A Key Growth Driver in Future - China Automotive Aftersales Market: Accenture

 
A Key Growth Driver in Future - China Automotive Aftersales Market: Accenture
China Automotive
Aftersales Market:
A Key Growth Driver
in Future
Introduction
China overtook the United States as the world’s largest
automotive market in 2009 and has maintained its
position for the past seven years. For 2015, total
automotive sales have been estimated at 24 million
units, of which 21 million are passenger vehicles1.
While in absolute terms the numbers seem impressive,
the growth rate in sales has slowed from 9.89% in
2013 to about 3 percent—and the market has entered a
“new normal.”2
This growth trend is reflected in the total number of
vehicles in China. There were an estimated 170 million
vehicles by 2015 end3—with rising vehicle service life.
As a result, the aftersales market—including auto parts
sales, maintenance and value-added services—is
playing an increasingly prominent role in the
automobile industry.
As the competition for new car sales gets fiercer, the
aftersales service market too gets affected. It is
becoming one of the factors critical for closing a sale.
In such a scenario, it is imperative for all players in the
automobile industry to assess the trends and
challenges in aftersales services and devise viable
coping strategies.
This report delves into the trends and challenges in
automotive aftersales and suggests strategies that can
help automotive companies, auto part makers and
aftersales service providers achieve high performance.

“As many as 70 percent of auto distributors
were profitable prior to 2010. Today, however,
the percentage is no more than 30 percent...”
——Luo Lei, Deputy Secretary General, China
Automobile Dealers Association4

                                                              2
The Current Scenario:                                                                                                              7%
Policy revvs up growth
                                                 Unit: billion yuan
                                                                                                                26%
China’s automotive aftersales market was                                                                                                   980
estimated at 700 billion yuan (US$107
billion) in 2015—up 30 percent from the                                                                                  700
previous year. This is in sharp contrast to
the slowing automotive sales growth rate
of 3 percent5 (Figure 1).

“Competition in the
auto market is intense.
4S auto stores are                                                                                       219
                                                                                        168
making money mainly                                                     128
                                                      106
by providing aftersales
services.”
——a general manager                                  2007               2008           2009              2010            2015             2020E

of a Sino-foreign 4S                             Figure 1. China’s aftersales market for passenger vehicles
store6                                           Source: Industry Information; Accenture Analysis Research

Aftersales grabs a larger share of the
auto dealership profits
As the number of vehicles on the road
keeps on increasing, the automobile              Profits in the Chinese automobile                       Profits in the US automobile
aftersales market is expanding. Services                       industry                                             industry
such as parts and accessories, maintenance
and repairs, financial services, insurance,               3%
used cars and retrofit are becoming a                              4%
major source of revenues for dealerships.
Our research shows that automobile                                                                                           16%
                                                        11%                                                     27%
aftersales services account for about 60
percent of the overall profits of dealerships.                             39%
                                                   10%
There is scope for further growth as the                                                                                          22%
aftersales market’s contribution to the                                                                      12%
total automotive profits in China are lower
than those in the developed countries. In                   33%                                                  5%     18%
the United States, for instance, the rate of
contribution is as high as 80 percent.

                                                   Manufacturing of vehicles        Manufacturing of auto parts and         Aftersales services
                                                                                    accessories

                                                   Vehicle sales                    Used vehicle sales                      Other automobile-related
                                                                                                                            services

                                                 Figure 2. Distribution of profits in the automobile value chain: A comparison between China
                                                 and the United States
                                                 Source: Accenture Analysis Research; Industry Information; China Automobile Industry Association

                                                                                                                                                    3
Open door policy helps reduce prices                        workshops and independent service                     These guidelines have led to a decrease in
                                                            operators.                                            the price ratio of auto parts to vehicles for
As the automotive aftersales market
                                                                                                                  all major brands. On January 1, 2015, all
continues to expand, the regulation                      • Original equipment manufacturers
                                                                                                                  Mercedes-Benz retail outlets in China cut
authority is taking proactive measures to                  (OEMs) should provide original parts and
                                                                                                                  prices by 5 to 25 percent7. The opening up
open the aftersales market in order to                     accessories as well as noncertified parts
                                                                                                                  of the automobile aftersales market has
reduce the costs for car owners, and guard                 and accessories with proprietary
                                                                                                                  reduced costs of owning a car and
against monopolistic practices. The regulator              trademarks for aftersales services.
                                                                                                                  stimulated car purchasing. However, this
has issued guidelines for the industry that              • Authorized dealers of auto parts and                   can lead to authorized dealerships losing
stipulate from January 1, 2015:                            authorized service workshops can resell                customers.
• Automobile makers must make technical                    original parts and accessories to non-
  guideline for repair and maintenance                     authorized repair and maintenance
  available to both franchised service                     service operators and end users.

