Today, there are more than 1 billion vehicles on the road globally, 70 percent of which are outside the U.S. Vehicle parc growth rates are three times higher outside of the U.S. and European Union.
Global thinking is core to success in today’s automotive aftermarket. Many members of the Automotive Aftermarket Suppliers Association (AASA) are multinational companies that have been doing business overseas for a generation. Today, virtually all suppliers are expanding their production, sourcing and selling around the world.
This is especially true in China, where there are already 120 million cars on the road. In the near future, there will be more cars on the road in China than in the United States. China’s vehicle parc includes an increasing variety of makes and models, which will age. A used car market is being created as well. All of these factors equate to a great available market for maintenance and repair.
The long-term development of the aftermarket in China is viewed as a huge opportunity. The key now is the development of a sustainable profitable business model to service this opportunity, and parts manufacturers are the key to this development.
China’s vehicle owners need maintenance and repair service. They need local access to a variety of choices of quality products and convenient service outlets; replacement products that are of consistently high quality, are easily available, and are professionally installed; and confidence in the performance and safety of the replaced parts and repair service.
The distribution of auto parts as well as vehicle repair service can be significant contributors to employment and gross domestic product as China shifts to a more balanced economic model. A new rulebook is evolving in China to ensure an open repair market and move away from the OEM-dominated model of the past.
AASA and its China Aftermarket Forum (CAF) are working in China to monitor the regulatory process and, where possible, shape new guidelines for the aftermarket. As part of this effort, we have developed a strong relationship with the Auto Components workgroup of the European Union Chamber of Commerce (EUCC) in China. AASA and CAF are collaborating with EUCC on a common global industry position regarding the opening up the independent aftermarket in China.
The CAF has provided support and networking to its members’ local aftermarket executives for more than a decade. Through the MEMA China Center and its director, Dr. Yilong Chen, we provide on-the-ground support for business development in China.
Editor’s note: Jay Burkhart is AASA vice president, chief strategy officer and executive director of the AASA China Aftermarket Office. Based at the global headquarters of the Motor & Equipment Manufacturers Association (MEMA) in Research Triangle Park, N.C., Burkhart provides strategic guidance and global aftermarket direction to Dr. Yilong Chen, managing director of the new MEMA China Center in Shanghai, also the location of the AASA China Aftermarket Office. Burkhart joined AASA in 2015 after 16 years with Federal-Mogul, including the role of senior vice president, global aftermarket. He also previously served as vice president of global marketing at Tenneco Inc.
The AASA CAF is a peer group comprised of members of the AASA with operations in the People’s Republic of China. Its mission is to support the growth of member companies’ business within the Chinese automotive aftermarket. The CAF accomplishes this mission through offering opportunities to meet with peers and other selected constituencies, facilitating collaboration among the members, and representing member interests via coordinated member participation in relevant industry groups.
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