Given fiercer competition, rising operating costs, significant inventory pressure and other factors, as well as the impact of the emerging e-business mode, the automotive distribution industry is facing an enormous challenge. In 2015, the number of 4S shops in China reduced by 920 year on year, and in the future the number will shrink further, while automotive e-business, automobile supermarkets and other multi-brand automotive business models will grow up, according to new data from Research and Markets.
Amid the weak development of the automotive distribution industry in China, the automotive aftermarket, covering automotive finance, auto repair and beauty and used cars, has sprung up with higher profit margins. In 2015, the overall size of Chinese automotive aftermarket reached RMB2,154 billion (approximately $310 billion USD), of which RMB850 billion ($122 billion USD) and RMB755 billion ($109 billion USD) stemmed from automotive finance and auto repair and beauty, respectively.
In recent years, Chinese car dealers have only garnered the car sales gross margin of less than 5 percent, with an overall downward trend; whereas, after-sales services enjoy the gross margin of above 40 percent. In the face of lower gross margins, massive inventory and the gradual decline in economic benefits, some dealers have to seek further development through mergers and acquisitions, or expansion of the automotive aftermarket, or the combination of online and offline business, or expansion into the field of new energy vehicles, the report shows.
For more information about this report visit: http://www.researchandmarkets.com/research/8ncbhd/china_automotive
