Why Is the Auto Repair Industry Getting Tougher in China?

Even though the number of cars on the road keeps growing, industry reports show that the auto repair sector is facing multiple structural pressures:

1️⃣ New Energy Vehicles (NEVs) Disrupt Traditional Maintenance

• NEVs now account for nearly half of new car sales, with much lower service frequency

• Maintenance focuses on battery, motor, and electronic systems – no need for engine oil or transmission fluid changes

• Quick-service business continues to shrink

2️⃣ Changing Car Owner Habits

• Average annual mileage is dropping; fuel vehicle maintenance frequency fell from 3.2 to 2.8 times a year

• More cost-conscious behavior: longer service intervals, bringing their own parts, repairing instead of replacing

• “Trade-in for New” policies accelerate the phase-out of older ICE cars, reducing the repair market’s vehicle pool

3️⃣ Profit Margins Under Pressure

• Sales of traditional products like engine oil down more than 5% YoY

• Profit margin for small services has dropped below 10%

• Live-stream sales and discount platforms divert customers away from repair shops

• Customer acquisition costs keep climbing

💡 Ways to Respond

• Upgrade skills for NEV repair and maintenance
• Develop specialized services for NEVs
• Optimize cost structures to protect margins
• Innovate in marketing and customer acquisition
• Offer differentiated services to address cost-conscious trends

🔍 Bottom line: The problem isn’t that there are fewer cars

– It’s that the market structure has changed.

In the coming reshuffle, those who can adapt to NEVs and evolving customer habits will be the ones who survive and grow.

❓ What’s your take? Can independent repair shops still thrive in the NEV era?