 Anti-monopoly Law of the               China Automobile            The Ministry of Commerce, State               The Ministry of            Ten departments
 People’s Republic of China was         Dealers Association         Administration of Taxation, National          Commerce asked             issued the Guidelines
 introduced to tackle:                  started to investigate      Development and Reform Commission,            China Automobile           for Promoting
 • Monopoly agreements reached          monopolistic                State Administration for Industry and         Dealers Association to     Upgrading of the
   between organizations                tendencies and collect      Commerce, Banking Regulatory                  conduct surveys on         Automotive Repair
 • Abuse of dominant market             related data                Commission, Securities Regulatory             regional monopolies        and Maintenance
   position                                                         Commission, Insurance Regulatory                                         Services Industry and
 • Concentration of undertakings                                    Commission, and another five ministries                                  for Improving Its
   that lead, or may lead to                                        or commissions jointly issued a Plan of                                  Services
   elimination or restriction of                                    Action for Eliminating Regional Blockades
   competition                                                      and Industrial Monopoly

   August 2008                   Since 2013                The end of 2013               March 2014                    May 2014                September 2014

 China Automotive Technology Research Center, in conjunction with China Automotive                      China Automobile Dealers Association
 Maintenance and Repair Services Association and the automobile maintenance and repair and              submitted to the Ministry of Environmental
 insurance industries, held a meeting urging that automobile manufacturers make maintenance             Protection the Suggestions on Dismantling
 and repair technical information publicly available                                                    the Unreasonable Regulation of Cities
                                                                                                        Restricting Entry of Used Automobiles

 The directive stipulated that:                                                      • Allowed authorized parts dealers and authorized repair and maintenance
 • Channel monopoly for auto parts and accessories be broken                           service workshops to resell the original parts and accessories to non-
                                                                                       authorized repair and maintenance service operators and end users
 • Encouraged original parts manufacturers and auto manufacturers to provide
   original parts or noncertified parts with proprietary trademarks for aftersales   • Entitled car owners to the use of parts and accessories of matching quality
   services

Figure 3. Major anti-monopoly laws and regulations introduced by China
Source: Industry Information; Accenture Analysis Research

  Law / Regulation                                       Implications

  Regulation on the Maintenance and Repair               • Automobile manufacturers and their authorized aftersales service workshops shall not refuse to
  of Automotive Vehicles                                   provide quality assurance to vehicles which are not maintained at the franchised workshop
                                                         • Consumers have the option to use original auto parts and accessories from authorized
                                                           manufacturers or those of matching quality for maintenance or repair services

  Administrative Methods for Publicizing                 Automobile manufacturers shall make publicly available online technical information on maintenance
  Automobile Maintenance and Repair                      and repair for the brands they sell, including information on regular maintenance and repair,
  Technical Information                                  assembly, and installing and uninstalling of parts and accessories

  GB/T 32007-2015 Unified Coding and                     The unified coding and identification for auto parts will enable consumers to check and track the
  Identification for Auto Parts                          information needed for parts or accessories

  The rules for commercial automobile                    The automobile insurance market will undergo changes in terms of both size and operating models
  insurance will be reformed and piloted in 12
  provinces, including Tianjian, Guangdong
  and Xinjiang Uygur Autonomous Region

Figure 4. Some auto aftersales services regulations effective from January 1, 2016
Source: Industry Information; Accenture Analysis Research

