As one of the pillar industries of the country, today, China’s automotive industry is the world’s biggest vehicle market. With 9% growth from 2015 to 2016, the sector clocked the sales of more than 28 million units by the end of the year with an expected output of 30 and 35 million by 2020 and 2025 respectively. The ‘Made in China 2025’ initiative shifts the focus from the country’s low-cost mass manufacturing strategy to more value-added advanced production methodology in 10 sectors including emerging automotive market in China and has its share of opportunity and challenges.
• Electric Vehicle Market – China’s electric vehicle industry offers significant opportunity for foreign automakers with a niche in this technology with a target of 5 million electric/hybrid vehicles on the road by 2020. It promises to bring down air pollution and energy consumption as compared to its traditional counterparts.
• After Sales Market – Currently, China’s aftermarket sales constitute merely 20% of the total revenue from the car accessories and spare parts as against 60% in the Western markets. It presents a major opportunity for the increased aftersales market in future. Along with it is the expected growth in the aftermarket solutions in China.
• Smaller & Cheaper cars – The emerging automotive industry in China is focusing on smaller and cheaper cars with also the stress on lightweight vehicles.
Besides these factors, there are opportunities such as rising market for used cars as well as recreational vehicles. There are plans to promote Vehicle Power Batter development and charging pillars which will further boost the electric vehicle industry in China..
• Efficient Dealer Network – The rapid expansion in many OEMs’ business in past few years has led to clumsy and inefficient dealership network with either very high or extremely scarce dealer-density in a few cities. It ultimately ends up in reducing their margin due to unnecessary competition and finally results in a dealer’s bankruptcy in the event of lack of financial support from the OEM. A state-of-the-art Dealer Management System is the answer to this problem.
• Changes in consumption behavior – In the past few years, declining stock-markets, increasing house prices, demanding customers and the overall fiercely competitive market is affecting China’s high-end automotive market and significantly pressurizing the dealers by reducing their margins.Efficient dealer management software china can come to their rescue by providing optimum pricing strategy and thereby enable optimization of their margins and profits.
• More informed Customers – Today’s customers have the technology at their disposal. They rely on the internet to get the lowest transaction price amongst various dealers. Digitization of DMS can help dealers provide the real-time data to his customers and help them stay one step ahead of his counterparts.
With a handful of challenges to overcome, China’s emerging automotive market offers a range of opportunities. Taking them in stride would help the country achieve its goal in the near future