China Is Fertile Ground For Auto Repair

December 22, 2010

Imagine a whole country with no used car lots and no need for auto repair shops. Does it sound like it is impossible or maybe even wishful thinking?

There is a place on the planet that finds itself in that state right now--and it is China.

According to an op-ed piece at China Briefing, the country’s automobile industry is so new there are literally no used cars only new ones that are under warranty. Repairs are handled by individual dealers, but only for the service of vehicles that they have sold and are still under the new-car warranty.

The authors of the commentary say that the auto buying boom began in 2008 when the government made cheap money available to their people to stimulate the purchase of cars, homes, agricultural equipment and appliances. The plan succeeded but a support structure of repair shops and second-hand car dealerships has yet to materialize. The report says that even finding a gas station can be challenging at times.  So the clock is ticking since the three year warranties will be running out in 2011.

The BBC reported that the 13.6 million vehicles sold in China during 2009 overtook the U.S. by more than 3 million vehicles. So where will all those Shanghai-Volkswagen and Shanghai-GM vehicles go for service? The answer is that China’s brand of free-market economics will take over as the burgeoning national fleet begs for fixes to keep it on the road.

Similar to what happened when Henry Ford produced cars for the masses, craftsmen will match their skills to the demands of repairing cars. Like the tinsmiths became the first radiator repairmen because they were familiar with the copper and brass components of the cooling system, somewhere in China a technician that is working on production machines or agricultural equipment will branch out to fill the void.

Those domestic solutions may not be enough to fill the huge demand that is a statistical surety. So the China Briefing piece points out in detail that there are ways that foreign retailers of auto parts and service can enter the market in China. The potential seems limitless.

[China Briefing, BBC]

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