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Vast aftermarket to develop in China

Monday, December 21, 2015 - 09:00
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Year-end reports for 2015 in the media bemoaned the economic slump in China, especially concerning the drop in new car sales. However, Chinese consumers still have spending power and the explosion of vehicle sales in China will create a vast automotive aftermarket well into the future.

Currently in China, motorists have two choices for their personal vehicle’s repair and maintenance – an overpriced dealership channel or “back alley” repairs using unreliable, counterfeited parts and untrained mechanics.

Clearly, Chinese motorists need a reliable, alternative source for automotive service and parts. The seeds are planted in China for a surge in the independent automotive aftermarket (IAM).

China is experiencing all the factors that a locally based IAM is best positioned to serve. Its car parc consists of a vast number of makes and models of widely varying ages. Its consumer base has discovered the freedom of individual transportation, and the government is responding with improvements to the highway and transportation systems beyond its highly populated coastal regions.

Clearly, China is ready for a strong, growing independent aftermarket where vehicle owners have local access to variety of choices, quality products and convenient service. Consumers are demanding replacement products that are of consistently high quality, are easily available, and are professionally installed. Most importantly, its motorists want to have confidence in the performance and safety of the replaced parts and repair service.

The time is ripe for the development of a strong sustainable aftermarket in China. A successful Chinese aftermarket will be dependent on the establishment of a strong business model: one that provides high-quality products and accessible product information for fitment and installation.

Many members of the Automotive Aftermarket Suppliers Association (AASA) have huge investments in China with local operations that can support its emerging aftermarket. These members have established China sales and marketing structures to serve aftermarket along with local manufacturing/sourcing – along with their expertise from successful North American and European aftermarkets in establishing a reliable aftermarket service channel in China. These suppliers have the proven quality products and innovation the Chinese consumer wants and the resources to develop successful business models in China’s aftermarket.

The development of China’s IAM will require the establishment of policies to ensure an open market for consumer choice, brand protection for suppliers and involvement with multi-national channel partners to develop an effective supply chain.

AASA has the connections to global industry leaders and is committed to bringing together all industry partners to develop a vibrant aftermarket in China. To view AASA’s latest updates from China, visit www.aftermarketsuppliers.org.

Editor’s note: Jay Burkhart is AASA vice president, chief strategy officer and executive director of the AASA China Aftermarket Office. Based at the global headquarters of the Motor & Equipment Manufacturers Association (MEMA) 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 AASA China Aftermarket Forum (CAF) is a peer group comprised of members of the AASA 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 exclusively serves manufacturers of aftermarket components, tools and equipment, and related products that support 710,000 employees in the United States. AASA promotes 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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