When will spare parts bid farewell to the high price era?

Since 2015, relevant national departments have successively issued policies to create a series of new-government portfolios, changing the long-standing 4S shop parts and accessories prices in the auto after-sales industry, and the current situation of opaque pricing, in an attempt to break the market structure dominated by OEMs.

Anti-monopoly forced OEM to cut prices

Qiu Baochang, head of the China Consumers' Association’s lawyers’ team, believes that at present, the prices of parts and accessories for many dealers are still high, which is due to the monopolistic supply of parts by manufacturers and dealers have no right to speak. Some parts originally required only 50 yuan for a single change, but manufacturers have asked consumers to switch to a group and the price will be as high as 500 yuan. This replacement model leads to a monopoly on parts prices.

In fact, as early as 2014, the National Development and Reform Commission carried out a survey on the monopoly of the automotive industry, interviewed numerous car companies, and confirmed that some car companies have monopoly laws such as horizontal restrictions, vertical restrictions, and abuse of market dominance. At the same time, luxury brands proactively announced that they have significantly reduced the price of original spare parts.

Previously, Mercedes-Benz had taken the initiative to lower the maintenance menu, the average price adjustment rate of 20%; Volvo's vehicles after the replacement of all vulnerable parts enjoy 24 months warranty service, and all the original parts, basic maintenance costs and wearing parts replacement costs It has also been adjusted downwards.

Although the current OEMs have actively reduced the prices of some models, the zero-to-zero ratio is still not low. It is widely believed in the industry that the ratio of zero to the whole is usually 3:1 in the world. Therefore, it is speculated that dealers have the opportunity to purchase and sell high-quality and low-cost spare parts, and the price of after-sale accessories will also be reduced accordingly.

It is worth noting that the auto dealers are expected to have a chance to breathe freely after the OEMs cut their prices. According to Jia Xinguang, an automotive analyst, the current domestic 4S store is dominated by brand licensing operations, with a single store implementing a single brand operation and unified management by a car dealer. The current 4S store model has developed to its peak period. In the future, more policies need to be loosened to support the diversified development of car sales models. As the monopoly structure is broken, the automotive circulation market is expected to change the current imbalance in resource allocation.

Maintenance can be multiple choice

Starting from January 1 this year, new regulations for many automotive industries, such as the “Regulations on the Administration of Motor Vehicle Maintenance” and “Administrative Measures on the Implementation of Automobile Maintenance Technical Information,” have been implemented. The new regulation states that any mandatory actions that must go to 4S stores for repairs and maintenance are all violations. The revised new rules advocate that the owner of the vehicle can freely choose the maintenance party. Except for the defect recalls specified by the automakers and the quality of the auto three-packs, any act of mandatory designation of maintenance parties is a violation.

At the same time, the “Administrative Measures for the Implementation of Automobile Maintenance Technical Information Disclosure” stipulates that an open system of China’s automobile maintenance technology will be established in the future to break the technical barriers. This means that perhaps the technical advantages of the auto 4S shop will also be lost.

Jia Xinguang believes that after the revision of the management measures, it has increased dealers' speaking rights and improved the flexibility of the operation. It can also provide dealers with reasonable profits through sales and services and improve the dealers' operating conditions. The dealer will not become a hypermarket or a comprehensive repair shop. "Because future professionalism is still very important, if dealers get a reasonable profit, they will be more professional in doing their own brand 4S shop." Jia Xinguang said.

The reporter visited the auto market and found that dealers have not been greatly affected in terms of maintenance. A person in charge of after-sales service in a 4S store stated that the implementation of the policy requires a certain period of time. Due to problems such as the consumption habits, the policy impact in a short period of time is limited.

In this regard, Qiu Baochang believes that with the deepening of the anti-monopoly, the new anti-monopoly rules that are plagued by automobile sales and sales will also be gradually introduced. The price chaos in the auto repair market is also difficult to expel in the short term, which also requires strict enforcement of the supervision and establishment of a social credit system.

Homogeneous accessories want to break the price of ice

With the disclosure of technical information on vehicle maintenance, the newly issued "Uniform Coding and Identification of Auto Parts" has cleared the promotion barriers for homogenous parts. Previously, the non-4S shop's deputy parts, if they meet the requirements, will also be considered as homogenous parts, as a way to break the monopoly of repair parts channels, promote the transformation of the automobile repair industry, and enhance the quality of automotive service tools.

According to official data, homogenous accessories refer to accessories that have the same or higher product quality than loading standards and have good loading performance (original parts). Its quality is matched with the standard of original parts, and its quality, structure, manufacturing and functional standards are also equal to or higher than the original parts, but the price is much cheaper.

At the end of last year, Car-Worry-Free Network became the first automotive after-market e-commerce company that was authorized by the China Association of Automobile Maintenance Traders and obtained the qualifications for the operation and circulation of homogenous accessories. This marks the first stage of the development of homogenous accessories across the policy and formally enters into a substantive promotion phase.

Wei Tongwei, secretary-general of the China Automobile Maintenance Industry Association Auto Repair Parts Working Committee, told Beijing Business Daily that the promotion of homogenous parts requires three major steps. The first step is to establish a unified code and product traceability system for auto repair parts. The second step is to strengthen quality standards. The implementation of testing certification; the third step, to create a reliable car accessories brand, promote the industry certification mark. “If consumers do not purchase genuine parts at the 4S shop, the original free maintenance benefits will also come from law enforcement agencies to safeguard the interests of consumers.” Wei Tongwei said.

A survey by the reporter found that the price of homogenous accessories is currently up to 40% cheaper than that of 4S stores, but current service providers, including parts dealers and maintenance companies, have no incentive to promote homogenous parts.

Caring for the worry-free CEO Chen Wenkai said that the introduction and promotion of homogenous parts will go from the government's policy level first, demonstrating the importance of the issue at the national level, but how to make consumers accept homogenous parts as soon as possible, and bring in fake and inferior parts. In front of high-margin profits, homogenous accessories are prevented from reaching consumers through layers, and consumers can easily identify authenticity, which directly affects the market performance of homogenous accessories. "The fair competition of various related platforms and the choice of consumers are the key to solving the chaos of spare parts prices," said Chen Wenkai.

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