"China's auto parts market is experiencing a dramatic transformation and is still far from being mature. During a national seminar on auto parts quality held on April 22, an industry insider described the current state of the market as 'a sentimental fruit'—meaning it’s full of potential but not yet fully realized.
Several breeding grounds for counterfeit products have emerged in the sector. In some people’s eyes, the auto parts market has become a hotbed for fake goods. Ye Berlin, a senior engineer at the National User Committee, emphasized the need for authorities to crack down on substandard products at the source, stating that without such action, low-quality parts will continue to flood the market.
In Ye’s view, the problem stems from a cycle of greed. "Merchants produce and sell fakes to maximize profits, while car owners buy them to cut costs. This creates a vicious cycle where inferior parts keep circulating," he explained. To gain a better understanding of the situation, a reporter from the Financial Times spoke with a car owner in Beijing. The owner admitted that when purchasing parts, he would often ask whether they were original or generic.
Original parts are those produced by the vehicle manufacturer, while generic parts come from third-party suppliers. Typically, original parts are more expensive, but many generic ones are of poor quality. Yang Youcai, vice president of the Kunming Auto Parts Industry Association, noted that most consumers believe original parts are the same as those sold by official service centers. However, reports suggest that the quality of so-called original parts varies widely.
For example, a domestic brand called "Three Filter" can be priced at over 40 yuan at a specialized repair shop, 30 yuan at a general repair shop, and as low as 8 yuan at certain markets. “If this is a qualified product, it might not even cover the cost of materials,†said a representative from the Chengdu Auto Parts Delegation, hinting at the questionable quality of some products.
The competition between independent service providers and 4S dealerships is intensifying. According to Yang Youcai, in Kunming, car manufacturers require 4S shops to occupy at least 10 mu of land, creating a significant barrier for smaller dealers. Experts predict that more 4S dealerships will emerge through franchising, as these shops integrate sales, maintenance, parts, and financial services, closely tied to automakers.
Independent service providers, on the other hand, lack such affiliations and operate with much less strength. While the U.S. market sees 70% of service coming from independent providers, China is following a similar trend. However, the market is evolving, with more private car owners and increased competition likely to lead to larger, more organized chains in the independent sector.
Some experts believe that the two most promising areas for growth are auto supplies and rapid repair services. Yet, the maturity of the Chinese market differs significantly from that abroad. For instance, the top five chains in the U.S. account for over 40% of all auto parts stores.
Despite the challenges, the auto parts market plays a crucial role in enhancing China's global automotive competitiveness. Huo Yiguang, president of the All-China Federation of Industry and Commerce, believes that while some players struggle, the industry needs stronger policies and regulations to address these issues. As the market continues to evolve, finding a sustainable and effective business model remains a key challenge." (532 characters)
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