After the boom in car sales, it's the turn of after-sales
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China Daily, June 20, 2011
The growing number of car owners in China is proving to be a big attraction to the after-sales market in the almost two years since sales boomed.
Observers expect a surge in demand as automobile ownership increases - a development that one company in particular hopes to capitalize upon.
In 2003, Mondial Assistance China was the first wholly foreign-owned roadside assistance company to enter the Chinese mainland. In April it renamed itself Allianz Global Assistance China, becoming the first company in China to have launched a rebranding campaign globally. It has been part of Allianz Group for more than 10 years. Munich-based Allianz Group is one of the leading specialist assistance and insurance providers worldwide.
"As the first country to launch the rebranding campaign, I'm very confident that the growing automobile sales market in China will offer huge potential for our company's development," said Christophe Aniel, chief executive officer of Allianz Global Assistance China.
Allianz cooperates with many well-known global and local automobile manufacturers, including Mercedes-Benz and China's Changan Automobile.
China's automobile production rose 32.44 percent from 2009 to 2010 to 18.26 million units, with sales of 18.06 million units last year, according to statistics released by the China Association of Automobile Manufacturers in January.
Because automobiles need maintenance and replacement of tires one or two years after they are purchased, the large number of car owners in China will rely on the services of after-sales companies.
"Only 100 people in every thousand in China own a car. It's a ratio much lower than that of Japan and South Korea, let alone the United States, and with the cost of making automobiles falling and personal income increasing, more people will be buying cars in China. As sales grow, so will the after-sales market," said Kenneth Yu, president of Minnesota Mining and Manufacturing Corporation (3M), Greater China, and chief executive officer of 3M China.
As first-time buyers, many car owners in China have little or no knowledge of car maintenance.
"The after-sales market is all about delivering the message of quality service to consumers," Yu said, adding that it aims to educate car owners about maintenance and other services.
Currently, many automobile corporations don't include a roadside assistance service among the benefits they offer to buyers during the warranty period. Second-hand car owners and those with older vehicles may also want to receive roadside assistance in China.
"We will consider the demands of these groups in our business expansion plan in China," said Aniel from Allianz.
Allianz will further develop its products and services tailored to meet the needs of Chinese car owners.
"We will strengthen our cooperation with financial institutions in China as well as with automobile companies, especially those who wish to differentiate themselves from their rivals in the market," said Aniel.
He also said that they will provide clients in China with a one-stop service including sales, insurance and customer relations management within two to three years.
Traditional roadside assistance involves manual work, but Allianz Global Assistance China will also work with automobile manufacturers on the research and development of a new technology called telematics in the next two years. This involves automatically transferring information to the assistance call center when accidents happen, said Zheng Peijun, director of sales and marketing with Allianz Global Assistance China.
"Although the sales growth rate of automobiles in China may not be as high as that in the past two years, the roadside assistance market potential in China remains huge," Aniel said, adding that he is confident about the corporation's further development in China.
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