With the recent release of the 2021 annual reports of some OEMs, the interpretation of the annual reports from all parties has also come one after another: annual vehicle sales, market share, and operating profit have become the focus of attention. Shangchebang noticed that in the interpretation of the series of annual reports, one thing was “deeply hidden”. Although this product is not the main business of the OEM, it is the business with the highest gross profit margin, and it is also the focus of the OEM. A microcosm of high-quality products and services.

The gross profit margin of accessories business is 2-3 times that of other sectors
According to FAW Jiefang’s 2021 annual report, the revenue in 2021 will be 98.751 billion yuan. Among them, the operating income of commercial vehicle products was 91.119 billion yuan, accounting for 92.27% of the revenue; the spare parts and other operating income was 7.632 billion yuan, accounting for 7.73% of the revenue.
From the perspective of gross profit margin, the gross profit margin of commercial vehicle products is 9.51%, a slight increase of 0.68 percentage points compared with 2020; it can be seen from the annual report data that no matter by industry, product or region, the gross profit margin does not exceed 10% for a single item , but the gross profit margin of “spare parts and others” reached 17.37%, almost twice that of other sectors, an increase of 4.52% compared to 12.85% in 2020, the highest year-on-year increase in gross profit margin among all sectors.
We also saw similar data in Sinotruk’s annual report. According to the 2021 annual report of Sinotruk, the annual revenue is 56.099 billion yuan, of which vehicle sales are 47.764 billion yuan, accounting for 85.15% of revenue, and accessories sales are 8.193 billion yuan, accounting for 14.60% of revenue. The sales of accessories increased by 12.64% year-on-year compared to 2020, and it is the only segment in the 2021 annual report revenue project that achieved positive year-on-year growth.
From the perspective of gross profit margin, the data shows that in 2021, the gross profit margin of Sinotruk vehicle sales will be 5.94%, and the gross profit margin of accessories sales will be 15.03%. It is 2-3 times that of other plates.
The dilution of gross profit from vehicle sales and the “upstream” of accessories sales in the sales revenue of OEMs reminded the author of a similar situation in foreign OEMs. In the market changes in which the profit of vehicle sales is diluted, the profit sources of foreign vehicle manufacturers have also experienced changes in profit and operation modes from vehicle sales to parts sales, financial services, and the provision of series solutions. According to the data, among the sales revenue of foreign OEMs such as PACCAR, Scania, MAN Truck and Bus, Navistar, Volkswagen Truck and Bus, and Volvo Group, the proportion of revenue from accessories, maintenance and financial services has already More than 20%, even nearly 50%.
Obviously, domestic OEMs are also going through this change. In addition to the above-mentioned outstanding sales performance of Jiefang and Sinotruk, the auto finance segment of Dongfeng Motor Group, a subsidiary of Dongfeng Commercial Vehicle, also performed well. Its 2021 annual report data shows that the auto finance segment sales The revenue was 8.576 billion yuan, an increase of about 956 million yuan from 7.62 billion yuan in 2020, an increase of about 12.5%.

High gross profit and high-quality products and services complement each other
The profit point is the focus of competition, and the focus of competition directly drives the focus of OEMs on parts and related services. With the upgrade of commercial vehicle emissions and the continuous improvement of vehicle electrification, OEMs, as the leader of aftermarket products and services, are giving full play to their leading role, focusing on high-quality products and services from the source.
In terms of the construction of the front-end parts resource platform, FAW Jiefang, guided by the “stable and first-class resource network strategy”, aims at the development direction of the new four modernizations, strengthens the construction and control of the supplier platform, and continues to build a high-quality and low-cost supporting system. In addition to the three major assemblies of engine, transmission and axle, which are mainly produced by FAW Jiefang, Jiefang also deploys resources for smart car software and hardware, aftermarket, and intelligent network services; other related core components are strategically cooperated and joint ventures Cooperation and other methods, deepen cooperation with excellent suppliers at home and abroad, and meet market demand with high-quality products.
In terms of back-end spare parts services, Jiefang can “think what users think”, and according to the individual needs of the market and users, it has launched “TQC” maintenance see brand, and deployed “urea injection system maintenance kits” and “National VI post-processing sensors”. A variety of spare parts combinations such as “maintenance kit” and “urea tank system maintenance kit” can meet the needs of users in the aftermarket.
To ensure high-quality services, FAW Jiefang has built a complete marketing service system. At present, Jiefang has a marketing service network consisting of nearly 900 dealers, over 1,000 service stations, more than 50 spare parts centers and nearly 100 spare parts dealers, covering more than 200 prefecture-level cities across the country with a capacity of more than 1,000 vehicles. 96%, and the national average service radius is 47.5 kilometers, providing users with 24-hour all-weather efficient and high-quality services.
Similarly, China National Heavy Duty Truck also has relatively complete sales channels. From the aspects of parts supply channels, service efficiency improvement, and service policy improvement, it has continuously optimized its service network and built a modern marketing service that covers the whole country, is reasonably distributed, and operates efficiently. system. At present, Sinotruk has 1,200 service stations, 52 regional spare parts center warehouses, 16 spare parts sales centers, 200 DPF ash cleaning centers nationwide, and more than 230 million yuan of national VI special spare parts reserves. By optimizing the service network layout, deepening the reform of accessories, optimizing the informatization process, shortening the service radius, and realizing the transformation and upgrading of “family” services; using information platforms such as “smart heavy truck” and “first-line communication” to deeply analyze customer needs and improve the whole life Cyclical value creation and competitiveness in the stock renewal market.
High-quality parts and services are just a microcosm of the multi-dimensional focus of OEMs. In the past few decades, international auto groups have done everything in the auto service business (including accessories, finance, used cars, solutions, etc.). a lot of work. In the current situation that the profit of domestic vehicle manufacturing is getting thinner and thinner, creating high-quality service business according to the characteristics of market development stage, product technology upgrade, and user demand change will be an important way for vehicle manufacturers to obtain market, users and profits. It will also be the focus of future market competition.