At the beginning of last year, I had the idea of going back to Auto Parts City.
At that time, I found Jia's old work Interview with Workers in China ten years ago in a secondhand bookstore. From the state-owned factory to the commercial building, the old factory buildings carrying three contract workers and 50 years' memories were all demolished within one year, and the existence of the group was reduced to ashes. I was deeply impressed by the ups and downs of black and white life and death-just like the dense individual destiny in the declining auto parts city.
They are all gathered in a special field, ruthlessly dismantled and trapped by the times, and they are victims of social progress and industrial transformation. I was shocked by several classic interviews with Ms. Cha Jianying, but Jia Dao only focused on the little people. Compared with the interpretation of elitism, what moved me at that moment was the sincerity in facing individual reality.
Because of inertia, a year has passed in an instant. It was not until the beginning of the year that the epidemic in COVID-19 was raging that I decided to interview and write down new stories and different social emotions under the epidemic.
However, COVID-19's influence on the automobile aftermarket is not only concentrated in the simple automobile parts city or terminal store. If we take a bird's eye view of the fate of individuals and enterprises in the whole industry, news of layoffs, store closures, debts and cash flow emergencies frequently appear in newspapers, and auto parts manufacturers, distributors, platforms and even service providers are not immune to this disastrous impact.
From a macro perspective, the impact of the epidemic on the post-market is two sides of the same coin. We found that in the process of speeding up the reshuffle and elimination, the post-market investment case during the period of COVID-19 was still going on normally. Let's not say that several giants have completed modular restructuring at the beginning of the year. Last week, it was reported that Haomeite auto parts chain supply chain platform completed the Pre-A round of financing. The law of how difficult it is to start a business and how dangerous it is organic is still quietly staged in the land of the post-market.
After the 20 19 Geneva Motor Show, Shi Jie, the editor-in-chief, recorded the conflicts and changes in the era of electrification reform with the article "Turn Blue to Fold Red Blood". Nowadays, an epidemic black swan has flown over the aftermarket of automobiles. Behind the dazzling light of Pandora's Box, as the image expressed in the title of this article reflects not only the clarity of the new blue ocean, but also the danger and opportunity of the whole post-market differentiation and reshuffle.
Life and death of terminal stores
This seems to be a strong topic during the epidemic-
How many stores will close down because of COVID-19?
In the process of chatting with friends in the industry, it is generally believed that 30% of terminals will not survive the first half of the year. Mr. Kazuo Hayashi, a senior investment consultant in the automotive aftermarket, is more cautious. Conservatively speaking, he believes that it is a high probability event that many stores in the country will gradually encounter different degrees of difficulties before the end of June.
Feng He, secretary general of Hubei Automobile After-sales Service Industry Association, also holds a similar attitude. In his view, there will not be too many stores closed in the first half of the year. At present, most bosses hold the mentality of "gambling" and continue to support it for 2-3 months, waiting to see if the epidemic can return to normal performance level after it stabilizes. August-September this year will be a watershed, when the number of shops falling will exceed 15%.
It is difficult to return to work, and it has become a huge stone in the store.
According to an interview with the Automobile Commune, as of the end of March, only 70% of the stores in Beijing, Shanghai, Hangzhou and Guangzhou have resumed business, but even these terminal stores that have resumed business can't resume their normal business due to the difficulty for employees to get to their posts and the shortage of upstream raw materials or goods.
According to the observation of Secretary-General Feng, the terminal stores in Hubei (except Wuhan) have been on the right track one after another, but as the hardest hit area of this epidemic, Wuhan has only 20% stores and 20% repair shops, and the situation of auto parts is slightly better, but only 30% resumed business at the end of March. In his view, it will take at least three months for the auto repair and auto parts shops in Hubei to restore their business level in the same period last year, and four months for Wuhan.
