In recent months, Shanghai General Motors (SGM) has announced the nationwide launch of its new "menu-style maintenance" service packages starting November 15th. By choosing Package A, customers can get a 5,000-kilometer maintenance service at any Buick special service center. In addition to replacing the original oil filter and motor oil, they will also enjoy up to 20 free testing items. Just a month ago, Shanghai Volkswagen also reduced the prices of parts for models like Passat and Polo across the board, covering over 100 commonly used spare parts, with some dropping by as much as 80% and an average reduction of 25%. These moves from two major joint venture companies signal that fierce competition among automakers is now shifting from vehicle sales to after-sales services.
The auto industry's focus on the aftermarket is not new. Since the beginning of this year, car manufacturers have been implementing various price cuts on vehicles, but market improvements have been limited, and the issue of delayed purchases remains. To address this, some manufacturers are using lower spare parts costs as a new promotional strategy. For example, Nanjing Fiat was one of the first to reduce accessory prices, announcing discounts on 50 types of consumables early this year. Then in May, Southeast Auto adjusted prices for parts of models like Lioncel and Fulica, involving 500 components, with over 200 common parts seeing an average drop of 50%.
In mid-August, Hainan Mazda also cut prices on more than 200 parts for its Premar and Fumei models, with an average reduction of 18% and some parts falling by over 50%. The most impactful move came from Shanghai Volkswagen, which lowered the prices of parts for Polo and Passat starting October 1st. At its designated service centers, the prices of original parts for these models, including those often involved in insurance claims, were reduced by an average of 25%, with some parts dropping by as much as 80%.
Since the start of the year, the rising cost of spare parts has been a growing concern, but the recent price cuts reflect a broader trend of declining vehicle prices. Consumers are now benefiting both when buying new cars and when maintaining their vehicles. According to statistics, more than 10 models, including Polo, Passat, Fumeilai, Lioncel, Palio, Sienna, and Chery Fengyun, have already reduced their spare parts prices.
Shanghai GM’s announcement of maintenance and inspection discounts has brought the ongoing price war in the after-sales sector to a peak. Industry experts believe that these price reductions will have a long-term impact on addressing high auto parts and maintenance costs in China. Moreover, the competition extends beyond manufacturers—dealers are also aggressively competing in the aftermarket.
Many 4S stores have shifted their profit focus from vehicle sales to after-sales services. In Guangzhou, several dealers have introduced free inspections and reduced maintenance and material costs. Some, like the AEC Group, have even launched auto supply supermarkets to compete in the after-sales market. One dealer revealed that as long as the new car is sold without loss, he believes that car owners will eventually need maintenance, which is the main source of profit. Some powerful dealers have reported that after-sales profits now account for a significant portion of their total revenue, with some reaching up to 50%.
The steady growth of the car ownership rate in the past two years has led to a rise in maintenance demand, and after-sales revenue has seen consistent growth. This has attracted attention from dealers as vehicle sales profits decline. The "tempting" opportunity in the after-sales market has also drawn interest from multinational component companies. Bosch Trade, the world's second-largest parts supplier, plans to open 20 maintenance chain stores in Guangzhou this year. Meanwhile, several U.S., Singaporean, Japanese, and Taiwanese companies are preparing to build large-scale repair factories in the city, offering five-star service and full-computer management.
These new players are setting a high standard, but their pricing remains competitive. Whether it's OEMs or dealers, reducing spare parts and after-sales maintenance prices is becoming a key strategy to boost new car sales. For car owners, high spare parts prices have always been a pain point. Replacing parts accounts for a large portion of maintenance costs, so many consumers are calling for zero-price adjustments from manufacturers.
To reduce production costs, joint-venture manufacturers continue to increase the localization rate of spare parts, and large-scale production helps lower costs. Additionally, tariff reductions have made imported parts more affordable. These factors contribute to the downward trend in part prices. At the same time, foreign suppliers such as Delphi, Bosch, and Michelin have entered the Chinese market through joint ventures, while domestic companies are also developing their own automotive parts. As production scales up and technology matures, costs are gradually decreasing, leading to lower prices.
Despite the price cuts, the profit margins of OEMs remain substantial. In foreign markets, 39% of gross profit from vehicle manufacturers comes from spare parts, compared to just 18% from new car sales. In China, the profit margin on OEM parts can reach 40%. Previously, car owners criticized 4S shops for high maintenance costs, citing expensive labor charges and premium parts. However, with the recent price reductions, manufacturers are passing on savings directly to consumers.
For instance, Shanghai Volkswagen’s maintenance for Passat used to yield a 40% profit margin. After adjusting part prices and limiting profit rates, the profit per maintenance session dropped significantly. The cost of a single maintenance session for Passat has fallen from 520 yuan to 400 yuan. Some 4S stores in Guangzhou have even started offering free lifetime maintenance. Many multi-brand repair station operators believe the price war is far from over, and the current adjustment in parts prices is just the beginning.
As the car sales battle evolves, the future may see a greater emphasis on after-sales service and parts pricing. Price reductions are not just a trend—they are a natural outcome of market forces.
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