This auto repair company was acquired by 15.3 million, and the automotive aftermarket will usher in a wave of mergers and acquisitions.

Author | Gary

Source | World of Automotive Services (ID: asworld168)

Recently, Beijing Changchang Logistics Co., Ltd. announced that it intends to acquire Beijing Hengan Guangxin Automobile Maintenance Service Co., Ltd.

The announcement pointed out that Changchang Logistics intends to acquire 100% of the equity of Hengan Guangxin through an agreement with Beijing Changchang Automobile Investment Co., Ltd., with a total transfer price of 15.3 million yuan.

That is to say, the 30-year-old auto logistics company will spend 15.3 million yuan to acquire Hengan Guangxin, an auto repair company.

A logistics giant acquired an auto repair company at a high price, which is a relatively rare acquisition case in the automotive aftermarket, and it also shows from the side that the integration and mergers and acquisitions of the automotive aftermarket are becoming more and more intense.

First, why did Changchang Logistics acquire Hengan Guangxin?

According to the official introduction, Changchang Logistics was established in 1992, with automobile logistics as the core business, can provide customers with vehicle transportation, vehicle warehousing, parts logistics, international freight forwarding, social vehicle logistics and network platform road cargo transportation and other aspects of integrated logistics services.

In August 2016, Changchang Logistics was officially listed on the A-share market, and it is also the first third-party automotive logistics enterprise listed on the A-share market in China.

Why is such an auto logistics company interested in auto repair companies?

As can be seen from the announcement, Hengan Guangxin is a company with motor vehicle maintenance as its main business and participates in the aftermarket link of the automotive industry chain. According to the third-party information platform, Hengan Guangxin was established in 2010 with a current registered capital of 10 million yuan, and Changchang Logistics has two main purposes for this acquisition.

The first is to supplement and improve the self-operated vehicle system of the company's vehicle business, and build an internal self-operated vehicle maintenance system through Hengan Guangxin.

Second, as a high-tech enterprise, Hengan Guangxin has focused on the automotive aftermarket for many years, and has deep business transformation and upgrading in automobile maintenance and other aspects, so as to better provide services for the new retail model in the field of new energy vehicles.

It can be seen that there are two key words, one is the maintenance system, and the other is the new energy vehicle.

The first keyword is well understood, long-term logistics under the self-operated logistics vehicle has spawned a large number of after-sales maintenance needs, long-term logistics hopes to solve this demand through Hengan Guangxin, as to whether it is direct operation or other cooperation models, it remains to be seen.

The second keyword, for the new energy vehicle related business, the announcement also made a detailed explanation and explanation:

"(The company) has set up a new energy division, taking automotive logistics as the starting point, exploring comprehensive services such as logistics, warehousing, experience, delivery, charging and replacing, power battery recycling and reverse logistics for customers in the upstream and downstream industrial chain of new energy vehicles, and helping the company's business transformation and upgrading."

In addition, at last year's annual performance briefing, for the new energy vehicle related business, Bo Shijiu, chairman of Changchang Logistics, said: "The traditional car companies disclosed in the annual report such as the Great Wall, Geely, BYD and other manufacturers, the company also provides transportation and warehousing services for the new energy vehicles produced by the company. In addition, the company is also actively exploring the related business of new energy power manufacturers, and has established a solid cooperative relationship with Ideal Automobile. ”

In fact, Changchang Logistics has cooperated with Ideal Automobile to set up a delivery and distribution center in Dongguan, and is also the second comprehensive center of Ideal Automobile in China that integrates new car delivery + regional distribution functions.

As the infrastructure of the industry, logistics companies have extended to the field of maintenance, as well as multiple business chains of new energy vehicles, including experience, charging and replacing, battery recycling, etc.

This shows that the integration between the upstream and downstream of the industrial chain is getting deeper and deeper, and the boundaries are becoming more blurred.

Second, logistics enterprises layout the automotive aftermarket

Changchang Logistics is not the first logistics company to lay out the automotive aftermarket.

The most well-known should be SF.

As we all know, SF has invested in the auto aftermarket, invested in a well-known maintenance chain, and is also an exploration of the auto aftermarket.

In addition, in the middle of last year, SF announced that it and Huasheng reached a strategic cooperation to carry out comprehensive cooperation in the field of automotive aftermarket supply chain services.

SF's advantages are warehouse management, sales forecasting, big data analysis, financial management and other solutions, while Wasion has accumulated a lot of experience in auto repair, auto parts, software data services.

After SF enters the market, it may bring new ideas to the auto parts supply chain field of the automotive aftermarket.

In fact, as early as 2018, SF invested 107 million yuan in chia tai Futong, which is the auto parts supply chain platform for the commercial vehicle market. At that time, Ali had already invested in Kangzhong Auto Parts, and the capital investment in the passenger car track was very high, so SF turned to the commercial vehicle track, which was also a different path.

