In the age of electric intelligence, automotive repair shops face a survival crisis. In March 2025, Mr. Liu opened his boutique coffee shop after nearly a decade of running an auto repair shop. He had long hesitated between expanding his repair business or switching careers, ultimately opting for a compromise: “I turned car repairs into a side business because making money is just too hard,” he told reporters, expressing his frustration. “I don’t understand why more cars are being sold, yet business is getting tougher.”
The F6 Big Data Research Institute provides insights into Mr. Liu’s concerns through its latest monitoring data. In March, the number of vehicles entering the automotive aftermarket dropped by 8% year-on-year, with revenue also declining by 8%. Furthermore, the 2024 Q4 Automotive Aftermarket Market Report indicated a 4% year-on-year growth in repair service instances for 2024. However, the cumulative revenue and instances for the aftermarket in 2024 both fell by 1% year-on-year, with the fourth quarter experiencing declines compared to the previous year, putting pressure on the industry. Notably, medium and large chain stores saw a 3% increase in service instances year-on-year, while single-store and small chain services dropped by 1% and 4% respectively, highlighting the growing Matthew effect in the automotive aftermarket.
So, do automotive maintenance and beautification businesses still have opportunities? How can they effectively respond to market changes to survive and thrive in this increasingly competitive environment? The maintenance industry is closely tied to user experience and the overall quality of industrial development.
At the recent 2025 Seventh Automotive Service Industry New Trends Conference, Di Yanbin, Secretary-General of the China Automotive Maintenance Industry Association, noted that the rapid growth of vehicle ownership in China, particularly with the rise of new energy vehicles (NEVs), has spurred the rapid expansion of the automotive aftermarket. However, this growth also brings new challenges and opportunities. As the automotive industry undergoes transformation, the baton of development in the NEV sector is shifting from production to service, making the automotive repair industry a vital part of the broader automotive supply chain. This sector is now aiming for higher quality development goals, reshaping industry dynamics.
Digital and intelligent technologies are playing a crucial role in this transformation, offering new solutions and development directions. With the rapid rise of NEV aftersales services, traditional repair service systems and parts distribution models are gradually transitioning towards information-based and platform-oriented approaches. Digital technology is irreplaceable in optimizing user experience, enhancing supply chain collaboration, and improving operational efficiency. By leveraging intelligent platforms, precise alignment between production and service can be achieved, making repair services more convenient and efficient, while also promoting transparency and sustainability in parts distribution. Moreover, the digital transformation of the automotive aftermarket is not just a technological revolution; it is also a process of industry collaboration and ecosystem building, currently at a pivotal stage of exploration and practice.
Bai Kun, Executive Deputy Secretary-General of the National Federation of Industry and Commerce Auto Parts Association, stated that although the current ownership of NEVs in China stands at 31.4 million, accounting for less than one-tenth of total vehicle ownership, we must recognize that NEVs are a product of the intersection of global energy transformation and technological revolution. They are not only driving changes in transportation but also significantly impacting energy storage, serving as a vital engine for promoting green and sustainable development. After-sales service, especially in the repair industry, is crucial for the development of the NEV sector, as its level directly affects user experience and the overall quality of the automotive industry.
To advance NEV after-sales services, Bai believes that focusing on three key strategies in technology, ecology, and talent is essential. First, the proliferation of NEVs has ushered in technological innovation, particularly in the realm of the three-core technologies: batteries, motors, and electronic control systems. The automotive repair industry is transitioning from traditional maintenance to a smart ecosystem. In the future, car repairs will not just involve replacing parts but will deeply integrate data and intelligence into a systematic engineering approach. With the introduction of AI algorithms in vehicle networking, vehicles can upload operational data in real-time to preemptively warn of issues like battery degradation or overheating. Repairs will shift from reactive responses to proactive interventions, with over 60% of faults potentially resolved through remote upgrades, significantly reducing the need for in-person repairs.
Secondly, the industry ecosystem is evolving. In response to the reconstruction of the supply chain, businesses must build collaborative ecosystems that facilitate service model innovation and create new profit points. For instance, CATL’s Battery Doctor service generates over 2,000 yuan in service value annually per individual customer. Additionally, NIO’s battery leasing, recycling, reconfiguration, and secondary sales business model allows for multiple revenue streams from a single battery. It’s evident that the profit points for businesses in the NEV ecosystem have changed significantly. Consequently, the entire supply chain, including manufacturers, battery suppliers, and third-party repair platforms, must share data interfaces and technology standards to avoid information silos. Recently, Tesla has opened its vehicle diagnostic technology to authorized service providers to enhance repair efficiency.
