According to statistics from the Traffic Management Bureau of the Ministry of Public Security, as of the end of September 2022, the number of motor vehicles in the country reached 412 million, of which 315 million were cars, and from the average age of mainland automobiles, it has reached 6.5 years in 2021 (data source: Global Times Prospective Industry Research Institute); At the same time, according to the Ministry of Public Security, the State Administration for Market Regulation, the Ministry of Ecology and Environment, and the Ministry of Transport jointly issued the "Opinions on Deepening the Reform of the Motor Vehicle Inspection System and Optimizing the Work of Vehicle Inspection Services", the mandatory scrapping policy for private cars was abolished, and vehicles that were 15 years old were changed from semi-annual inspection to once a year, which effectively extended the market circulation life of existing vehicles. In this context, the challenges and opportunities of the automotive aftermarket in mainland China coexist.
Focusing on the exploration of core empowerment paths of chain brands such as franchise model, operation model, asset investment, efficient management, and revenue visualization, the competition in the automotive aftermarket has been continuously iteratively optimized. At the same time, in the face of young car owners who are now a new force of consumption, the changing demand for service innovation is also giving birth to more diversified car service concepts. Driven by the changes in the pattern of the automobile maintenance industry and the demand for youth, "Smart Car Maintenance" should come into being.
Valvoline and Tuhu, which have more than 150 years of experience in building lubricant production and sales channels, reached in-depth cooperation on the premise of comprehensive evaluation of the advantages of product supply chain, innovative and standardized operation, digital intelligent stores and lightweight car maintenance chain model: in 2022, a joint venture company "Shanghai Zhisheng Automotive Technology Co., Ltd." was established to build the "Smart Win Maintenance" car maintenance chain brand, opening up a new situation for the "lightweight" chain brand in the automotive aftermarket.
Regarding the establishment of the joint venture, Yu Chang, Vice President and General Manager of Valvoline China, believes that joining the joint venture with Tuhu in China is one of the important strategic actions for Valvoline in the next five years, and through the injection of their respective superior resources by both shareholders, Valvoline will make new explorations in the Chinese automotive aftermarket in terms of customer segmentation and differentiated store models. Xu Jian, Vice President of Tuhu Automotive, said: "The strategic cooperation between Tuhu and Valvoline began in 2016, and in retrospect, the two parties have carried out in-depth cooperation in new product launches, product line cooperation, and digital transformation. This time, the joint venture will be established again, relying on their respective advantages to bring one-stop professional car maintenance services to more car owners.
Headquartered in Shanghai, Zhisheng Automotive, a joint venture between Valvoline and Tuhu, is a lightweight community-based car maintenance chain brand that integrates the system, product, supply chain, marketing and service advantages of the two shareholders. Zhisheng Vehicle focuses on the concept of systematic, digital, standardized, young and lightweight, and achieves fast, professional and trustworthy brand value. The business covers quick oil change, routine maintenance, tire service, wear parts replacement, car sales and car wash beauty.
The first batch of more than ten stores has settled in Qingdao, Shandong Province, and has now fully completed the system construction and supply chain integration, and simultaneously promoted the implementation of operation standards and the unified construction of brand image. At the same time, the investment promotion and franchise work of Zhisheng Yang Auto is also advancing in an orderly manner, aiming for 1,000 stores in 3 years, adding bricks to the top chain brands in the domestic automotive aftermarket.