Antitrust Policy Promotes Fair Competition in Automotive Aftermarket

In 2015, the anti-monopoly storm continued to escalate, and the automobile maintenance industry ushered in a continuous push of policy. On September 28, 2015, eight ministries and commissions including the Ministry of Transport, the Ministry of Environmental Protection, the Ministry of Commerce, and the State Administration for Industry and Commerce jointly issued the "Administrative Measures on the Implementation of Open Maintenance of Automobile Maintenance Technical Information (Draft for Solicitation of Comments)" (hereinafter referred to as "Measures") to require automobiles. Producers disclose maintenance technical information of the sold cars to maintenance operators, consumers and related operators, thereby breaking the 4S shop's technical monopoly in this field and breaking market unfair competition.

Sales and maintenance channels in the automotive aftermarket
Sales and maintenance channels in the automotive aftermarket

China's auto aftermarket has always been a hot gold market (1108.20, 2.00, 0.18%). According to public information, the number of motor vehicle maintenance companies nationwide reached 460,000, of which there are more than 20,000 auto 4S shops, accounting for 5%.

However, this 5% car 4S shop accounted for 70% of the repair market share. Insiders believe that the closure and unfairness of vehicle maintenance information is the culprit of unfair competition in the current auto repair market.

Industry profits return to rational return

In China's auto repair market, the dominance of 4S stores has become an indisputable fact.

According to public information, the current market share of more than 100 million vehicles and the increase in the number of new cars each year of more than 20 million vehicles have become a solid foundation for the Chinese automobile aftermarket. The monopoly of resources for vehicle maintenance, original spare parts , and parts and components has become a “benefited” advantage for 4S shops that are authorized to operate. The 4S shop maintenance channel has become a common channel recognized by consumers, and maintenance costs naturally rise.

However, due to the lack of legal channels, it is difficult for the maintenance factory operating independently by the society to obtain the original spare parts resources and professional maintenance technologies, leading to unfair competition in the vehicle maintenance market.

Recently, the reporter met Mr. Wang, who came to maintain his car in a 4S shop in Beijing, Guangying. Mr. Wang told reporters that he always repairs and maintains the car at the manufacturer’s designated 4S shop, and maintains the brand 4S shop. The quality and accessories guarantees are still very reliable, but I feel that the price is indeed unfair. If you choose to maintain outside the social maintenance plant, once the problem occurs, the manufacturer is not responsible, so he can only swallow.

Mr. Wang's words can be said to represent the voice of most car owners, but in the near future, the inconvenience that car consumers believe may be forever in the past.

According to the Measures, each automobile producer shall, before December 31, 2015, file with the Ministry of Transport the relevant information on its vehicle maintenance technical information disclosure. For the open maintenance of technical information within six months from the date of listing of the new vehicle, automakers shall use the information available, convenient information channels, and reasonable information prices to make no difference, non-discrimination or non-discrimination to all maintenance operators and consumers. The maintenance technical information of the car models sold shall be disclosed in a delayed manner; the technical barriers shall not be excluded or restricted by competition, and the market for car maintenance shall be blocked or monopolized.

As for the new policy on the disclosure of vehicle maintenance information, Han Chunhui, an associate professor of the Law Department of the National School of Administration, explained his views when interviewed by reporters. Han Chunhui believes that the new regulations will enable consumers to have more information rights and make supervision more available. Consumers' awareness of rights protection is spontaneous. Now that they are implemented through the rules and regulations, they actually give consumers a very favorable weapon. At the same time, they force the contractors of the auto service industry to implement policies in accordance with the law.

Han Chunhui further explained that the introduction of the New Deal has also accelerated the reorganization of the automobile maintenance industry resources in a certain sense. Unreasonable maintenance prices will lead to poor customer orientation. The more open and transparent the industry resource reorganization, the better the service awareness, the stronger the company's viability. In addition, the disclosure of information itself will also promote the entire automotive maintenance industry to better optimize service awareness and change the abnormal situation of shopkeepers and diners that commonly existed between 4S stores and passengers.

It seems that the era of huge profits in the auto aftermarket has passed, and the profit space is returning rationally.

Several happy families

With the gradual liberalization and disclosure of auto parts control and vehicle maintenance technology information, the automotive aftermarket will usher in major reforms, major innovations, major adjustments, and major changes, and the auto market will also face restructuring.

Han Chunhui said with emotion: "As a distributor, there may be a pain in the short term, because they have become accustomed to gaining huge benefits in the black-box and undisclosed process. They will worry that the new regulations will lead to the diversion of the service market. There is no authorization for the periphery. For auto service companies, they are relatively stable."

