EV Aftermarket Shows Great Profit Margin In 2020
The development of China’s electric two-wheeled vehicle industry has entered a fast growth period, but the aftermarket industry, which is closely related to the electric two-wheeler consumers, is still underdeveloped. As 2020 is the year with the most stringent regulation after the implementation of the new national standard, the market reshuffle of the electric two-wheeler industry accelerates, which will become the watershed of the electric two-wheeler industry. Profit margin of the electric two-wheeler market emerged this year as the aftermarket began to accelerate, indicating huge potential for the future.
The aftermarket of electric two-wheeled vehicles refers to the market of repair, maintenance, services, charging and changing of battery, and relevant parts and supplies. For the existing electric two-wheeler aftermarket, it is basically still in the early development stage with low threshold and services of low added value, providing only basic services such as maintenance, parts replacement, and change of battery. It can only be regarded as the maintenance industry, instead of a complete aftermarket, of the electric two-wheeled vehicles.
In May 2019, Tianneng group and Suning reached an agreement to jointly create industry standards and promote the healthy development of the electric two-wheeler aftermarket by taking advantage of their respective advantages. It focuses on exploring the existing business models and future development direction of electric two-wheeler aftermarket services, and enhancing the added value and depth of the aftermarket industry.
Accelerating development of intelligent electric two-wheeler products and services
2020 is a year of reform and innovation for the electric two-wheeler industry. As a development trend of the industry, intelligent products require better maintenance and IoT-based software function services. This will significantly increase the added value of the electric two-wheeler aftermarket services.
New retail prompting dealers to provide fine after-sales services
The particularity of the beginning of this year makes the electric two-wheeler industry rapidly move to online sales, such as new retail and live-streamed sales. Manufacturers actively motivate dealers to implement the new retail mode of online payment and offline delivery of vehicles, helping the dealers through the difficult situation. When consumers buy electric two-wheelers online, they pay more attention to branding and after-sales maintenance. This will encourage dealers to actively do a better job in providing after-sales services, and at the same time to expand the services to cover the aftermarket content, thus gaining more profits.
Increased demand for customization and modification
The electric two-wheeler consumer group has changed significantly. The proportion of post-80s and 90s consumers is increasing. Young people care more about fashion, function, personalized features. More people make modification after they buy the vehicles. Stylish decal and decoration, audio devices, larger motors, lithium battery, and tires will become the hot growth point of the aftermarket.
Online platform driving the aftermarket industry
Many electric two-wheeler enterprises have developed their aftermarket service platform, covering the whole industry chain of aftermarket services, upgrading the services from basic maintenance to diversified high value-added services, which shows huge profit potential of the aftermarket industry.
More electric two-wheelers being used and the aftermarket scale expanding further
According to data from relevant national departments and media, although the electric two-wheeler industry has suffered a temporary stagnation this year, the sales volume is likely to exceed 50 million, and the total number of electric two-wheelers being used will be close to 400 million units. The aftermarket scale will continue to expand.
Fast expanding take-out, express delivery and shared electric two-wheelers services.
According to February’s Meituan figures, 75,000 new takeaway riders were recruited in less than a month, with the vast majority using electric two-wheeled vehicles for the food delivery. The courier industry and shared two-wheelers are also growing rapidly. In addition to the growth of the aftermarket brought by the increment of electric two-wheeled vehicles, it also directly drives the rapid development of the battery recharging and replacing market. According to statistics from iResearch, the market size of China’s public charging service industry will reach more than 20 billion Yuan in 2020, which means the operation potential of charging facilities including charging piles is unlimited.
After-sales service being a decisive factor for consumers to buy a product
For consumers, the service costs of electric two-wheelers are closely related to their life, so the quality of after-sales service is often one of the decisive factors for consumers to buy a vehicle. Leading brands in sales often win by public praise and quality after-sales services, which complement each other and greatly promote the standardized and scientific development of the aftermarket.
The electric two-wheeler aftermarket in China is still an under-developed field with great potential. In addition to dealers, the manufacturers should also gradually explore the aftermarket. As long as they stand the test of both the market and the users, they may reap rich profits in the future by providing more high value-added services. (Source: WeChat: shangqingddc)
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