                                                                                                                                                                     4
New entrants and innovative                      With the entry of external capital, advances       more than 20 million every year. Also, the
business models                                  in Internet technologies and the                   average service life of passenger vehicles in
                                                 government’s efforts to promote                    the Chinese market is more than 4.2 years,
The automotive aftersales market in China,
                                                 entrepreneurship and innovation, many              and a growing number of vehicles will retire
which was dominated by automotive and
                                                 innovative business models have come to the        from service in the coming years. Our
parts makers, is now being liberalized.
                                                 fore, including aftersales services delivered      research indicates that the average spending
Among the dominant players are Shanghai
                                                 through an online-to-offline (O2O) model.          on maintenance and repair services by car
Automotive Group’s Chexiangjia Automobile
                                                 For instance, Tuhu and Yangche51 are               owners in 2014 increased by 50 percent over
Service Company, Bosch Car Services,
                                                 emerging asset-light O2O ecommerce                 the previous year.
Michelin Tyreplus Auto Supplies Company
                                                 platforms providing automobile aftersales
and Anji Yellow Hat, an independent                                                                 Since an increasing array of products and
                                                 products and services.
aftersales service operator.                                                                        services becomes available in the auto
                                                 According to statistics of China Automobile        aftersales market and services provided by
This scenario is in sharp contrast to those
                                                 Dealers Association, the number of                 4S stores often carry high price tags,
prevailing in developed markets. For
                                                 investments in the automotive aftersales           authorized dealerships are losing their
instance, in the United States, independent
                                                 market in 2014 was 10 times that in 2013.          market shares. According to currently
aftersales service operators account for 60
                                                 Market participants from outside the               available data, the dealerships are losing 30
to 70 percent of the market share, while
                                                 automotive industry focus on frequently            percent of their customers every year, and
authorized 4S stores account for 30 to 40
                                                 used, highly standardized auto parts and           the customer churn rate is growing by 3
percent.
                                                 accessories, often with free service and low       percentage point every year.
However, in recent times, enterprises from       price offers, therefore quickly capturing a
                                                                                                    The longer the service life of vehicles, lower
outside the automobile industry are making       high market share in a niche product area.
                                                                                                    the dependence of car owners on the 4S
inroads into the market. For instance, Baidu,
                                                 Customers are more demanding, and                  stores. As the service life of vehicles in China
Alibaba and Tencent are directly or indirectly
                                                 ready to switch dealerships                        averages at around four years, consumers
providing automotive aftersales services or
                                                                                                    are becoming less dependent on services
participating in the construction of sales       The customer demand for automotive
                                                                                                    provided by 4S stores and increasingly
channels.                                        aftersales services is continuously increasing.
                                                                                                    switching to independent or niche service
                                                 There are approximately 170 million vehicles
                                                                                                    operators.
                                                 in China, a figure that is expected to grow by
“The goal of the Alibaba
automobile division is                             Year
to make the cars more                            11
user-friendly and
affordable and a more                            10
enjoyable possession
for car owners.”                                  9

                                                                                                                              Expected to
——Mr. Wang Licheng,                               8                                                                           reach five years
                                                                                                                              in 2016
General Manager,                                  5
Alibaba Automobile
Division 8                                        4

                                                  3

                                                  0

                                                             Average vehicle life in China

                                                 Figure 5. Service life of vehicles in China
                                                 Source: Industry Information; Accenture Analysis Research

                                                                                                                                                    5
The Future Scenario: Gearing                    “…but any legislation aims to protect consumers’
up for standardization,
digitalization and on-demand                    legitimate rights and interests, balance the auto
service                                         maker-dealer relationships, and maintain fair
Increasing market size and profit
                                                market competition…. China should step up its
contribution                                    efforts to establish rules of the game for the
The automotive aftersales market in China
is expected to see high growth and reach 1
                                                auto sales market, introduce measures for
trillion yuan (US$154 billion) by 2020. Its     preventing dealer monopoly, and further improve
contribution to the total profits of the
automobile dealerships too will keep rising.
                                                the existing laws and regulations for the
It is estimated that aftersales services will   industry.”
account for about 80 percent of the overall
profits of automotive dealerships.
                                                ——Huang Yonghe, China Automotive Technology
Further opening of the market
                                                and Research Center9
The automotive aftersales market will
further open up thanks to a series of policy
changes. Some of the major changes that
are expected include:
• Automotive suppliers shall not fix prices     Certification and management of
  or impose restrictions on minimum             auto parts and accessories of same
  prices of parts and accessories.              quality
• Automotive makers shall not restrict          Both the industry and consumers are in
  franchised dealers and maintenance and        favor of certification of automotive parts
  repair service workshops from reselling       and accessories of matching quality. Its
  parts and accessories for the purpose of      implementation will mark a crucial step
  performing maintenance and repair             toward further opening up the automotive
  services.                                     aftersales market.
• 4S stores shall be allowed, conditionally     In September 2015, Alibaba Automobile
  or unconditionally, to resell parts and       Division joined hands with a total of 12
  accessories to the aftersales market.         leading global automotive parts suppliers
                                                (including those of Bosch, Shell, Exxon
• Automotive manufacturers shall not
                                                Mobil and Federal Mogul) to launch a
  restrict parts suppliers from selling
                                                platform for certification of auto parts10.
  products with full or partial intellectual
                                                The platform, the first of its kind in China,
  property rights.
                                                will enable consumers to access auto parts
• Aftersales parts and accessories              and services of assured quality at
  suppliers, and maintenance tools and          affordable prices.
  diagnostic equipment operators shall be
                                                Certification of auto parts is expected to
  allowed to use their proprietary
                                                be adopted more widely and recognized by
  trademarks in selling their products.
                                                more consumers. This could lead to
• Franchised dealers and aftersales service     industry leaders cornering a large chunk of
  workshops shall decide whether to adopt       certification qualifications.
  the original parts or accessories, based
  on their technical judgment.
We believe that the timelines for
implementation of the related laws and
regulations for the automotive aftersales
market as well as the extent to which
these will be implemented will be closely
watched by the various stakeholders in
order to adjust their business strategies
well in time.

