Deloitte: The importance of accessories management in the Chinese auto market is heating up

The maturing Chinese auto market has provided strong support for the growth of the auto aftermarket. Deloitte's latest report released on October 18, 2013 stated that in this context, spare parts business will become one of the important areas of competition in the future.

Since 2003, Deloitte Management Consulting has implemented a global aftersales and accessories management benchmarking study every two years, covering five major industries, including automotive, aerospace manufacturing and high-tech manufacturing. This year, Deloitte Management Consulting conducted a nationwide SPM survey against the Chinese automotive industry. Survey involved 12 major domestic car manufacturers, focuses on the overall strategic positioning accessories business, distribution network planning, forecasting and inventory planning, logistics management, parts management information system implementation and benchmarking of key performance indicators.

Joe Vitale, head of Deloitte Touche Tohmatsu's global automotive industry, said: “The use of vehicles has reached six years and demand for after-sales services has started to rise. In China, the number of cars with a vehicle age of more than six years in 2010 accounted for about 27%. By 2012, this number rose to 29 %, It is expected to reach 35% by 2015. Customers are increasingly concerned about the maintenance of their own cars and replacement of parts.Therefore, the importance of after-sales service and accessories business for the entire car sales will continue to be prominent in China.The explosive growth of the number of Chinese cars It is also one of the reasons behind the rapid growth of automobile after-sales service.” He added that China’s car ownership is expected to surpass the United States by 2020 to reach 280 million vehicles.

According to Deloitte's survey, most automakers' accessories business managers believe that factors such as investment, strategic focus, organization, and internal communication have not become major obstacles to the continued development of the accessories business. The current major resistance lies in Forecasting and planning capabilities, stability of front-end parts availability, supplier collaboration, control of logistics management, information systems and data management, and supply chain visibility.

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