Digging for second barrel of gold in the auto industry: 200 billion market private enterprises "craze"

According to the profit of 2:2:6, the total profit of China’s auto aftermarket in 2003 should be 215.355 billion yuan. However, due to the fact that China’s auto market has not yet fully started, there is ample room for development.
An unpopular industry that the industry does not care about,
It is becoming another gold mine in the automotive industry.

On March 7, the largest lift production base in Asia has been put into operation in Shanghai. This project is the only listed company in the auto maintenance and testing equipment industry that has entered the international group and has invested RMB 200 million in Shanghai and German LEG.

The massive investment in the lift industry was a step in the plan's adoption of the auto aftermarket, a gold mine that was not discovered by an outsider.

The automotive aftermarket is the market for the follow-up costs related to automobiles that consumers use in the process of using automobiles, including repair, maintenance, spare parts, beauty, refit, and oil services. According to industry experts, "Compared to the cost of buying a car, the subsequent cost of the car far exceeds the cost of buying a car."

In fact, as the earliest domestic professional technology enterprise engaged in automotive diagnostics, testing, and maintenance of technical R&D and product manufacturing, Yuan Zheng has been screaming a fortune in recent years.

Luan Ming, general manager of Yuan Zheng Science & Technology Overseas Marketing Department, revealed that from 1999 to the present, Yuan Zheng Technology's annual growth rate exceeds 100%. In 2002, Yuan Zheng announced that Yuan Zheng’s sales exceeded 150 million yuan and its gross profit margin exceeded 60%. Calculated at an annual growth rate of 100%, Yuanzheng’s sales in 2003 have exceeded 300 million yuan.

Currently, Yuanzheng has a sales service network covering more than 160 countries and regions in the world. At present, it has 19 branches (of which 9 overseas), more than 60 stores, and more than 1,000 dealers (more than 600 overseas). , 15 Authorized Training Centers, 3 Yuanzheng Global High-Tech Demonstration Bases and nearly 20 Global Auto Service Bases have formed a relatively complete domestic and international sales network and a perfect market service system.

The key to the rapid expansion of the Yuan Zheng in a short period of time is that it has a huge cost advantage. The cost of products, including R&D costs, is only 10% of U.S. companies. From a global perspective, in the field of vehicle maintenance and testing equipment, the profit of dealers is maintained at around 10%-15%, providing these dealers with more profit.

Liu Zheng, president of Yuan Zheng Technology, said that this space will reach 20%-25%. At the same time, Yuanzheng itself can maintain sufficient profit margins.

On October 7, 2002, Yuan Zheng Technology successfully listed on the Hong Kong GEM and began to enter the international market. “We have just acquired two companies in the UK and Germany. The purpose of the acquisition is not only their technology, but more importantly, they use the channels they already have to expand overseas markets,” said Yu Ming, general manager of the overseas market department at Yuanzheng Technology.

At present, Yuanzheng has established customer relationships with Beijing Jeep, Tianjin FAW, FAW-Volkswagen, Baoding Great Wall, Shanghai GM Wuling, and Jiangling Auto to develop dedicated automotive diagnostic computers.

Private enterprises impulsively after the auto market

By 2003, the domestic automobile production had reached 4.444 million. According to statistics from the China Association of Automobile Manufacturers, from January to November 2003, the total industrial output value of the auto industry was 854.908 billion yuan, and the total profit was 71.785 billion yuan. The year-on-year increase of 65.4%.

According to the profits of 2:2:6, the total profit of China’s auto aftermarket in 2003 should be 215.355 billion yuan. However, since China’s auto market has not yet fully started, the development space is huge. a little.

Before 1995, in the field of vehicle maintenance testing equipment in the automotive aftermarket, the domestic market was completely occupied by the international brands BOSCH (Germany Bosch) and the United States SNAP-ON.

In 1994, the Liu brothers, who had just earned the first gold from the name card typesetting system, began looking for new development projects. A friend of Liu’s family who had returned from abroad brought back a device for detecting and diagnosing car breakdowns. This kind of equipment was sold in Hong Kong at the time of 60,000 yuan, and it is very popular, but it is still rare in China. This product has brought business opportunities to the Liu brothers.

A year later, Yuan Zheng Technology developed a domestic first-generation automotive diagnostic computer—the 431ME electric eye—with independent intellectual property rights. Today, “Electric Eye” has become synonymous with the industry’s automotive fault diagnostic equipment.

The good cost performance makes Yuanzheng rapidly occupy the domestic market. The best-selling product of Yuanzheng has also begun to attract other domestic enterprises to devote themselves to the production fields of automobile maintenance testing equipment. Veningda is one of them.