                                                                                                    6
New technologies and increasing                    In addition, although automotive              anywhere and anytime. As a result, the
importance of data analytics                       manufacturers and dealerships have huge       automotive aftersales market may have to
                                                   amounts of customer data, day-to-day          make changes in product and service
New technologies or applications such as
                                                   data uses are often based on data of one      offerings, such as body and interior
Internet of Vehicles, mobile Internet, Big
                                                   to six months. As a result, a substantial     maintenance, more customized and value-
Data and online payment technologies will
                                                   proportion of these data resources remains    added services.
take the aftersales market to the next level
                                                   idle and untapped. We believe that going
of growth. In addition, the continuous                                                           As a matter of fact, many entrepreneurial
                                                   forward participants in the aftersales
development of new energy-powered                                                                startups in the market are differentiating
                                                   market will attach greater attention to
vehicles will facilitate the use of innovative                                                   themselves by meeting consumers’
                                                   data, and market leaders will place more
technologies such as Over the Air (OTA).                                                         personalized demand by, for example,
                                                   emphasis on harnessing the power of Big
                                                                                                 providing on-site quick repair/maintenance
Data is the basis for new technologies or          Data in an effort to achieve precision
                                                                                                 services anytime these are requested.
applications to generate value. It is              services to gain competitive advantages.
                                                                                                 BMW has also upgraded aftersales services
imperative to establish uniform data
                                                   Changes in consumer demand                    by launching the remote delivery of cars in
standards for the aftersales market. On
                                                                                                 multiple cities, highlighting its pledges of
September 17, 2014, GSI China and China            As the automobile consumption keeps
                                                                                                 convenience, trust and care.
Automobile Dealers Association signed an           increasing, consumer demand for
agreement on jointly undertaking the               aftersales services tends to become more      Apart from convenience, there may be a
project of applying GSI standards in the           heterogeneous. Also, the proportion of        gradual shift from mileage-based
automobile maintenance and repair service          young automobile owners is expected to        maintenance services to on-demand
industry. By adopting GSI standards for            grow. Younger consumers often prefer          service based on a vehicle’s actual
automobile parts and accessories, the              personalized products and services over       functional status. Such a shift will
project will accelerate development and            the standardized and undifferentiated. This   undoubtedly rely on Big Data analysis of
widespread application of Big Data and             is especially so in the Internet age as new   consumer behavior and vehicle conditions.
ecommerce platform technologies in the             technologies and applications, including
industry. This will lay the foundation for         social media apps, foster the demand for
opening up of the aftersales market.               personalized consumer experience

                                              Age structure of passenger vehicle owners in China
45
                         Increasing proportions                                             Decreasing proportions
40

35

30

25

20

15

10

 5

 0
        Born in the 1990s            Born in the 1980s           Born in the 1970s         Born in the 1960s          Born in the 1950s
                                                                                                                         and 1940s

     2009        2012           2015

Figure 6. The evolving trends of the age structure of passenger vehicle owners in China
Source: Industry Information; Accenture Analysis Research

