Last week, I was chatting with a friend who works in auto parts. He had a confusion: the big brand products and original parts he currently represents are becoming less and less interesting. Not only can’t he make any money, but he also has to pay a lot of money. Inventory, I want to make my own brand, but I am worried that the market for fuel vehicles is getting smaller and smaller, because there are more and more new energy vehicles, and I am afraid that the auto parts industry will not be established soon.
This friend’s worry is also justified, because the entire country’s policies are tilting towards new energy vehicles. The country not only uses the carrot of subsidies to guide car companies to build new energy vehicles, but also uses the double-point policy stick to reward and punish Whether car companies are manufacturing new energy vehicles, the mainstream of future car consumption will definitely turn to new energy vehicles.
In addition, China is currently the world's largest new energy vehicle market. In order to support the development of the new energy vehicle industry, the country has also completed the layout of the entire industrial chain in terms of energy production and transportation.
Energy production: Photovoltaic industry
The country has vigorously developed the photovoltaic industry since the early 2000s, and plans to reduce the proportion of thermal power generation from the current 68% to 0% by 2060, replacing it with solar power and wind power. Power generation . It also plans to reduce the cost of power generation in the photovoltaic industry to about 32% of that of coal power in the next 40 years.
China's photovoltaic industry is currently in an absolute dominance of the world. Seven of the top ten polysilicon manufacturers in the world are Chinese companies; and nine of the top ten global cell companies are Chinese companies. China's photovoltaic power generation grid-connected installed capacity has ranked first in the world for seven consecutive years, so on the energy production side, the industrial layout has been completed.
Energy transportation: UHV transportation
Through UHV, long-distance transmission of electric energy is realized, connecting my country's electricity production and consumption. At present, China's UHV technology is already in a leading position in the world, and Chinese standards are used all over the world. Therefore, on the transportation side, the industrial layout has also been completed.
Judging from the layout of the above countries, there will definitely be more and more new energy vehicles, and there will be fewer and fewer fuel vehicles. The after-sales business of fuel vehicles will also gradually decrease.
However, I personally believe that the after-sales auto parts business for fuel vehicles can continue for at least 20 more years. There are three reasons:
First, the number of fuel vehicles: As of the end of June 2022, the number of new energy vehicles nationwide will be The number of new energy vehicles reached 10.01 million, accounting for 3.23% of the total number of cars; according to predictions by many institutions, by 2030, the number of new energy vehicles in my country will exceed 80 million. This number looks very promising, but it only accounts for 10% of the total number of cars. 20%, 80% of which are also fuel vehicles.
The second is the time of car after-sales: As the quality of new cars gets better and better, the explosive period of car after-sales is generally concentrated after 6-8 years. This time lag also leaves a gap in the auto parts market. Have a longer life cycle.
The third is foreign markets: Even if the domestic after-sales market for fuel vehicles cannot do it, there are still foreign markets. Part of the reason why China is now eager to complete the transformation and substitution of new energy is to achieve the goals of carbon peaking in 2030 and carbon neutrality in 2060. However, many foreign markets do not have such a time crunch. Sensational.
The above three aspects show that the auto parts business for fuel vehicles can still continue, and there is still a huge market. The second question from a friend of
: I think it’s not interesting to represent big brand products and make original parts. I want to build my own brand. Is this idea feasible? There are actually three questions in this sentence. Let’s discuss them one by one:
1. Is it necessary for big brands to act as agents and continue to do business?
Let me start with the conclusion: it is necessary for big brands to continue to do business, but there is no need to be an agent.why?
Before talking about the reasons, let’s take a look at the changes in the external environment faced by brands in China:
1. The link from the brand to the terminal is getting shorter and shorter: it turns out that brand agents are divided into national general agents, provincial agents Level agents, city-level agents, brands have to go through several levels from the factory to the end user; but now the brand's intermediate links may only be one or two levels. The main reason is that the brand's profits can no longer support so many levels. .
2. The brand’s premium ability is decreasing: the original brand promotion strategy was to invite celebrities to endorse and bombard with advertisements to build the brand’s sales potential; but the rise of live broadcast internet celebrities has allowed us to see another trend, which is becoming more and more popular. Many brands use internet celebrities and self-media opinion leaders to promote their brands and sell their products.
