The automotive market continues to grow in balance and the auto market will be even brighter

From the development history of China's auto market, China's auto market has entered a period of steady growth since 2010 after more than a decade of rapid growth. In the past 10 years, China's automobile sales volume has increased from 3,792,000 units in 2007 to 28,028,000 units in 2016. It has expanded more than 3 times in 10 years and increased 13.94% year-on-year, ranking the world's largest auto market position for 8 consecutive years. According to the European Association of Automobile Manufacturers (ACEA), the EU’s car sales in 2016 reached 14.6 million units, up 6.8% year-on-year; while the US’s new car sales in 2016 were 17.55 million, up only 0.4% year-on-year. From the perspective of sales volume and growth rate, the Chinese auto market has entered a mature period.

Source: Ruixin Consulting Institute

Comparing domestic vehicle ownership, from 57 million vehicles in 2007 to 193 million in 2016, magnified 3.38 times in 10 years, and the annual growth rate is maintained at more than 10%, according to the Chinese population of 1.382 billion, or 7.16 persons/vehicle . Compared with the most developed United States, the vehicle ownership in 2014 was already 245 million vehicles. At that time, the population of the United States was 319 million, or 1.3 persons per vehicle. Therefore, there is still much room for development in the Chinese automotive market in the future.

From the development status of China's auto industry in the past 10 years and the comparison of developed countries, the auto market will continue to maintain a growth trend in the future and will continue to be the main driving force for global market growth. Perhaps, as predicted by Wang Xia, president of the China Council for the Promotion of International Trade's Auto Industry Committee in 2014, China’s car ownership will surpass the United States in about 2019 and become the world’s number one.

However, it is even more noteworthy that the rapid increase in car sales and the increase in car ownership have driven the booming of the automotive aftermarket. According to statistics, the market size of the automotive aftermarket has increased from 145 billion yuan in 2007 to 880 billion yuan in 2016, which has increased more than 6 times in 10 years, far exceeding the increase in the auto market. It is estimated that it will exceed 1 trillion yuan in 2017.

The data shows that in the developed country market, automobile manufacturing and sales profits account for about 20% of the profits of the entire automotive industry, and parts supply profits account for about 20%. The other 60% of profits are generated in the service sector, while the sales of automobiles in China. Profits accounted for nearly 60% of the total, which is in sharp contrast to mature markets. According to the RMB 0.65 car after-sales service cost per RMB 1 car purchase, the future car aftermarket purchase in 2012-2016 will be up to RMB 2.6 trillion, but according to the 2007-2016 auto aftermarket The annual compound annual growth rate of 22.2% predicts that by 2020 the scale will be less than 2 trillion yuan. Therefore, there is a huge potential for the development of the automotive aftermarket in the future.

Capital is always a prophet. According to statistical data analysis, the investment in the automotive aftermarket in 2014 was 10 times that of 2013. With the development of the auto aftermarket industry itself in terms of service level and service quality, as well as the application of "Internet Plus", it can be predicted that China's auto aftermarket will become the most dazzling gold mine in the entire automotive industry chain.