                                                                                                                                           7
Adoption of new technologies
  Age groups                  Most salient characteristics of demand
                                                                                                Internet technologies should be
  Millennials                 Expected to be more diversified and personalized…
                                                                                                adopted across the board to achieve
                                                                                                “Internet + Aftersales Service”
  Born in 1990s               Personalized, experience-driven, convenient, interactive…         Aftersales service providers should aim for
                                                                                                full integration of online and offline
  Born in 1980s               Personalized, experience-driven…
                                                                                                channels for differentiated product and
                                                                                                service areas, including:
  Born in 1970s               Services that are one-stop and high quality…                      • Auto parts and accessories: Establish
                                                                                                  ecommerce platforms for conducting
                                                                                                  exhibitions, consulting services,
  Born in 1960s               Services that are professional and high quality…
                                                                                                  transactions, quality assurance and
                                                                                                  payments.
  Born in 1950s or 40s        Services that are professional and affordable…
                                                                                                • Maintenance services: Provide online
                                                                                                  standardized and customized solutions
Figure 7. Differences in demand of passenger vehicle owners of different age groups               based on product information and
Source: Industry Information; Accenture Analysis Research                                         customer and maintenance data, so that
                                                                                                  customers can choose from a variety of
                                                                                                  services with varying service standards,
                                                                                                  locations and times. This will increase
O2O commerce to gain momentum                      • To strengthen competitiveness of local       customer stickiness and reduce churn rate.
                                                     brands (this is important for Chinese
As the name suggests, O2O commerce                                                              • Value-added services: Provide customized,
                                                     automobile brands to establish
represents the integration of online and                                                          homogenous services online and offline
                                                     themselves in the global market).
offline business models in the virtual and                                                        based on customer data, such as
real worlds. Since 2014, most startups in          According to Accenture research, in the        scheduling appointments, consulting,
the automotive aftersales industry,                short term, the competition among              placing orders and return visits.
including Tuhu and Carparts, have been             different participants lies in operational
built on the O2O model, with a focus on            efficiency, but in the medium and long       Market participants could integrate these
tires and gasoline and other frequently            term, it lies in the business models.        online platforms to create synergy and
used, highly standardized parts and                Therefore, in order to build up their        enhance customer experience, in line with
accessories. With the aid of Big Data              competitive advantages, service operators    their operation and strategic goals.
analytics, the O2O model will enable               should focus on a number of strategic        Adoption of data analytics to
aftersales service operators to cover more         goals consistent with market conditions      maximize the value of data
of this category, the current market for           and development of new technologies.
                                                                                                Based on analysis of product and customer
which is quite dispersed. This will have a
                                                                                                data, businesses can provide auto parts
profound impact on the aftersales service
                                                                                                and services as an integrated package to
industry.                                         “Profit comes from                            customers in order to be more competitive
In addition, with the development of the
sharing economy, more car owners will
                                                  value-added services,                         and reduce the costs of car owners. Cross-
                                                                                                industry research has shown the strategy
seek users. Automotive aftersales service         including automobile                          to be effective. In the printer industry, for
operators may create a wealth of service
models by capitalizing on the O2O model
                                                  financial services,                           instance, some leading enterprises have
                                                                                                transformed their business model from one
to link together car owners and users.            insurance, boutique,                          of selling products to one of selling

Recommendations: Igniting                         used cars and so on. As                       printing services based on printing
                                                                                                frequencies, thus eliminating competition
growth and powering digital                       we can see, all 4S                            from printer accessory manufacturers and
                                                                                                improving competitiveness. Accenture has,
In developed countries, the aftersales            stores are in a process                       through Big Data analysis, assisted its
service sector forms a stable source of
profits in the automotive value chain. As
                                                  of transformation. This                       customers in the automobile industry in
                                                                                                enhancing operational performance by
the aftersales market in China becomes            is necessary for                              offering the following strategies:
larger and more competitive, some leading
players are taking effective strategic
                                                  survival…”                                    • Design for maintenance.
measures:                                                                                       • Differentiated pricing of auto parts and
• To make dealer networks sound and
                                                  ——A dealer of a                                 accessories.
  stable.                                         German automotive                             • Planning and dynamic management of
                                                                                                  logistic networks for auto parts and
• To improve the end consumer                     brand11                                         accessories.
  satisfaction.
                                                                                                • Inventory management of auto parts and
                                                                                                  accessories.

