China’s increasing vehicle parc places its market in the growth column of the global automotive aftermarket, according to a presentation at the Automotive Aftermarket Suppliers Association (AASA) China Breakfast and Briefing on Dec. 8, an inaugural event hosted by AASA and its China Aftermarket Forum (CAF) during Automechanika Shanghai.
“While the new China vehicle growth rate is slowing, the large and growing China vehicle parc needs servicing,” said Steve Handschuh, president and COO of AASA, in his presentation at the event. “This is evidenced by the strong aftermarket growth of our CAF members. In a recent survey of market trends, our members reported aftermarket growth has averaged 30 percent over the last seven quarters,” he explained.
The Breakfast and Briefing also included presentations by Gary Locke, the U.S. Ambassador to the People’s Republic of China, who discussed globalization and cooperation, and Alex Ashmore, director, Aftermarket Asia Pacific, TRW Automotive. The event was organized by the AASA China Aftermarket Forum, which includes representatives of top international automotive aftermarket suppliers who manage their respective companies operations in China.
“China’s vehicle parc growth has been phenomenal – 15 million in 2000 to 78 million in 2010, according to research from LMC and Ward’s Automotive,” Handschuh noted. While its vehicle parc grew 27 percent from 2000-2010, growth is expected to slow to 15.8 percent from 2011 to 2015. (Technomics Asia, Automotive News China)
Future growth of the Chinese vehicle parc provides good prospects for the aftermarket, Handschuh said. Based on research by Ward's Auto and JD Power/LMC, its vehicle population is predicted to grow from the current 78 million vehicles to 185 million in 2015 and reach an estimated 381 million by 2025.
“As the Chinese parc ages, so will its need for a healthy independent aftermarket,” Handschuh explained. “According to our annual ‘Automotive Aftermarket Status Report,’ franchised dealer share of China’s vehicle repair and maintenance currently is 61 percent. However, 60 to 80 percent of older Chinese sedans are serviced by the independent aftermarket,” he said. “As China transitions to a mature auto sector, the aftermarket will grow larger than the OE supply sector,” Handschuh added.
A healthy Chinese independent aftermarket will bring significant benefits, Handschuh noted. “These benefits include a larger, more competitive market, localization of production (necessary for quick market response time), local employment and increased consumer choice,” he said.
A growing automotive aftermarket also will benefit China’s economy. “Aftermarket companies and their future prospects will result in Chinese growth, tax revenue and employment,” Handschuh stated.
According to the AASA China Aftermarket Forum Member Trends Survey for the fourth quarter 2011, AASA aftermarket supplier member companies in China expect a very positive 2012. “Our members predict 29 percent growth in passenger vehicle parts and 18 percent in commercial vehicle sector,” Handschuh said.
“Despite strong growth, our aftermarket supplier member companies’ China operations face significant challenges,” he added. As reported in the AASA CAF Member Trends Survey, these pressures include:
• Accurate forecasting
• Counterfeit parts
• Price pressure
• Economic conditions
• Distribution channels
• Price of raw materials
• Employee retention
• Lack of skilled labor
PAGE 3
“The AASA CAF was formed to assist members in addressing these challenges by creating a forum for open discussions,” Handschuh said. The CAF’s key initiatives include its quarterly “How’s Business” member trends survey, market research, customer/distribution chain, trade show evaluations and coordination, anti-counterfeiting, aftermarket career image, remanufacturing and employee retention.
“Automotive aftermarket companies, including members of the AASA China Aftermarket Forum (CAF), make significant contributions to the economy of the People’s Republic of China,” Handschuh noted in his presentation. “The Chinese aftermarket is obviously an important market with strong growth prospects and stronger growth opportunities than OE in the near term.”
The AASA China Breakfast and Briefing was sponsored by Ernst & Young and Polk. To view the photo gallery from the event, click here.
China’s increasing vehicle parc places its market in the growth column of the global automotive aftermarket, according to a presentation at the Automotive Aftermarket Suppliers Association (AASA) China Breakfast and Briefing on Dec. 8, an inaugural event hosted by AASA and its China Aftermarket Forum (CAF) during Automechanika Shanghai.
“While the new China vehicle growth rate is slowing, the large and growing China vehicle parc needs servicing,” said Steve Handschuh, president and COO of AASA, in his presentation at the event. “This is evidenced by the strong aftermarket growth of our CAF members. In a recent survey of market trends, our members reported aftermarket growth has averaged 30 percent over the last seven quarters,” he explained.
The Breakfast and Briefing also included presentations by Gary Locke, the U.S. Ambassador to the People’s Republic of China, who discussed globalization and cooperation, and Alex Ashmore, director, Aftermarket Asia Pacific, TRW Automotive. The event was organized by the AASA China Aftermarket Forum, which includes representatives of top international automotive aftermarket suppliers who manage their respective companies operations in China.
“China’s vehicle parc growth has been phenomenal – 15 million in 2000 to 78 million in 2010, according to research from LMC and Ward’s Automotive,” Handschuh noted. While its vehicle parc grew 27 percent from 2000-2010, growth is expected to slow to 15.8 percent from 2011 to 2015. (Technomics Asia, Automotive News China)
Future growth of the Chinese vehicle parc provides good prospects for the aftermarket, Handschuh said. Based on research by Ward's Auto and JD Power/LMC, its vehicle population is predicted to grow from the current 78 million vehicles to 185 million in 2015 and reach an estimated 381 million by 2025.
“As the Chinese parc ages, so will its need for a healthy independent aftermarket,” Handschuh explained. “According to our annual ‘Automotive Aftermarket Status Report,’ franchised dealer share of China’s vehicle repair and maintenance currently is 61 percent. However, 60 to 80 percent of older Chinese sedans are serviced by the independent aftermarket,” he said. “As China transitions to a mature auto sector, the aftermarket will grow larger than the OE supply sector,” Handschuh added.
A healthy Chinese independent aftermarket will bring significant benefits, Handschuh noted. “These benefits include a larger, more competitive market, localization of production (necessary for quick market response time), local employment and increased consumer choice,” he said.
A growing automotive aftermarket also will benefit China’s economy. “Aftermarket companies and their future prospects will result in Chinese growth, tax revenue and employment,” Handschuh stated.
According to the AASA China Aftermarket Forum Member Trends Survey for the fourth quarter 2011, AASA aftermarket supplier member companies in China expect a very positive 2012. “Our members predict 29 percent growth in passenger vehicle parts and 18 percent in commercial vehicle sector,” Handschuh said.
“Despite strong growth, our aftermarket supplier member companies’ China operations face significant challenges,” he added. As reported in the AASA CAF Member Trends Survey, these pressures include:
• Accurate forecasting
• Counterfeit parts
• Price pressure
• Economic conditions
• Distribution channels
• Price of raw materials
• Employee retention
• Lack of skilled labor
PAGE 3
“The AASA CAF was formed to assist members in addressing these challenges by creating a forum for open discussions,” Handschuh said. The CAF’s key initiatives include its quarterly “How’s Business” member trends survey, market research, customer/distribution chain, trade show evaluations and coordination, anti-counterfeiting, aftermarket career image, remanufacturing and employee retention.
“Automotive aftermarket companies, including members of the AASA China Aftermarket Forum (CAF), make significant contributions to the economy of the People’s Republic of China,” Handschuh noted in his presentation. “The Chinese aftermarket is obviously an important market with strong growth prospects and stronger growth opportunities than OE in the near term.”
The AASA China Breakfast and Briefing was sponsored by Ernst & Young and Polk. To view the photo gallery from the event, click here.