Mr. Li, the founder of Beijing Maintenance Express Shop Workshop, told the Automobile Commune that his home was one of the shops that resumed work earlier in Beijing. On the one hand, because the car wash business is open all the year round, half of the employees did not return to their hometown during the Spring Festival, and he himself returned to Beijing early at the end of 1. At that time, few peers returned to work, and only a few 4S stores had employees on duty in Beijing. By the end of March, there were still several peers near them who had not opened their business.
In Mr. Li's view, the impact of the epidemic on terminal stores is all-round, because people are not moving, and almost all family cars are parked. Many colleagues, including craftsmen's workshops, have recovered their car washing business to 50% at most, while the maintenance is only about 40%. In addition, during the epidemic, there was little communication time. Many customers only choose car washing and quick repair when they enter the store. If they spend more time, they will hesitate, and unfamiliar customers in the rest area can't get in. Open-air communication has a certain impact on customer experience.
Rent and labor costs have led to a large number of store losses.
According to the investigation and interview of Automobile Commune, a second-class qualified maintenance enterprise in Jiading, Shanghai, with a site of 1.500 square meters and 30 employees, accumulated losses of about 1 10,000 yuan in two months when the epidemic was raging. A small auto repair shop with nearly 10 employees near the third ring road in Beijing lost about 200 thousand. However, several couples' shops in Guangzhou's new Chen Tian business district lost 5000-65438+ 10,000 yuan because they didn't resume work. ......
These are only part of the data of the sample survey, but the first-line survey visits have made us more convinced of the industry rumor that "about 30% of the store cash flow will not last until June this year".
What followed was the abolition of employees and the contraction of the front.
During the visit, it was found that more than 60% of the stores decided to reduce the number of employees in February and March, so as to minimize the loss of the epidemic through layoffs and salary cuts. In Hubei Province, where the epidemic was the most serious, Secretary-General Feng He also suggested reducing personnel expenses to resist the business crisis caused by the epidemic. He told the automobile commune that for those stores with weak anti-risk ability, they can consider retaining core personnel, suspending personnel expansion and preparing for a protracted war in the future.
At this stage, the government gives help to small and micro enterprises in terms of rent and tax policies, such as reducing or exempting rent for state-owned landlords for 2-3 months. Secretary-General Feng also suggested that terminal stores should learn to communicate with non-state-owned landlords, strive for rent reduction and exemption, and see if they can delay paying rent or transfer part of the rent to the second half of the year.
The general principle of Polaroid luggage holds different views.
He believes that the auto repair and auto parts industries belong to technical service industries, and it is difficult for a mature store to restore normal productivity in a short time after a large number of layoffs. He thinks it is not advisable to lay off employees only for the purpose of stopping bleeding for a short time. Affected by the epidemic, Polaroid also suffered some losses, and most of its cash flow was distributed to employees and shareholders at the beginning of the year. At present, the cash flow is also very tight, but they still choose not to lay off employees or reduce wages, and postpone the payment of wages through communication.
Nevertheless, in the field interview, almost 80% shopkeepers gave feedback to the automobile commune. In addition to the reduction of rents by landlords of state-owned enterprises, it is difficult for various support policies to benefit market entities such as mom-and-pop shops. In the actual negotiation process, it is also very difficult to compete with the landlord for rent. Both rent and labor costs are under pressure, and many small shops have to choose to cancel the contract with the landlord in advance, or start again after the epidemic stabilizes in the second half of the year.
In several auto parts cities in Shanghai, many small shops have felt that the past two years of 20 18 and 20 19 were extremely difficult. The rectification of shops along the street has made foreign customers go a lot. In addition, the houses around the auto parts city have been demolished, and half of them have left. In addition, the economic downturn and stricter environmental protection rectification have made it difficult to approve the whole book such as sheet metal painting and open-air painting. Many individual businesses have only three or four people in their twenties, which can only be maintained.
I tried to contact several shopkeepers who tried it a year ago with WeChat. One of them is a husband-and-wife shop in Henan. In the first half of the year, it decided to close the store and go back to their hometown to do fruit business. The other shop from Anhui decided to arrange for his wife and children to go back to their hometown. The husband and wife and brothers stayed in the store together and waited for the business to resume in the second half of the year.
