7 reasons why domestic auto repair chains are prone to failure

7 reasons why domestic auto repair chains are prone to failure

The development of China's auto repair chain model has more and more than 10 years of history, but there have been no very successful companies. What is the reason? The well-known automobile maintenance products manufacturer, car washing equipment enterprise, automobile maintenance equipment enterprise and ternary catalytic regeneration expert Zhicheng Automobile, share with you the 7 reasons why the current automobile offline chain is difficult to succeed in China:

1. Services cannot be standardized.

The 4S system only repairs a single brand model, parts, technology and service processes can be standardized, and chain service is relatively easy. However, non-4S vehicles need to be repaired by IWC, especially China. The problem of IWC is the most serious in the world. Under this circumstance, it is extremely difficult to standardize the spare parts inventory, technical support and service processes. Services that cannot be standardized are difficult to achieve a real chain.

2. Most stock social repair shops have only three types of repair service qualifications

This means that they can only provide car wash beauty or low-profit maintenance services, and high-profit repair services such as powertrain repairs and accident car sheet metal painting can only be operated beyond the scope. Because the demand for accessories for beauty and maintenance services is very low, and the labor hours in China are not high, and the profits of accessories are not made, the operation and profit space of these stores are greatly compressed, and the value of the chain is greatly reduced.

3. The current post-market environment is that bad coins drive out good coins

It is difficult for a law-abiding social repair shop to survive, and fraudulently defrauding consumers and defrauding insurance shops have made a lot of money. Last year, insurance companies intended to cancel the insurance qualifications of dirty and messy social repair shops. To a certain extent, they could not tolerate a large number of fraudulent insurance behaviors. Many media are keen to report on the service fraud problem of 4S stores, but compared to non-4S stores that are nameless and surnamed and hardly subject to any terms, will there be higher moral self-control in the issue of fraudulent users? For stores implementing chain services, one of the greater hidden dangers of management is the integrity of the store's treatment of customers. If the same chain brand is used, if the control is not in place, the store that sells dog meat with a sheep's head will be more profitable, such as using fake and inferior. Chain stores with sub-filled accessories are better than impractical profitability, which in turn leads to the boycott of the entire chain brand, and the problem of bad money expelling good coins makes the management threshold of chain services very high.

Fourth, the chain service system lacks due advantages

Chain service itself lacks the advantages in terms of brand, technical equipment support, and accessories. Currently, many first-tier cities require new stores to be chained. Chains will have thresholds. For example, 5 stores are considered chains, and the investment scale is not low. If you choose to join, you usually have to pay expensive franchise fees, equipment purchase fees, and parts ordering tasks. For a community repair shop with a monthly net profit of 20,000 yuan, whether it is a franchise fee, equipment purchase, or parts ordering, it will be substantial Weaken profitability. Relatively speaking, single-store operations can completely obtain low-cost equipment and parts in the market, eliminating the need for additional expenditures, and single-store operations do not need to worry about internal punishment for fraudulent users or insurance companies. The profitability of the chain is better-how could such an outcome have investors willing to join the chain?

5. The competition is fierce and there is a lack of good stores.

In the past 30 years, a large number of maintenance companies have emerged everywhere. With the further improvement of the current political planning, as a productive enterprise, automobile maintenance is facing the problem of relocation to the periphery of the city, which means that the locations with good customer collection capacity are becoming scarcer. For new chain stores, it is very difficult to obtain a good store address. No matter how good a franchise project is, the above four reasons lead to lack of attention. In this case, how to choose direct sales will face the problem of store address.

6. Chain services require technical support or high-quality staff training

At present, talents in the entire post-market are flowing to 4S, and non-4S attracts talents very weakly. If training is to be strengthened, talents cultivated with high investment will be outflowed to the 4S system if they cannot be retained with high salary, and it is difficult to reduce service cost with high salary. This paradox makes it difficult for chain services to solve technical problems.

7. Lack of accessory support system

The core of the chain service is the parts support system. At present, the major parts logistics services in China are controlled by SAIC, FAW and other large auto groups. It is difficult to use third-party logistics to complete the nationwide chain store parts logistics services at low cost. Without parts logistics, it is difficult to satisfy customer needs by relying solely on the store ’s parts inventory, let alone the user experience.

The results of these 7 reasons are:

First, the national auto repair chain car maintenance chain generally sells dog meat, sells equipment, and sells accessories. However, the problems of technical support, management support, and timeliness of supply of accessories are difficult to solve, and the problem of not being locked is very serious.

Second, auto repair chains and beauty chains in first-tier cities such as Beijing, Shanghai and Guangzhou are all regionalized, which is very similar to the chain service situation in Europe, America and Japan. Chain brands from the US, Europe and Japan all entered the Chinese market, but they all came back. In fact, they also generally encounter Waterloo in other regions outside the homeland, which means that the regional problems of auto repair chains are worldwide. If China wants to build auto repair chains, it will at least make direct stores in one region first. Then use resources and services to break the regional spell.

3. At present, O2O projects for diversion only are difficult to obtain chain store resources. A large number of single stores scanned by the street lack control mechanisms in terms of service standards, and it is difficult to achieve branded operations.

The domestic situation is the same. Looking at foreign countries, we can see that NAPA, which started with accessories, has more than 10,000 stores in the United States. NAPA has built more than 600 satellite stores around these stores to support the supply of accessories in these stores. The powerful NAPA accessories The logistics system makes it easy for stores to obtain the necessary accessories, which is the key to NAPA's chain. For user experience, NAPA relies on a large number of directly operated stores, and reducing franchise is an effective means to solve the moral paradox. In contrast, Autozone, which has more than 3,000 stores, also makes auto repair and maintenance equipment and accessories, but it chooses to be the owner of DIY, which is temporarily not replicable in the Chinese market.

NAPA has a history of more than 80 years, and Autozone has a history of more than 30 years. At present, from the perspective of domestic household ownership, it is roughly the same as that of American household ownership when NAPA was founded. In other words, the timing of starting a fast repair chain in China is appropriate, but if it takes 80 years, I am afraid that no investor will invest in this entrepreneurial opportunity.