With China’s car market now in the slow lane after two years of explosive growth, industry players who have invested in after-sales networks are set to reap the benefits of the millions of new cars on the roads that now need repairing and cleaning.
The after-sales market – which includes repairs, insurance and detailing – is more profitable than selling cars, with margins of 50 to 70 percent compared with 15 to 30 percent on vehicle sales.
Mainland car dealers like Dah Chong Hong have been busily acquiring private workshops and garages as rising car prices, fierce competition and slowing demand squeeze margins. Motormech, a car repair chain under DCH Holdings, opened its first store in Dongguan last year and expect the number to grow to 10 this year.
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(Source: scmp.com)