This feeling is very similar to the urbanization scar in Saunders' book Stay in the City, and combing the nonlinear stories under the epidemic situation seems to reproduce the portrayal of the floating population in Zhang Peng's Strangers in the City. Each generation is newly allocated, and so is the industry. It is inevitable to see so many individuals rise and fall with the rise and fall of auto parts city, leaving an epidemic and ending the interview.
The middle layer is in a dilemma
So, what kind of enterprises are most affected?
Bao Jianhua, the chairman of Bao Li Automobile Company, has almost the same view as the results of the field investigation of the automobile commune. He believes that the accident car business has the greatest impact, followed by maintenance and beauty care. In normal times, the peak of accident car business will be ushered in after the Spring Festival, but now cars are parked at home, and stores specializing in related businesses will be greatly affected.
It is worth mentioning that the in-car disinfection business immediately became the "fragrant steamed bun" of terminal stores after the outbreak of the epidemic, and many stores are making efforts in this new business segment. But in Bao Jianhua's view, this is just a project to increase traffic, and the profit is not high. The store wants to pull back a game in the second half of the year, and this new business will not help the performance improvement.
Although the life-and-death reshuffle of terminal stores is cruel, on the other hand, we can see that the investment and financing war of head enterprises in the automotive aftermarket has not been greatly affected by COVID-19's response.
On March 27th, Haomeite auto parts chain supply chain platform announced the completion of the 50 million yuan Pre-A round of financing, which was jointly invested by Shun Financing Capital and Fude Venture Capital, and Yiren Capital served as the exclusive financial advisor for this round of financing; Two weeks later, Shanghai Fuchuang Industrial Co., Ltd., a joint venture company jointly established by ExxonMobil and its dealer investment companies Fu Xiao, Tencent and Togo, was officially put into operation.
What kind of industry logic is reflected behind this?
As everyone in the industry knows, it was not until 20 18 that China's automobile aftermarket officially bid farewell to the "wild era" and officially entered the "Warring States era" where big players entered the game. First, Tmall teamed up with Auto Superman and Zhongkang Auto Parts to set up a new retail system of auto service "Xinkangzhong", and then Togo completed a new round of financing led by Tencent and Sequoia. Through the superposition of flow, supply chain, capital, technology, brand and other factors, the automobile aftermarket has officially risen from the competition between platforms to the competition between ecology.
In the past 20 19, the investment and reorganization of automobile aftermarket surged. Xinkangzhong, Hao Auto Parts, Santouliuarm and cluster car treasure have also completed new financing and new integration with different volumes. These players have built moat barriers with higher valuations, stronger capital reserves and more mature business models, making it possible to integrate the entire industrial chain of C-end, repair shops, supply chains and manufacturers.
The epidemic did not stop the momentum of modular restructuring.
Mr. Kazuo Hayashi, a senior investment consultant, told Auto Commune that according to his observation in the front line of capital, even in February-March, when the epidemic was the worst, the investment cases in the automotive aftermarket were still going on normally, but now only a part of the investment and financing projects finalized at the beginning of this year have been announced. After April, more M&A news will be announced one after another.
Kazuo Hayashi believes that high-quality supply chain assets and sub-sectors are still favored by capital, and this epidemic has deepened the burden of participants in the whole industry, and independent after-sales enterprises are facing great challenges. In addition, due to the tight consumption environment brought about by the economic downturn, even if there is traffic in stores, the profits are not strong, and it is difficult to turn traffic into long-term and lasting profits. In this context, stores will become the burden of assets, and it is the best choice for stores to get rid of them. At this time, capital will be useful. Of course, capital bargain-hunting has become a natural thing.
However, we should also see the difference between financial investment and strategic investment.
An industry veteran, who did not want to be named, told the Automobile Commune that the automobile aftermarket, such as three heads and six arms, Quick Precision and other enterprises, has been under the pressure of the last round of capital overweight for some time, and the comprehensive environment has deteriorated. Many of them have to make great efforts to attract the attention of capital; For bloodthirsty capital, they will pay close attention to the high-quality supply chain in the automotive aftermarket, but this is not a strategic investment, but a financial investment. After buying, they will quit in the shortest time and make a profit.