Lastly, talent development is critical. After-sales service personnel in the NEV sector must possess three core competencies: a high-voltage safety operating certificate for insulated equipment, the ability to standardize battery disassembly and recycling, and the capability to interpret battery management system fault codes and basic data analysis. Industry estimates suggest that by 2025, there will be a talent gap of at least 800,000 technicians in the domestic NEV repair sector.
The after-sales landscape for new energy is becoming increasingly diverse. Initially, cars were viewed merely as transportation tools, but in recent years, the industry has proposed the concept of vehicles as the third space in people’s lives. With the deepening of intelligence, this attribute has intensified, and cars are increasingly becoming mobile terminals. According to Xu Huxiong, a global partner at Roland Berger, as transportation tools, cars have limited marketing space, but as mobile spaces, they can generate diverse demands, including for “decorations” and other interactive and entertainment aspects. For instance, the demand for specialized in-car products has surged on platforms like Tmall in recent years.
Younger consumers are more willing to invest in brands that resonate with their identity and original designs, placing a high value on individuality. NEV owners increasingly demand “specialized” in-car products that enhance aesthetics, quality of life, and the functionality of their vehicles. Roland Berger anticipates that as the NEV industry matures, after-sales service models will become more diversified, with cross-industry players participating in the after-sales ecosystem. The ecosystem may encompass battery recycling, energy supplementation, digitalization, after-sales service, and marketing. Specifically, the primary value pillars of NEV after-sales will include car washing, maintenance of the three core systems, and body repairs.
The car wash market has immense potential. As user awareness of wash and care increases, the industry is moving toward a phase of branding characterized by high product and service quality. By 2030, the market size for maintaining the three core systems is expected to reach nearly 30 billion yuan, making it crucial for repair shops to obtain authorization from manufacturers or battery suppliers. Repair shops can leverage the advantages of O2O platform cooperation and training systems to seize this opportunity. In terms of body repairs, lightweight processes are becoming a core technological trend in the automotive industry. New materials and integrated die-casting processes can reduce weight and energy consumption while enhancing overall vehicle performance, although this may lead to increased costs for parts replacement and repair at the after-sales end.
Hu Jie, founder of Shandong German New Energy Automobile Co., believes that hybrid repair services are the most urgent transformation direction for auto repair shops. Firstly, it is essential to identify which projects to focus on. He summarizes that body painting, tool maintenance, chassis, and tire services, along with air conditioning, belong to lower-technical projects for fuel vehicles, which do not showcase the shop’s differentiation. In contrast, high-voltage system diagnostics, high-voltage battery repairs, and high-voltage module/motor repairs are considered higher-technical projects that can yield better profit margins with the right technological upgrades. Intelligent driving and cockpit systems, as well as internet application systems, require higher technical expertise and cannot be pursued without authorization, though they represent future aspirations.
Hu Xiaodong, President of Tuhu Automotive, stated at the 2025 China Electric Vehicle Hundred-Person Forum that the ownership of NEVs has surpassed 30 million, with increasing demands for maintenance and services related to the three core systems. However, the average repair costs for power batteries are relatively high, and the coverage of authorized service networks from manufacturers and battery producers is insufficient. The digital skills of technicians and their capacity for maintenance and diagnostics of the three core systems are also limited. Additionally, the demand for automotive beauty services, such as film application and color changing, is robust; yet the standardization of the automotive film industry is still lacking. The growing demand for diagnostics and maintenance of the three core systems, along with beauty services, presents new challenges for the automotive service industry. Currently, Tuhu has expanded into the diagnostics, maintenance, and extended warranty businesses for the three core systems.
To address the high costs of battery repairs, Tuhu has launched a battery package unboxing repair service, which allows for the replacement of individual modules at a significantly lower cost compared to full replacement. Miao Qin, Vice President of JD.com, indicated that China’s automotive market can be divided into two “4 trillion yuan” segments: the first comprises new car sales, worth 4 trillion yuan, while the second, also valued at 4 trillion yuan, encompasses the diverse automotive aftermarket. From the user’s perspective, the average car purchase decision cycle lasts around 60 days, while subsequent activities such as parts replacement, maintenance, and vehicle usage until the next purchase extend over five years or more. During this period, numerous opportunities exist for user engagement and service provision, reflecting a strong demand for higher-quality products and services.
In response to automotive aftermarket trends, JD.com is actively involved in establishing standards for NEV maintenance and is focused on training specialized technicians to ensure efficient and professional after-sales service for NEVs. JD.com has also built a dedicated after-sales center for NEVs, empowering partners through various avenues such as NEV authorization, maintenance of the three core systems, and battery testing, to collectively promote the healthy development of the NEV aftermarket.
