipment, and related products that support 710,000 employees in the United States. AASA is a recognized industry change agent – promoting a collaborative industry environment, providing a forum to address issues and serving as a valued resource for members. AASA is the light vehicle aftermarket division of the Motor & Equipment Manufacturers Association (MEMA).

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