Weiningda did computer maintenance before 1997. At that time, computer maintenance was still an emerging industry. In 1997, it began to transform into a car decoder. After six years of hard work, Weining Da has already achieved the first brand in the field of car decoders. Its production and sales volume is 1.5 times that of the Yuanzheng and its sales are over 100 million yuan.

It is not only the Yuan Zheng and Weining Da that have vision. At present, more private enterprises have mushroomed into the automotive aftermarket. Shenzhen Zhengzheng, Shenzhen Weiningda (Jinde), Shenzhen Chuangwei Lian (Chebosch), Beijing Golden Pentium (Golden Pentium), Shanshan Sanyuan (repaired car king), Guangzhou NetEase and other brands are the diagnostic computers. The inspection lines include Shenzhen Dalei Company, Yuanzheng Science and Technology, Chengdu Yalong Equipment Factory, Shenzhen New Yongtong Company, Qinghua Ziguang, China University of Science and Technology West China, Foshan Analytical Instrument Factory, and Zhongda Company.

Many contenders, people smell a hint of gunpowder smell. Yuanzheng declared that its market share of diagnostic computers in the domestic market has reached more than 60%, but Wang Jun expressed doubts about this figure. “According to the figures held by Weining Da, the market share of Yuan Zheng in this field should not exceed 20 percent. % In addition to the Yuan Zheng, Jin De, Jin Pentium, Xiu Xiu, Dr. Che and other four companies have more than 50% of the market share. In this field, no one can say that it has achieved the first, because the market has just begun. Full of variables." Wang Jun said.

The huge market space in the “automotive market” not only created the Yuan Zheng, but also achieved the battle for the private capital of Weining Da, Chuang Wei Lian, and Golden Pentium in this field.

Another pot of gold in the automotive industry

The automotive aftermarket is called by economists the largest profit "cheese" in the automotive industry chain. According to the analysis of the profits of the world’s top 10 auto companies in the last 10 years according to the “Newsweek” and British “Economist” articles, in a fully mature international automotive market, the sales profit of automobiles accounts for approximately 20% of profits in automobile industry, 20% of parts supply profits, and 60% of profits are generated in its service sector.

It is China's auto market that has hidden huge profits. In May 2003, Aode Bucks, Japan's largest car service supply chain, announced that it will formally enter the Chinese automotive service market. Its domestic direct competitor Huang Hat Co., Ltd. also decided to open its first store in Shanghai in Shanghai International Automobile City; and the maintenance chain AC Deco, a subsidiary of the US General Motors Group, had already established it several years ago. In China, we have already installed bureaus in major cities in China. AC Deco claims that in the next two to three years, the company will develop more than 200 car repair chain stores in Shanghai and East China, and become the “Big Brother” of Huadong Car Quick Repair.

According to sources related to the Yuan Zheng, the development goal of Yuan Zheng goes far beyond the research and development of automobile diagnostic equipment. Starting this year, Yuan Zheng will fully involve itself in the field of automobile maintenance services and expand its maintenance chain to become a market for automotive aftermarket. The "Walmart".

Since 2002, the proportion of private car purchases has exceeded 50% for the first time, reaching about 60%. Among them, private car buyers are most active in Beijing, and the proportion of private car purchases has approached 90%. At present, the number of private cars in China has exceeded 10 million vehicles. However, this figure still has a large gap compared with developed countries in Europe and America. At an annual growth rate of 20%, the number of private cars in China will reach 3,600 by 2010. 10,000 cars.

Analyst Zhong Shi, a senior analyst in the industry, believes that the vast majority of domestic auto makers will not make their own products, but order automotive diagnostic equipment from the outside world. This is because, first, the cost of foreign investment in the production of these equipment abroad is not as cheap as in China. Second, if the domestic and joint venture factories only produce for themselves, the output is less than the number of manufacturers who specialize in manufacturing the product, and the unit cost is high, which is not suitable for scale efficiency. This creates business opportunities for domestic brands.

However, some people in the industry believe that the Yuanzheng will continue to expand its market. At present, it still faces two problems. First, technology research and development must respond quickly to market requirements. Foreign companies, joint ventures, and domestic automakers have new models introduced almost every month. The structure and electronic systems of each vehicle are different. Therefore, computer diagnostic equipment needs to be adjusted accordingly. To develop a suitable diagnostic device, Yuanzheng must cooperate with the depot to understand the internal structure of the car, otherwise, it will take a long time for the redevelopment of its own.

"From obtaining information on the models that automakers will launch, it takes about half a year until the successful development of the products. Domestic auto computer diagnostic equipment has a fatal weakness: like pirated software, any one manufacturer has developed a brand of diagnostic computer, and other Manufacturers will be COPY, which is also the core reason why Bosch and other world brands do not want to set up wholly-owned or joint-venture factories in China.” Wang Jun said in a word.