In fact, the most difficult time for intermediate players.
Second-tier enterprises, surviving is still the biggest challenge.
After talking with many people in the industry about the impact of the epidemic on different market players, a large number of people in the industry believe that small and micro enterprises and terminal stores can stop losses in time, and the boat is small and easy to turn around, while giants such as Xinkangzhong and Hutu Car Maintenance supported by BAT Internet Fund have strong cash flow advantages. The most difficult thing is the heavy asset enterprises such as quick standard, which are sandwiched in the middle of the pyramid of automobile aftermarket. They will be in great pain under the impact of the flood.
However, this does not mean that a giant like Xinkangzhong can be immune to the epidemic. On the one hand, it is the hard influence of the delay in returning to work, the difficulty in employee placement and the decline in passenger flow. On the other hand, it is the heavy asset model that determines that the front warehouse will become a pit for burning money. Xinkangzhong has accumulated nearly 600 central warehouses, regional warehouses and pre-store warehouses in nearly 30 provinces across the country (this data was updated at the beginning of 20 19 due to lack of the latest information), and the cash flow pressure under the epidemic situation can be seen.
Of course, the "middle-level players" here include not only the platform-based automobile supply chain, but also some service-oriented players (training, planning and information services), and most of their businesses are difficult to develop smoothly this year.
When the reporters of the Automobile Commune conducted a field investigation, they found that in February and March this year, many auto parts chains had started to lay off employees. A SaaS technology company headquartered in Guangzhou lost more than half of its technical core personnel. At the beginning of this year, its founder turned around to look for new capital, or sought overall acquisition opportunities from large chains and platforms.
There are opportunities in the "crisis" of multinational companies.
With the escalation of the global epidemic, the automobile industry has experienced the most severe test in history, almost overnight, and the whole line is in a hurry. Forced to stop production, forced to lay off employees, profit loss warning sounded frequently. According to the incomplete statistics of Automobile Commune at the end of March, more than 10 automobile manufacturers have shut down more than 100 first-line factories, even including Tier companies such as Bosch and China. A parts giant has also begun to close its production bases in Europe and the United States.
So, what is the situation of multinational enterprises in the post-market?
Mr. Wang, vice president of BPI Group and general manager of the Asia-Pacific region, told the automobile commune that the epidemic situation will have a more direct impact on the sales of new cars, but the aftermarket is a stock market with stronger anti-epidemic ability.
Brake, an American brake parts manufacturer? Parts? Inc (BPI Group for short) has a product line covering brake pads, brake discs, brake drums, calipers, hydraulic components, hub bearings and so on. , involving OEM, OES and IAM, has R&D center and seven manufacturing bases in the world, headquartered in Illinois, USA, and Shanghai Platinum Trading Co., Ltd., the Asia-Pacific regional headquarters, is located in Shanghai.
At present, BPI products are exported to foreign countries and also to the domestic market. According to Mr. Wang, the impact of the epidemic on the company is mainly divided into two stages-
In the first stage, at the beginning of the epidemic, COVID-19's influence was mainly concentrated in China, and the biggest challenge was the low capacity utilization rate at that time. The company must concentrate all its efforts to deal with a series of problems in normal work, including hard needs such as front-line prevention and control, disinfection and mask purchase, and strive to improve the utilization rate of production capacity.
In the second stage, the domestic epidemic was basically stable, and European and American countries became the new "epicenter" of the global epidemic. At present, the main obstacle of BPI is that some overseas markets suspend shipments, some future orders are cancelled and export orders are reduced, which is a common problem of all manufacturers involved in overseas trade.
At this stage, some raw materials needed for normal production of BPI domestic factories are imported from Europe, such as Italy and other epidemic areas, and the supply of some key raw materials is cut off; The status quo of auto repair and auto parts stores in the United States is the same as that in China two months ago, with large-scale closure and a sharp drop in overseas orders.