In accordance with the requirements of the new regulations, after opening up maintenance information and technology held by authorized dealers or repair stations, consumers are free to choose the location of maintenance or non-original accessories of the same quality, no longer limited to experience services in 4S stores. , enriched the diversity of consumer choices.

At the same time, policy orientation and consumer habits will bring huge market opportunities to the maintenance companies operating independently in society, and aggravate industry competition and reshuffle. In the long run, the maintenance of information disclosure is conducive to promoting the standardization of post-sales maintenance of 4S stores, so that the entire industry will become bigger, stronger, and healthy in an open, transparent and affordable way.

Chen Dongsheng, executive vice president of the China Strategic and Emerging Industries magazine of the National Development and Reform Commission and secretary-general of the China Strategic Emerging Industries Alliance, also said in an interview with reporters that there are no mature markets for mature consumers, and in an immature market, according to the law, Operators are hardly protected.

Chen Dongsheng believes that the new regulations are also positive for 4S stores. 4S shop was originally an authorized party, in fact, there is no absolute right to speak. Now after the introduction of the new policy to further standardize the automotive aftermarket, 4S shop has a protection from the policy, you can discuss cooperation with manufacturers within a legal framework. The model allows the entire vehicle maintenance industry to be more rationalized under the legal framework.

“In addition, the new regulations also provide a market space for manufacturers producing genuine products and accessories.” Chen Dongsheng said that in the face of new regulations, dealers should not be pessimistic, but should think about how to embrace information disclosure. Embrace this wave of new markets. Future market opportunities will not only be limited to the 4S store sales system, but other models such as comprehensive repair shops, chain maintenance systems, professional maintenance shops will also usher in unprecedented opportunities for development.

Chen Dongsheng admits that the dealer's so-called "protection" is not normal. After opening up the market, the distributors also have their own advantages, such as the mastery of technology and the reputation of the brand. Through information disclosure, dealers can only increase their standardization services and increase price transparency so as to obtain greater opportunities to occupy the lead plane in the initial stage and have greater room for development.

In addition, it does not rule out that dealers will increase the independent maintenance system outside the 4S shop.

"Actually, China's maintenance system lacks an intermediate in addition to 4S stores and social maintenance companies. If there is an intermediate, the car repair service market will be more scientific." Chen Dongsheng believes that building a Chinese automobile repair service complex A single industry chain will help consumers have more choices and will make 4S stores have a better transition.

Institutional transformation requires multiple efforts

All along, the monopoly of maintenance information has seriously hindered the healthy development of the automotive aftermarket. The disclosure of information technology for automobile maintenance has sounded the clarion call for the auto industry to eliminate monopoly. However, the "sunshine sunshine" depends on the support of the overall environment. There are many factors for the transformation of the system into timeliness, including the continuous improvement of the specific details of the guidelines, the strict enforcement of the regulators, and the establishment of a social credit system.

Auto Industry analyst Zhong Shi said in an interview with reporters that from a logical point of view, the progress of the automobile maintenance industry, consumers are undoubtedly the biggest beneficiaries. The more open the market is, the more consumers can enjoy affordable, high-quality services. However, the current guidance is only on paper. It remains to be seen whether this policy can be implemented and whether it can be implemented continuously and effectively.

"If it is only a bright article, if the relevant rules cannot be implemented or the implementation is not effective, the new regulations will be ineffective and the haze of the auto repair market will be difficult to expel." Zhong Shi told reporters.

Chen Dongsheng believes that promoting the widespread use of “maintenance technology information” and injecting new business dynamism into the company will certainly play a positive role in the transformation and upgrading of the national maintenance industry. The landing of the policy requires the joint efforts of all parties in society. In particular, it requires consumers to proactively put forward a long-cherished wish after the introduction of laws and regulations, use rules and regulations to defend their rights, and thus force the market to accept and implement this standard.

“But consumers will also wait and see. If the competition is fierce enough, the maintenance price of the 4S shop will come down, and the price will also come down after fully opening up. Now everyone thinks that the price is expensive and the competition is not enough. After the introduction of the new regulations, the 4S shop is uniquely gifted. 'The advantage of full play, then 4S shop may be more dynamic.' Zhong Shi said, precisely because of this, the 'approach' is particularly concerned about the introduction. With the implementation of favorable policies, "breaking ice" in the maintenance industry is just around the corner.

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