The opportunity for automotive repair shops lies in creating their “signature services.” “Following the old map won’t lead to new lands,” said Hu Yudong, founder of Lingxiang Automotive Services. “In recent years, the closure of many service shops has not been due to competition with peers but rather from being outpaced by themselves and their customers.” According to him, the lack of traffic at terminal shops is merely a symptom; what is truly lacking is the ability to attract and retain customers. Data shows that customer visit frequencies have indeed declined, meaning that shops that once thrived with 1,000 customers now require 2,000 to survive. Therefore, alongside improving repair skills, shops must also refine their customer acquisition techniques.
Hu Yudong further emphasized that beneath the superficial lack of profit lies a deficiency in operational management and project marketing. Many service offerings remain unnoticed by vehicle owners, necessitating effective communication to identify and even create customer needs. Shops that struggle with marketing are unlikely to thrive. “Automotive service shop owners need to reassess the industry and their positioning. They must step outside the workstations and stores, learn new knowledge, adapt to changes, and create new projects. Additionally, owners should contemplate how to expand their customer base, ensure their continuous consumption, design traffic-generating projects, and identify usable and trainable talents.” Hu Yudong articulated that transformation begins with the owner.
Li Zhan, founder of Dazhan Audi’s national chain, believes that traditional maintenance businesses must focus on four key actions to adapt to the NEV era. First, they should deepen their technological expertise, such as specializing in precision repairs for gearboxes and engines. Second, they need to strengthen their teams by providing ongoing training and unlimited practical learning opportunities for employees. Third, they should invest in advanced equipment and avoid downgrading. Fourth, they must learn about NEV repair knowledge. He emphasized, “Repair businesses must have their ‘signature services’ and cannot be mediocre across the board; focusing on ‘specialized repairs’ is the future direction.” In the mobile internet era, effective short video marketing is also critical. The key to successful short video marketing lies in authenticity and sincerity; being genuine makes for the best copy, while sincerity fosters the best persona.
Currently, the popularity of NEVs is dramatically reshaping the automotive aftermarket. Data indicates that the average maintenance frequency for NEVs is about 40% lower than that of fuel vehicles, with core maintenance projects highly concentrated on the three core systems, leading to a significant decline in traditional revenue-generating services, such as oil changes and engine maintenance. At the same time, the industry is embroiled in a fierce pricing war, with “price slashing” pushing profits to the brink and squeezing the survival space for shops. Kang Zhonghua, founder of Car Craftsman Luxury Car Specialized Chain, asserts that amidst the crisis, opportunities are quietly emerging. Consumers are increasingly demanding higher quality in their automotive lives. NEV owners are generally younger and place a greater emphasis on personalization and experience, making services like car washing and interior upgrades essential.
He believes that premium projects, such as bespoke floor mats, will become breakthrough points for differentiation in competition, while high-repurchase services like washing will be crucial for attracting and retaining customers. Kang Zhonghua summarized three reasons why professional washing can transform from a peripheral service to a profit growth engine for shops. First, it is a high-frequency necessity with strong resistance to market cycles. Regardless of fuel or electric vehicles, the demand for washing remains unaffected by technological iterations, with annual consumption frequencies stable at 12 to 20 times. Second, it boasts high profit margins and low entry barriers. Professional “wash, care, and beautify” services (such as paint care, protective films, and deep interior cleaning) do not require heavy asset investments in equipment.
Third, they can drive ancillary consumption. A satisfactory washing experience often leads to related purchases, such as floor mats or glass films, significantly increasing the average transaction value by 3 to 5 times. Li Yajun, General Manager of Chongqing Yimai Trading Co., has openly stated that professional washing is the core weapon for shops to break through. To excel in this service, the first step is precise pricing. Shops should differentiate pricing based on customer needs for basic washes versus premium washes. When engaging in group buying or online marketing efforts, accurate pricing is crucial; lower prices do not always attract high-value customers. The second step involves effective scenario marketing, such as organized towel placement and neat washing liquid displays, ensuring that the physical space is clean and tidy. The washing process should be clearly outlined for both training new staff and allowing customer oversight. Wastewater management is also important, and the completion of services should be visually presented to customers.
The third step is data-driven management. If a successful transaction happens in the morning, a timely review and employee training should occur in the afternoon to enhance the shop’s conversion rates. Additionally, amidst declining maintenance services, the often-overlooked demand for floor mats has become evident. Data shows that due to the easily soiled nature of standard mats in NEVs, 90% of owners will proactively replace them within three months of purchase. Thus, during washing services, staff can readily identify issues with floor mats. If they can effectively communicate with owners and offer experiential services, conversion rates could soar to 40%, boosting revenue for individual shops.
