Franchise model sparks auto parts market shake

In 2005, the scale of China's auto aftermarket will reach 97 billion yuan. It is a huge cake before Chinese parts suppliers and distributors, but how to share it has become the biggest problem. At the 2005 China Diesel Vehicles and Accessories Market Summit Forum on July 16-17, the innovation in the marketing model of the auto parts industry became a hot topic in the discussion. "I came here especially from Hangzhou and I mainly came to listen to this (topic)." An import parts dealer said frankly.
His ideas represent the opinions of many auto parts dealers. With the rapid development of the domestic auto parts market, the traditional auto parts distribution model based on wholesale and retail has shown defects such as small scale and irregular management. Exploring new marketing models has become a common problem for manufacturers and distributors. The domestic auto distributors began to actively explore the transition.

Disturbance According to the analysis of BearingPoint Management Consulting, by 2005, the size of China's auto aftermarket will reach 97 billion yuan. The Roland Berger report shows that in 2010 China's auto after-sales service market will reach 190 billion yuan, second only to Japan in Asia, ranking second.
There is a crisis hidden in the huge potential of market development. Since the 90s of last century, the auto parts market has formed a circulation pattern that focuses on wholesale and retail sales. However, with the growth of the total circulation market, this traditional circulation model has revealed many drawbacks, among which the horizontal and horizontal influence of counterfeit and inferior parts is the highest. serious.
In recent years, low-priced auto parts and components that have been circulated through the informal channels from the Middle East, Southeast Asia, etc. have caused a great impact on the domestic auto parts market. Speculation, serial goods and other issues have been banned for many times. “Packing” parts (essentially counterfeit products). The sales of the company have disrupted the normal order of the domestic market. According to senior sources, 30% of the imported auto parts belong to this kind of product, which has seriously affected the sales of auto parts. Toyota's after-sales market has even been drastically reduced, from more than 20 billion market size to more than 7 billion yuan.
The non-standard model has restricted the further development of the auto parts market. Faced with this situation, many parts suppliers and distributors began to explore the transition. "Actually, we have always wanted to organize, but we can't always achieve it. It is not easy to give up the old model. After the organization, what direction should we go? We haven't thought about it yet." One person fought in the auto parts industry. The dealers of seven or eight years have such feelings.
In fact, similar problems have plagued domestic auto parts manufacturers and distributors, but there are already pioneers who are beginning to explore new marketing models and distribution systems.

"Icebreaking" 3 years ago, China United Auto Parts took the lead in implementing a franchise distribution system in China, which led to a marketing revolution in the auto parts distribution industry. Now, our franchise system has begun to take shape, and the franchise has grown to more than 30 stores. This year, it will expand to 40, and it is expected to reach 120 by 2010. Our goal is to build a leading domestic auto parts sales network and develop into the best network system operator in China's auto parts distribution industry." Chang Yan-hsing said in an interview with reporters at the summit forum for diesel vehicles and accessories.
The franchise model has been well-known to the Chinese people, but it is still rare to apply to the circulation of auto parts. "The reason why we chose this model is because we want to cultivate a standardized market. This coincides with the thinking of Denso at that time," said Yan Lixing. As early as 2001, Sawata Kenji, Minister of China's third largest component supplier, Denso Corporation's China Business Promotion Department, met with Yan Lixing, then General Secretary of the National Auto Parts Market Federation, to discuss the circulation of imported accessories. After the two parties reached a consensus step by step, in September 2002, the National Auto Parts Market Federation took Beijing, Xi'an, Shanghai, Hangzhou, Fuzhou, Tianjin and other major members to jointly invest in the construction of the "Zhonglian Auto Parts" company, through acceptance of Japan Denso Co. Under the authority of several well-known auto parts manufacturers, the franchise model was adopted for product sales.
"We have encountered many difficulties in the past few years in our development. Fortunately, we all have come." Yan Lixing mentioned that the development process of China United Auto Parts has a lot of feelings. As the business model is relatively rare in the domestic auto parts industry, China United Auto Parts encountered many problems in the beginning of the franchise that dealers did not understand franchising, but with the increasing popularity of Denso in China and the good demonstration effect of existing franchised stores, etc. , The overall network system of China United Auto Parts has been developing more and more smoothly.
Yan Lixing, who is well aware of the domestic auto parts distribution industry, knows that if any part of the parts circulation runs out of control, the quality of the parts sold to the end customers cannot be guaranteed. Therefore, Zhonglian Auto Parts has formed a marketing strategy that emphasizes the terminal and establishes a maintenance company. A win-win partnership, with reasonable price control and strict system discipline, ensures the quality of accessories in circulation. "For example, during the recent cooperation between CNA and Denso to promote the electric plug-in spark plugs, we are setting up designated installation points in various maintenance companies to directly provide installation services for the owners and maximize the protection of user rights. Product brand."

In the meantime, while China Unicom Auto Parts and Denso are accelerating, other foreign auto parts manufacturers and distributors competing in the same stage are also adjusting the pace of development.
Bosch's auto parts sales in China are mainly carried out through Bosch Trading (Shanghai) Co., Ltd. According to industry sources, although almost half of Bosch's global business comes from independent auto parts dealers, this advantage in China is not obvious. Compared with Bosch's expectations, Bosch is far behind Bosch's OEM. Due to unsatisfactory profits, Bosch intends to slow down the pace of development of the auto repair station. In 2005, it only plans to increase 35 stores. General Manager Andersen of Bosch Trading (Shanghai) Co., Ltd. once said at the Bosch Automotive Professional Maintenance 2005 Annual Meeting that the network development of Bosch Automotive Professional Repair Station is mainly oriented to future-oriented development, including quality and management services. strengthen.
Another multinational component giant, Delphi, is still a newcomer in the automotive aftermarket and does not have its own sales channels. According to informed sources, Delphi had contacts with distributors in the automotive aftermarket in May in Chongqing, Chengdu and Shenyang. Jiang Jian, deputy general manager of Delphi China, once told the media, "We are doing trial work and constantly adjusting the channel model. But one thing is certain, we will not take the direct approach of opening up our own stores and choose to cooperate with powerful distributors. "."
In the more subdivided auto parts field, such as tires, manufacturers compete on the sales channels to reach the point where they are in short supply. In June of this year, Michelin announced in a high-profile the opening of its 200th terminal retail store. It is reported that this measure is done to its competitors to some extent, and has a direct relationship with the events in which Michelin's many franchise stores "goed out" to Goodyear in March this year. Goodyear also responded in early July. By the end of this year, the number of authorized service centers in the country will reach 300.
At the same time that foreign companies exhibited their skills, Chinese auto parts suppliers and distributors were not willing to play a supporting role. According to sources familiar with the auto parts industry, there are already some foreign venture capital investments in contact with domestic distributors, and they hope to flex their muscles in the auto parts distribution industry.
Analysts in the industry believe that the Chinese auto parts market has entered a period of transition. Ups and downs in the industrial chain of auto parts circulation market and changes in the industry itself are becoming driving factors in the development of the industry. With the gradual establishment of the franchise system created by the cooperation of China United Auto Parts and Denso, the revolutionary trend in the auto parts circulation market has begun to take shape. In 3 to 4 years, we will wait and see if there will be a nationwide brand distribution channel similar to Gome.