What is the next generation distribution model for China’s Automotive Aftermarket?

In late 80’s, to cope with the demand of completed and in-time supply of spare parts, entrepreneurs in China developed a distribution model for aftermarket---Spare Parts City. Through sharing the assets and market knowledge, they found a way to cope with the shortage of resources, such as money for huge inventory, customer base, product knowledge, and research development for new products.

However, since the beginning of 21st century, demand side of aftermarket is under continuous changes. New modernized passenger cars are changing the structure of the growing car parc. The growing middle class is changing the profile of car owners. The old distribution model, the supply side of the market, met the unsatisfied demands recently: not transparent prices, counterfeit parts, not good enough service……

Those challenges are calling for a whole new business model which can transform the distribution of spare parts. We believe US’s specialized franchise model suits the current China’s market. In US aftermarket, 4-S system only occupies 20% of the distribution business. The rest of the business is occupied by franchise such as AutoZone, NAPA, etc. Most of the franchises are specialized in one or two product groups to form their own competitive edge, such as Engine Repair, Brake System Repair, etc.

For more detailed data and argument, please refer to the following website:
http://auto.gasgoo.com/News/2009/02/12093657365754066232_3.shtml