The way of Internet celebrities is very different from that of celebrities. They are no longer high-level propaganda, but a bit like the boy or girl next door who talk to you about their product experience.
The difference between stars and Internet celebrities is that one emphasizes big names and celebrities use them; the other is sharing good products to please the audience. The latter model is more acceptable to modern people. The result of the Internet celebrity model is that, Fans "only recognize people". Even if the product is not a well-known brand, fans will readily accept it. The influence of brands on users’ purchasing decisions is being weakened, while the personal influence of internet celebrities is increasing. Based on the above two changes,
also answered from two aspects that big brands can do it, but there is no need to be an agent.
First, the profit is relatively low: The income you earn is not directly proportional to the cost of investment. Once the brand authorizer or yourself changes, the channels you have worked hard to develop or the inventory you have invested will face great risks. In addition, there are many companies authorized by big brands, and price competition is fierce. Therefore, it is better to make less money and transfer goods from others, rather than bear the risks of inventory and competition.
The second reason for customer cooperation: Whether customers can cooperate with you does not actually depend on whether you represent a big brand product, but whether you can become an "opinion leader" for customers like an internet celebrity and let them trust you. You, support you, buy any brand of products you recommend.
The reason why big brand products are still being produced is because they are the glue for customers or the company’s diversion products.
The competition among peers in the future will not only be a competition of scale, but also a competition for users’ minds. Who can grab users’ attention and influence purchasing decisions in today’s social media and live streaming e-commerce world? can have a greater say.
2. Is it necessary to make original parts? There is no doubt that
must be done, because many repair shops, insurance companies, and car owners specify that original parts are required. If they do not make original parts, they will lose stickiness with customers.
In addition, original parts are also popular products. Only if you have the original parts can you buy the auxiliary parts. As auto parts dealers often say to customers: "If the original factory does not cover after-sales service, the sub-factory will cover your after-sales service.
3. Can we build our own brand?
This question can be divided into two parts. One is why we need to build our own brand. ? Second, is it feasible to build your own brand?
1. Why build your own brand?
Many people say that the reason is simple, that is, you can’t make money with the agent’s brand and original parts.
So why can’t you make money? ? Many people also say that the current auto parts market is too chaotic and the price competition is so fierce that it is almost impossible to do anything.
Is there anyone who continues to do it and can still make money? That person has a big business, money and capital, we can't compare.
Can you make money by building your own brand? ......
In fact, if you follow this question, you will find that if the products you make are as good as The services provided are quite homogeneous with others, and no one else has the capital, so it makes sense that you can’t make any money.
Making money has never been easy. In the past, the auto parts industry was easy to do because it was in the dividend period, and the demand was greater than the supply. As long as you could get the goods, you could make money; but now it is in the low-profit period, and the supply is greater than the demand. So making money depends on organizational skills.
When we can't make money, don't say that the market is not good, but that our understanding of the current market is biased; or we have not yet found products or services that adapt to the market; or our abilities are not good enough.
If it is the above reasons, then even if you build your own brand, there is a high probability that you will not make money.
2. Is it feasible to build your own brand?
If the agent brand can do well and you have strong terminal digestion channels, you can try it; but if you do not directly face the repair shop and rely on middlemen to represent your brand, the risk is too great.
In addition, the ability requirements for branding are all-round, while in the past, the ability requirements for agency brands were only at the sales end, which is one point. These are two different levels of ability requirements. Building a brand with requires you to understand packaging design, procurement quality control, brand positioning, channel construction, team management, etc. It requires you and your team to improve their capabilities by an order of magnitude, which is still difficult.
In fact, if you can find profits by acting as an agent for other people's independent brands, this is also a good choice. Don't worry about opening up channels for other people's brands. If one day, you become the hero of this independent brand, then the operation of this brand Fang, will definitely find ways to invite you to join, or tie up interests with you. Many times, joining a good team and working with excellent people is a better choice than working alone and building a brand from scratch.
Written at the end
The most difficult thing in the world is to make money. It not only requires you to have a certain ability, but also a certain amount of luck. In addition, for entrepreneurs, there is no formula that can make money like the laws of physics. You can definitely make money, and sometimes when a business succeeds, it's purely a random event.
Furthermore, whether to build your own brand should be your company's decision whether it needs branding operation, rather than the reason why you want to make money. Different starting points will lead to different thinking directions, and the results will be different. The difference is huge.