However, in Wang's view, where there is danger, there is opportunity.
He told the Automobile Commune reporter that the European and American markets of foreign-funded enterprises were banned, but the China market gradually recovered. They believe that there are still great opportunities in China, and we must seize them firmly. On the one hand, BPI chooses to follow suit, cooperate with head enterprises, especially some large national supply chain platforms, actively establish cooperative relations with regional alliances, flexibly adjust the positioning of brands, products and cost performance, and strive for the support of more dealers.
On the other hand, he believes that it is necessary to do a good job in helping dealers during the epidemic and give the greatest support to partners in accounting period and training. After the epidemic, a group of participants with poor sales ability and fragile cash flow will fall down, but high-quality dealers will definitely survive. These high-quality dealers also have the right to choose other brands. BPI must provide better services and products and leave these high-quality channel resources.
In the investigation and interview, the Automobile Commune also found that most dealers of foreign brands and agents of domestic brands said that they had encountered the embarrassment of "accounting period" at this stage. The factory has an account period, and so do the store customers. Being caught in the middle, it is normal for cash flow to be tight. Presumably, after the baptism of the epidemic, in the next few months, a number of dealer players will fall.
What changes will the epidemic bring to the automotive aftermarket?
When contacting Secretary-General Feng of Hubei Automobile After-sales Service Industry Association, he was preparing for a live webcast at the end of March. When more and more stores resume normal business, the association will launch a series of public welfare live broadcast activities in conjunction with many colleagues across the country to guide practitioners.
During the epidemic, testing water online became the hottest topic.
Since February of this year, both manufacturers and platform marketing departments in the automotive aftermarket, as well as owners and store managers of repair shops and stores, have taken the first step of live broadcast, open classes and online drainage. According to the survey conducted by the Automobile Commune at the end of March, almost 90% of the respondents indicated that they had tried or were willing to accept new means of online marketing, and had multi-level interaction and communication with online users.
But the online effect is uneven.
A person in charge of Beijing Wanchi Automobile told the automobile commune that their online marketing has been done and they are trying to broadcast live, but the effect is not obvious. In his view, the traditional offline is the integrated delivery system of product technical services, and online operation is more marketing drainage. For small and micro stores, the online ceiling lies in the online operation ability and the carrying capacity of the offline integrated distribution system.
Mr. Li, the founder of the Craftsman's Workshop, also said that the store tried to contact him, but found that all the people who helped recommend him were acquaintances. At present, there are few strange customers, and the maximum broadcast volume is more than 3000. At present, we have not decided whether to continue the live broadcast. In his view, it is difficult for physical stores to do live video. Pure knowledge sharing is not very popular. If you want to be popular, you must promote it. This kind of effort is not necessarily easier than running a physical store.
This seems to be the unanimous view of repair shop owners. The online and offline conversion rate is actually very low, and it is difficult for small and micro enterprises to set up professional teams for online promotion. Even those big manufacturers with certain financial support are still in the initial stage of online operations such as testing water and Tik Tok. It is generally believed that at this stage, most of them are helped by colleagues and peers, so it is difficult to harvest new fans in a short time, and there is still a long way to go to form a good fan viscosity.
Secondly, the era of going it alone will drift away.
The serious overcapacity of repair shops and terminal stores has become a cruel fact in the industry. Bao Jianhua, chairman of Polaroid Automobile, once calculated an account-
In Shanghai, a store with a scale of about 2,000 square meters like Polaroid has to serve 20,000 customers every year to achieve food and clothing. But there are only more than 4 million car owners in Shanghai. Conservatively speaking, the market actually only needs 200 stores of this size. But at present, there are about 1600 second-class enterprises in Shanghai, and with the addition of three types of enterprises, the total number is about 7000-8000.
What's more, 20,000 customers can only get enough food and clothing. "Even if we put some subsidies, not 200, but 500, more than two-thirds of enterprises will be eliminated in the end."
