J. Zhang, Nexus China: “The consolidation and the adoption of standardized processes are gradually shaping the market”

James Zhang: He is entering a new era! Vehicles are still leaving manufacturers’ workshops (called 4S in China) at the end of their warranty to then go to independents, but the situation is changing. Many owners are turning more quickly to the secondary market because the cost of maintenance and repair is efficient and the customer wants to reduce his expenses. Especially since IAM parts are very good quality and increasingly better recognized. The independent secondary market already occupies almost 50% of the market share and this figure will continue to increase steadily, especially as more and more local brands set up shop and eat into the market share. However, the rather rapid development of electric vehicles with very protective policies of most of the manufacturers of these vehicles for their spare parts means that the future of IAM in China is still unpredictable.

J.Z.: Repair in China is making a pronounced transition towards larger structures and franchised brands! Independent repair shops still play an important role. This landscape remains predominant, catering to specific customer segments with localized services. But the trend towards consolidation and the adoption of standardized processes are gradually shaping the market.

J.Z.: It plays a vital role because we are an organization that functions as a platform, a single point of contact, connecting all stakeholders between spare parts manufacturers, distributors, repair shops and end customers. In Nexus’ China community, we have top-level wholesalers located in Tier-1 cities and they have significant business with N! suppliers already. But we want to further develop our business in the Tier 2,3 and 4 cities, so we go to deep dive into these smaller cities and find regional leader partners. Nexmento consolidates purchases from those distributors mainly located in tier 2 and 3 cities, by developing and simplifying relationships with N! suppliers and providing them with a single point of contact. Nexus’ objective is to bring its unique values to Chinese IAM players and increasingly involve them in the global landscape.

J.Z.: Yes, others have developed significantly in the market: e-commerce platforms, online marketplaces, specialized distributors... They exploit technology and digital platforms to improve efficiency, the customer experience and product offerings. Many revolutionary digital concepts have emerged in the aftermarket, online platforms providing diagnostic services, mobile repair and maintenance services, used parts… These concepts leverage technology to increase convenience, transparency and accessibility in the secondary market.

J.Z.: The Chinese paint market was initially dominated by industry leaders such as FixAuto. But in recent years, the emergence of specialized paint chain concepts has broken this situation. For example, Zhongsheng 4S Group has established more than 100 sheet body repair workshops in China. The concept’s rise has also attracted interest from automakers such as BYD and Tesla. 

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