China's booming car sales and declining car prices are boosting the development of the accessories market which is luring a growing number of investors.
The biggest vehicle after-sales market in the east China region, the Sino Auto Accessories Town, began operating yesterday.
Located in Kunshan, Jiangsu Province, next to Shanghai's Auto City in Anting, the auto hub has a total investment of 300 million yuan (US$40.54 million) according to Tao Xiaohua, chairman of Great SH Sino Auto Accessories Town Co Ltd, the operator.
It covers an area of 200,100 square meters and distributes car accessories, vehicle maintenance equipment and spare parts for vehicle modification.
Among hundreds of auto parts manufacturers and distributors from home and abroad which booked places in the town, overseas companies included the US's largest vehicle lifter maker Rotary Lift Corp, Chassis Liner Corp (the world's third largest vehicle collision repair firm), Japan's Empire Corp and South Korea's Mashmaro Corp.
Targeting Shanghai
The Sino Auto Accessories Town is the latest retailer targeting consumers in Shanghai, which already has more than 10 auto accessory markets including the Shanghai International Auto Accessories Trade Center in Anting in west Shanghai and Chunshen Auto Parts Market in downtown area.
Experts say the expanding vehicle population increases demand for auto accessories such as in-car audio systems and services such as maintenance and modification.
"The after-sales market is generating more profits as car prices drop and the vehicle population increases," said Jia Xinguang, an independent auto analyst who formerly worked for the China Association of Automobile Manufacturers.
China is now the world's second biggest auto market with new car sales expected to hit nine million units this year with a 20-percent jump each year.
But the industry is not without its problems.