The profiteering is over, but the cost remains high. The annual cost of Polaroid is between 6 million and 7 million yuan, which means that the store can only survive with an annual output value of 6.5438+0.2 million yuan. Horizontally, how many stores can achieve an annual output value of120,000 yuan? In the second kind of maintenance, this data only accounts for about 20%.
Secretary-General Feng told the Automobile Commune that he suggested that small and medium-sized enterprises such as repair shops and terminal auto parts shops could take advantage of this opportunity. On the one hand, they should speed up their efforts to move closer to the online market; on the other hand, they should learn to "queue up", rely on big brands and manufacturers, and use each other's financial resources and brand endorsements to achieve standardization and upgrading as soon as possible.
An entrepreneur who has been deeply involved in the technical service field of automotive aftermarket for a long time believes that this epidemic has not only forced more small and micro enterprises to choose to "stand in line" to join Xinkangzhong, or to stand in line with OEMs and large insurance companies, but also forced a large number of "local princes" to join Lianheng to join the group to keep warm and strengthen their bargaining power and anti-risk ability.
Mr. Pagan, a senior Internet practitioner in the automotive aftermarket, has different views on the changes brought by the epidemic to the whole industry.
Heresy told the automobile commune that he didn't think the epidemic would bring new opportunities to the automobile aftermarket. At present, only the demand side and the consumption side are suppressed under the epidemic situation. But for the whole industry, overcapacity has always existed, and all participants have experienced long-term and highly competitive killing and polishing, and there has not been a new turning point. Because of this, the industry will not have much positive impact because of an epidemic.
Although COVID-19 has accelerated the reshuffle this time, it is not easy to have typical innovation scenes and subdivided fields. Coupled with the containment of the consumer side, it is difficult to bring too much innovative imagination to the industry.
However, from the macro environment, he believes that the industry is not without any changes. Now the economic environment is declining due to the epidemic, and the post-market is a weak economic cycle industry. For the demand of fund hedging, the risk is not great, so the later market is likely to become a depression for the whole fund. He predicted that after the epidemic situation in China gradually stabilized, there would be a small peak of investment and financing in the industry.
Of course, there are also more pessimistic views.
An insider who runs a small and medium-sized auto parts factory in Beijing told the automobile commune that people are all species that have healed their scars and forgotten their pain. It seems that they are all busy with reflection these days, and it is very likely that they will forget it all after a while.
The particularity of the industry determines that online independent stores can't make many substantive breakthroughs except maintaining customer relationships; He also heard that during the epidemic, many stores launched employees' WeChat to contact customers, sell various maintenance cards and eat vegetables. It seems that the money has been recovered. Actually, it's not money, it's debt.
If there is any topic that needs deep reflection, it is the relationship between stores and employees and the way to deal with performance. Under such extreme circumstances, how can we tide over the difficulties together? "Of course, customer relationships also need to be reflected. If this industry meets twice a year, it is a good customer, which is 365 a year. Except for the ten-day holiday, you haven't contacted customers for about 340 days. How to maintain these 340 days is something that enterprises should think about. "
I remember visiting the auto parts city a year ago and sitting on the high-speed train from Jiading to Yangpu. I have been thinking about Sartre's "Everyone is a hostage of history" in my mind.
You see, we are trapped by the times and history. It seems that every industry participant is carrying an invisible cage. Because of the times, we can't get rid of it. It seems that it is difficult for us to choose where the individuals in the dense auto parts city are finally abandoned.
This time, in order to write this epidemic investigation report, we interviewed a wider range of colleagues. The epidemic has dealt a heavy blow to the industry, which is really heartbreaking, but we have also seen the positive and optimistic side of many friends. I talked with a senior in the coffee shop for two hours. I was moved by his confidence and profound insight into the industry. However, due to the limited space of the article, I can't express all my views in the article. I hope you can bear with me.
Today, the epidemic has gradually stabilized. At the end of the article, I suddenly thought of the sentence written by Camus: In the dead of winter, we will finally find an invincible summer for ourselves.
Text/Jason
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This article comes from car home, the author of the car manufacturer, and does not represent car home's position.