                                                                                                                                             8
Transformation of business models                                                                                   Inventory management
                                                 Development of auto parts        Marketing of auto parts           of auto parts
Building auto aftersales service and
channel brands. Automobile
manufacturers can establish independent
                                                 • Design for maintenance        • Branding                        • Planning of logistic
aftersales service brands with                                                   • Targeting                         networks
differentiated pricing schemes to reduce                                         • Benchmarking                    • Optimization of logistic
the costs of car owners and the customer                                                                             networks
                                                                                 • Differentiated pricing
churn rate. In 2015, Shanghai GM                                                                                   • Inventory management
purchased AC Delco’s China business, with                                                                          • Planning of information-
plans to combine the business with its own                                                                           based management
                                                                                                                   • Information systems
independently operated chain of repair                                                                               development and
stores, in a bid to strengthen the                                                                                   implementation
competitiveness of its aftersales service
networks12. In October 2015, Ford Motor
                                               Figure 8. Select Accenture services for automotive aftersales services
Company announced in its “2020 Vision”
that it would partner with Chang’an Ford
4S stores in establishing Quick Lane outlets
in China designed to provide quick services
to consumers who are Ford vehicle
owners13.                                                   A higher-order operational model of an aftersales service operators
This business model has precedents. In                                     in the consumer electronics industry
response to competition in the Japanese
auto aftersales market, in 1996, Toyota,
Denso, and Aisin Seiki established a joint
venture for developing franchised                    Aftersales service                    Service provider’s               Consumers
                                                        contractors                             website
aftersales service networks through JMS
stores (Joyful Motorist Shop). Franchise
JMS stores are funded by Toyota
dealerships, and the auto parts sub-stores                                          Accessories warehouse
under their umbrella are designed to
enhance their price competitiveness14.
Aftersales service outsourcing.                       Accessories supply and demand                             Accessories returns
Automotive aftersales services can be
outsourced, partially or entirely, to
specialized, independent aftersales service                                                 Logistics
operators. This improves operational
efficiency, lowers operational costs and
increases competitiveness. It is a                                                        Accessories
widespread practice in the household
appliances and mobile phone industries to
outsource aftersales services for the entire                                                                   Compensation claims
industrial value chain to independent
aftersales service operators.
                                                            Original equipment                                Maintenance and repair
Outsourcing experiences of the consumer                    manufacturer/vendor
electronics industry suggest that
outsourcing in the automotive aftersales
                                                 Contractor operations        Service operator’s operations
service industry may cover a variety of
services, including parts and accessories
                                               Figure 9. Illustration of aftersales service outsourcing in the consumer electronics industry
planning, warehousing, distribution,
transportation, inventory management,          Source: Industry Information; Accenture Analysis Research
maintenance and repair services, and
management of consumer complaints and
claims. Through outsourcing, automobile
manufacturers will have more resources to
devote to branding, improving personalized
services and augmenting consumer
experience.

                                                                                                                                                9
Separation of sales and aftersales             The next three years will be a crucial
services. With rapid development of            period for transformation of China’s
ecommerce for the automobile industry,         automotive aftersales market. For
the asset-heavy 4S stores are facing big       traditional automobile manufacturers,
challenges. China’s top three online           meeting customer needs accurately and
platform-based automobile retailers, Yiche,    efficiently by using new technologies and
Autohome and Tmall, sold a record number       innovative business models will hold the
of 139,000 vehicles on Singles Day             key to building quality, competitive
(November 11), 2015. Among them,               aftersales services.
Autohome achieved 40 percent increase
                                               For independent aftersales service
over the same day of the previous year15.
                                               operators, who face an increasingly open
The O2O sales model, more transparent          market and expanding consumer demand,
vehicle prices and increasingly homogenous     fostering and making the best use of their
product offerings are forcing physical 4S      unique competitive strengths (such as
stores to focus their attention on providing   convenience, affordability and deep
unique consumer experiences. Although          customization) will be critical in beating
currently there are about 450,000 motor        competition.
vehicle maintenance service operators in
                                               For venture capital-supported, O2O
China, only 5 percent are 4S stores16.
                                               platform-based aftersales service
Therefore, OEMs can, with a view to
                                               operators, maximizing their advantage of
maximizing the efficiency of the use of
                                               asset-light operations and using the
resources, separate traditional sales and
                                               Internet and other new technologies to
aftersales operations of 4S stores into two
                                               construct their own monopolistic aftersales
independent categories of business:
                                               service platforms or ecospheres will be
• Sales: Reduce the number of physical         crucial.
  auto showrooms and focus on collection
  and management of sales leads,
  customer experience and membership
  management, by leveraging Internet,
  virtual reality and other technologies.
• Aftersales services: Integrate internal
  and external resources to focus on
  maintenance and repair services, auto
  parts sales, car trade-ins and customer
  relationship management.
4S stores and car makers can adopt flexible
business models for two independent
business divisions of sales and aftersales
services. For instance, the two divisions
can serve a single automobile brand or
multiple brands separately or
simultaneously. They can involve a single
investor or multiple investors. The
separation of a sales division and an
aftersales division will enable 4S stores to
switch to operational models that are
asset-light, cost-effective and highly
efficient.

