It has been ranked top five in the category in three months, and Shenzhen sellers have sold 1 billion in half a year!

It has been ranked top five in the category in three months, and Shenzhen sellers have sold 1 billion in half a year!

The auto parts category is also very popular.

In Europe and the United States, the car culture is quite strong, but the reality is that the local labor costs are high, causing many consumers to choose to repair their own cars. According to foreign media data, the online sales growth rate of auto parts in 2021 reached 14%, and the total transaction volume has reached more than 60 billion US dollars.

With the rapid growth of the online auto parts market, many sellers have begun to invest in this popular market, and there are many high-potential categories that are worth exploring. As one of the biggest sellers of auto parts on Amazon, Daotong Technology is no exception and is deepening its main market by increasing R&D investment.

With a profit of 85 million in half a year, Daotong Technology has increased its investment in this category

Recently, Shenzhen Datong Technology, a major auto parts manufacturer, released its semi-annual performance report for 2022. The report data showed that Datong Technology's operating income in the first half of 2022 reached 1.033 billion yuan , a decrease of 1.24% compared with the same period last year; the net profit attributable to shareholders of listed companies was 0.85 billion yuan , a decrease of 60.96% compared with the same period last year .

The company also gave an explanation for the decline in net profit, saying that it was due to the sales and R&D expenses generated by the new energy business in the first half of 2022 totaling 78.224 million yuan. As of the end of the reporting period, the company's R&D investment accounted for 27.46% of its operating income , and the company had 1,187 R&D personnel , accounting for 73.96% of the company's total number of employees.

At present, the company focuses on the research and development, production, sales and services of automotive intelligent diagnosis, detection and analysis systems and automotive parts. The specific products are new energy series products, such as AC charging piles, wall-mounted DC charging piles, etc .; automotive comprehensive diagnostic products, such as code reading cards, passenger car & commercial vehicle comprehensive diagnostic products, etc.; TPMS series products, such as TPMS system diagnostic matching tools, tire pressure sensors, etc.; ADAS series products, such as ADAS intelligent detection and calibration tools, etc.

It is understood that the company's products are mainly sold through Amazon and offline auto parts chain retailers , and the products have covered more than 70 countries and regions around the world, including North America, Europe, China, and Asia Pacific. Its main brand Autel often rushes into the Amazon auto parts category BSR list . Its AC charging pile products landed on Amazon's US site in June 2022 and have now entered the top five in the category.

However, for Daotong Technology, its overseas operations also have certain risks. Since the company's overseas business is relatively concentrated and to a certain extent relies on the North American market, it is vulnerable to the impact of the US government's increasing tariff scope and tariff collection on Chinese imports.

At the same time, in terms of raw material procurement, a small number of the company's raw materials are originated in the United States or belong to American brands. If Sino-US trade frictions intensify, in order to prevent market fluctuations, the company may further increase its inventory, which may lead to an increase in raw materials and related capital occupation, thereby increasing the company's operating costs, compressing the company's profit margins, and having a significant adverse impact on the company's operating performance.

Although there are certain risks in selling auto parts overseas, due to the strong automotive culture and high labor costs in Europe and the United States, consumers are more willing to buy auto parts to repair their own cars, so other car-related products are very popular among consumers. As far as auto parts are concerned, there is still a lot of room for development in the overseas online market.

Online demand is growing rapidly, and there are still these high-potential products in the auto parts market

As a country on wheels , the United States ranks first in the world in terms of both car ownership and per capita mileage . Since 2020, the prices of American cars and their derivatives have risen by 55%-68% . In contrast to the high prices in the new car market, the used car market is also booming, especially auto parts products.

According to some sellers, exporting auto parts has a high advantage. " There are not many Chinese sellers of auto parts at present, and the competition is relatively small . This market has not received much attention, so it is worth a try, " said one seller.

Since the outbreak of the epidemic abroad, some auto parts manufacturers have stopped production, which has directly led to delays in the supply of parts. In addition, the online sales of well-known auto parts brands such as Bosch in Germany are not as strong as offline sales. The sellers of auto parts products online overseas are mainly small and medium-sized sellers, and there are relatively few Chinese sellers. On the other hand, Chinese auto parts companies have maintained stable production capacity under the epidemic.

In fact, compared with other categories, original auto parts are necessities in the United States, and sales are very stable. Moreover, auto parts products are not seasonal like clothing, nor do they need to maintain novelty like 3C products. Generally , they are updated very slowly, and basically there will be no major changes in the next 5-10 years. In terms of export markets, China's auto parts are mainly exported to Asia, North America, and Europe.

According to data from an overseas survey, different car models are popular in different regions, and the auto parts products required are also different.

Consumers in the US market prefer to buy pickup trucks , among which pickup truck exterior products such as front and rear bumpers and trunk lids are hot-selling products in the US station; luxury brand cars are popular in the German market , and consumers have relatively high quality requirements for the parts and accessories of the vehicles they purchase. The hot-selling products there are mainly injection molded material foot mats, trunk mats, and towing products for campers; consumers in the UK market prefer to maintain their vehicles at home, so the hot-selling products at the UK station are mostly car washing tools, washing, polishing and waxing products.

Some institutions have predicted the share of global online automotive aftermarket and parts sales in 2022, with France ranking first, followed by Germany and the United Kingdom.

The categories of auto parts with high potential mainly include the following: tires . Compared with other parts, tires are consumables and need to be replaced after a certain mileage. In addition, foreigners are keen on DIYing their own cars, so tires that are good-looking, of good quality, and can bring visual shocks are very popular; seats, floor mats and related interior accessories are common consumables for automobiles.

In addition, brakes and brake accessories are also high-potential categories. According to relevant data, the online demand in the European and American terminal markets is about US$750 million, and most of the consumers are located in the United States and Germany. The unit price of the products is mostly above US$120.

In fact, eBay analysts have pointed out earlier that Chinese auto parts sellers have begun to transform into cross-border e-commerce. They mainly sell products such as light bulbs, motorcycle handlebars, and rearview mirrors because they are consumable products that are lighter, easier to deliver, and have a high repurchase rate.

Data released by the General Administration of Customs also showed that China's cumulative exports of auto parts in the first half of this year reached US$23.47 billion, a year-on-year increase of 10.2%. For sellers, the export of auto parts related products has a certain market, and they can decide whether to consider this market based on their actual situation.

Shenzhen

Revenue

Auto Parts