In terms of OEMs, SF's cooperation with companies such as BMW is also mainly to improve BMW's ability in after-sales delivery, including direct distribution and distribution to dealers.

Why are companies like Changchang Logistics and SF gradually paying attention to the automotive aftermarket?

On the one hand, for enterprises such as Changchang Logistics, which takes vehicle logistics as the core business, China's vehicle sales have entered a stable period, and there has even been negative growth in the past few years, so it is necessary to find a second growth curve.

On the other hand, the automotive aftermarket is a trillion-dollar market, and as the average age of vehicles continues to grow, the industry is getting larger and larger, and logistics-related business is an incremental market.

At the same time, the logistics and distribution system of the automotive aftermarket is not perfect, there are too many intermediate links, and the degree of digitization is low, which is indeed an opportunity for enterprises with capital resources and digital capabilities.

However, there are also industry views that the accessories link of the automotive aftermarket is too complicated, and there is no national unified data standard, and the underlying data is missing, resulting in the difficulty of logistics giants entering the industry.

In such a situation, cooperation and investment may be more appropriate.

This also explains why companies such as Changchang Logistics and SF are initiating industry integration and mergers and acquisitions, and this integration will continue.

Third, the new pattern of new energy vehicles

It is worth noting that one of the keywords in the announcement of long-term logistics is new energy vehicles, and a new energy division has been set up for this purpose.

Another point is that long-term logistics not only excavates traditional businesses such as logistics and warehousing, but also involves experience, delivery, charging replacement, power battery recycling and other businesses, and these businesses are directly for car owners, and many times are undertaken by terminal stores, such as Wei Xiaoli, Tesla and other service centers.

In short, this announcement reveals a signal: in the era of new energy vehicles, due to the characteristics of new energy vehicles, logistics companies that play an infrastructure role are more likely to cut into the business links of the automotive aftermarket.

That is to say, the arrival of new energy vehicles may introduce more unexpected cross-border players.

From this point of view, it is also understandable why Changchang Logistics wants to acquire an auto repair company, and if the future is further cut into the maintenance business outside the self-operated vehicle system, this possibility cannot be said to be zero.

There are similar views in the industry about such a vision.

In an exclusive interview with the auto service world, Jiang Renhai, founder of Kuaizun Car Service, believes that the new cars of the current new car-making forces are mainly concentrated in first- and second-tier cities, and the logistics and distribution pressure for after-sales accessories is not so great.

Once the volume rises, facing the sinking demand of the market, infrastructure-based enterprises such as Kuaizhuan Car Service can play the role of a service provider, helping upstream OEMs to sink channels in accessories, new cars and even second-hand car business.

The core logic behind this is that the structure of new energy vehicles is much simpler than that of traditional fuel vehicles, the data standards are relatively unified, the service system is more closed, and there are no fundamental problems such as the lack of underlying data, which greatly reduces the difficulty of entering some infrastructure enterprises.

This may be a new pattern brought about by new energy vehicles.

Fourth, the maintenance enterprises make money and value

Finally, let's talk about the acquisition behavior and the amount of the acquisition in the announcement.

The opening paragraph mentions that spending 15.3 million yuan to acquire an auto repair company is very rare in the automotive aftermarket.

According to the third-party information platform, Hengan Guangxin was established in 2010, the early company name was Beijing Hengan Guangxin Technology Co., Ltd., and in 2014 it was renamed Beijing Hengan Guangxin Automobile Maintenance Service Co., Ltd., and obtained three types of automobile maintenance qualifications.

At present, the scope of business includes motor vehicle maintenance (limited color paint using water-based paint and spray paint and spray gun cleaning links are sealed and equipped with exhaust gas collection and treatment devices for motor vehicle maintenance), road freight transportation, installation of pressure vessels, etc.

It can be seen that this is not a traditional auto repair company we know, but based on a technology company superimposed auto repair business.

However, we can extend the question through this acquisition: How can maintenance companies make money while maintaining value?

Making money means that the vast majority of maintenance business owners treat their own store operations as business, the advantage is that they can achieve profitability, flexible operation, can enter and retreat; the disadvantage is of course limited imagination space, which is also what the industry has always said about auto repair companies, or auto repair chains are not valuable.

However, the so-called value or value has several dimensions.

At present, in addition to Tuhu, the value of auto repair companies in financial investment is indeed difficult to reflect, but with the acceleration of integration and mergers and acquisitions, the value of industrial investment is slowly becoming prominent.

First, Tuhu and Tmall car are still expanding the boundary, second, the auto parts supply chain platform is also looking for a second growth curve, and third, cross-border players such as Long-term Logistics and SF are deeply involved, and in the process of integration and mergers and acquisitions, high-quality, distinctive, and differentiated auto repair enterprises have great investment value.

Of course, if you want to maintain independent operation and do not want to participate in the process of integration and mergers and acquisitions, there is no problem at all.

At least, auto repair companies also have strong business value, relying on flexible means of operation, or rooted in a unique field or region, but also firmly occupy a place in the industry.