                                                                                             10
References
1、2
      China Association of Automobile Manufacturers
3
    Traffic Management Bureau of the Public Security Ministry, P. R. China
4
     http://auto.huanqiu.com/roll/2015-08/7310888.html
5
    http://auto.gasgoo.com/News/2015/01/28074750475094.shtml
6
     Accenture interview
7
     China Daily, http://www.chinadaily.com.cn/hqcj/xfly/2015-01-16/content_13054101.html
8
     http://www.evlook.com/news/guonei/content-8336.html
9
     http://www.cnautonews.com/tebd/201409/t20140901_323299.htm
10
     http://www.cnautonews.com/qchl/ds/201509/t20150923_425062.htm
11
     Accenture interview
12
     http://auto.sohu.com/20150820/n419319076.shtml
13
     http://auto.sohu.com/20151027/n424268091.shtml
14
     http://www.cnautonews.com/jxs/j_jj/201509/t20150918_424429.htm
15
     http://www.cheyun.com/content/8518
16
     http://auto.gasgoo.com/News/2015/10/15081735173560346977830ALL.shtml

                                                                                            11
Authors                                                  About Accenture
John Shen                                                Accenture is a leading global professional
Managing Director, Accenture Strategy,                   services company, providing a broad
Greater China                                            range of services and solutions in
john.j.shen@accentuer.com                                strategy, consulting, digital, technology
                                                         and operations. Combining unmatched
Xiaoming Liu                                             experience and specialized skills across
Director, Accenture Strategy,                            more than 40 industries and all business
Greater China                                            functions—underpinned by the world’s
xiaoming.a.liu@accenture.com                             largest delivery network—Accenture
                                                         works at the intersection of business and
                                                         technology to help clients improve their
                                                         performance and create sustainable value
                                                         for their stakeholders. With approximately
                                                         373,000 people serving clients in more
                                                         than 120 countries, Accenture drives
                                                         innovation to improve the way the world
                                                         works and lives.

                                                         Accenture has been operating in Greater
                                                         China for more than 25 years. Today, the
                                                         Greater China practice has more than
                                                         11,000 people serving clients across the
                                                         region and has offices in Beijing,
                                                         Shanghai, Dalian, Chengdu, Guangzhou,
                                                         Shenzhen, Hong Kong and Taipei.

                                                         For more information about Accenture,
                                                         please visit its corporate homepage
                                                         www.accenture.com and its Greater
                                                         China homepage www.accenture.cn.

Legal Disclaimer: This document is proprietary to Accenture. This document is only for information purposes
and the users of this document shall use or refer to this document entirely at their own risk, with no
recourse to Accenture in any manner whatsoever. Accenture makes no representation or warranty as to the
completeness or accuracy of the information contained in this document. All conditions and warranties
whether express or implied by statute, law or otherwise, are hereby excluded. Accenture disclaims any and all
liability for any or all claims or losses whatsoever or howsoever caused, arising from reliance in any way on
any part of this document or by anyone who may be informed of any of its contents. Each recipient or user
is entirely responsible for the consequences of its use, including any actions taken or not taken by the users/
recipient based on this document.

Copyright © 2016 Accenture
All rights reserved.

Accenture, its logo, and
High Performance Delivered
are trademarks of Accenture.
                                                                                                                  12
You can also read
NEXT SLIDES ... Cancel