From asphalt roads in cities to hardened village roads in rural areas, cars carrying people and goods carry the happy lives of thousands of households, quietly driving a huge new service market.

From personalized automobile insurance to specialized product services for new energy vehicle insurance, and then to new energy vehicle battery rental and automobile financing leasing, new services in the automotive aftermarket, including financial services, continue to emerge, meeting the diverse needs of consumers through innovative supply.

More abundant supply of automotive financial services

"To do business, it is necessary to retain working capital, and the burden of buying a car in full is a bit heavy." In Shenzhen, Guangdong Province, Wang Shen, the head of a small and micro enterprise engaged in electronic trade, saw a luxury brand second-hand car at a second-hand car dealer, and bought it for 680000 yuan. He learned from the automotive finance commissioner that Bank of Communications provides second-hand car consumption loan services, so he decided to take out a loan to buy a car.

"Online application and offline verification took only 3 hours, and the bank issued a car loan of 470000 yuan," said Wang Shen.

In China, after years of development, the automobile market has accelerated its shift from first purchase to demand for additional and replacement purchases. The characteristics of low frequency, high price, emphasis on experience, and service in automobile consumption have become more prominent. The rise in second-hand car consumption has driven the flourishing development of the second-hand car financial market, thereby driving the continuous growth of the second-hand car market.

Recently, Beijing resident Liu Liang spotted a car in an online live broadcast room of a used car dealer. "I have plans to buy a car and learned that Ping An Leasing provides phased financing leasing services, which can reduce the burden of purchasing a car. As soon as I add up, I immediately place an order." "We provide vehicle evaluation and management services for second-hand car buyers, screening out accident cars, bubble cars, and tampering cars in advance to help consumers choose more authentic and reliable car sources." The person in charge of Ping An Leasing explained.

In recent years, financial leasing services have become increasingly popular among consumers due to their advantages, such as low down payment ratio and a wide range of vehicle models to choose from. In 2022, the Ministry of Commerce and 17 other departments issued a notice on several measures to revitalize the circulation of automobiles and expand automobile consumption, proposing the orderly development of automobile financing leasing, encouraging automobile production enterprises, sales enterprises, and financing leasing enterprises to strengthen cooperation and increase the supply of financial services. Several relevant departments in Shanxi, Henan, Guangdong and other regions have issued policies encouraging companies with automotive industry backgrounds to establish financing leasing companies or joint financing leasing institutions to develop their automotive financing leasing business.

Taking Industrial and Commercial Bank of China as an example, it has currently established strategic cooperation with more than 30 high-quality automobile manufacturers and dealer groups, providing consumers with a full chain and scenario financial services from car purchase to repair and maintenance, vehicle decoration, and other aspects. From a national perspective, the demand for second-hand car credit is growing rapidly, and financing leasing is flourishing. Financial institutions are competing to expand the automotive finance market.

"Against the backdrop of expanding domestic demand and promoting consumption in China, favorable policies in the field of automotive finance have been continuously introduced, bringing new opportunities for the development of the automotive finance market and new impetus for the expansion of the automotive aftermarket." said Pan Wei, a researcher in the automotive industry at China Merchants Bank Research Institute.

The supply level of the car insurance market is constantly improving

"My car was scrapped due to an accident. After reporting the incident, the insurance agency quickly determined the total loss and collaborated with 4S stores to launch a new car replacement service. I bought a new car by covering a portion of the difference in the insurance coverage, which was much more favorable than the market price," said Chen Sheng, a resident of Nan'an, Fujian.

In the automotive aftermarket, insurance plays an important role. Cars are large consumer goods, and vehicle damage involves a large amount of money. There are also certain personal risks during the driving process. Insurance is essential for consumers to buy and use cars with peace of mind. In recent years, the automotive industry has accelerated its development, driving the continuous improvement of the supply level in the car insurance market and stimulating new demand for automotive consumption.

The scale of the car insurance market has expanded. The continuous increase in the number of motor vehicles and insurance applications has driven the significant development of car insurance business. In 2003, China's car insurance premium was 54.462 billion yuan. By 2022, the original insurance premium income of property insurance companies for motor vehicle insurance reached 821 billion yuan.

The level of risk protection has been improved. The Guiding Opinions on Implementing Comprehensive Reform of Automobile Insurance have been implemented since 2020, increasing the total liability limit of compulsory traffic insurance from 122000 yuan to 200000 yuan, and increasing the liability of commercial automobile insurance.

"Compared to the commercial car insurance I purchased three years ago, the premium has decreased by 300 yuan, but the coverage has not decreased. Previously, I needed to purchase separate types of insurance such as glass breakage insurance, but now the relevant coverage responsibilities are included in the main insurance." said Guo Xinxin, a resident of Zhengzhou, Henan.

According to data from the China Insurance Industry Association, in 2022, the number of motor vehicles covered by compulsory traffic insurance increased by 4.3%, the coverage amount increased by 4.4%, and the average car premium decreased by 0.5%. "The comprehensive reform of car insurance benefits consumers and is helping to tap into the potential of automobile consumption," said the relevant person in charge of the China Insurance Industry Association.

The extension of the automotive consumption chain has given rise to customized services. At the Xiamen International Racing Culture Festival held last year, professional competitions were exciting and new experiences emerged. Local insurance institutions customize insurance coverage for relevant event participants, including acute medical expenses, accidental medical expense compensation, accidental disability compensation, etc., to promote racing culture.

"With the increasing abundance of car campsites, self driving tours, and various levels of sports events, the insurance industry can further leverage its professional advantages, use technological means, and provide risk reduction services. For example, in the preparation stage of the event, a comprehensive risk assessment of the venue, facilities, etc. is conducted, safety advice and risk protection are provided, insurance leverage is used to carry out risk management, and emergency services are provided during the event. This not only can better stimulate the consumption demand of the automotive aftermarket, but also open up new tracks and spaces for the development of the insurance industry itself." said Wang Xiangnan, Deputy Director of the Insurance and Economic Development Research Center of the Chinese Academy of Social Sciences.

The service content of the new energy vehicle insurance market is accelerating innovation. The scale of new energy vehicles continues to expand, promoting the rapid development of new energy vehicle insurance business. In the first half of 2023, the underwriting of new energy vehicles by PICC Property&Casualty Insurance increased by 54.4% year-on-year, while the premium income of new energy vehicle insurance by Taiping Property&Casualty Insurance increased by 65.1% year-on-year. An industry research report predicts that the premium scale of new energy vehicle insurance will reach over 500 billion yuan by 2030.

The China Insurance Industry Association released the "Exclusive Provisions for Commercial Insurance of New Energy Vehicles (Trial)" at the end of 2021. Exclusive car insurance includes the most important "three electric" systems in new energy vehicles in the coverage of vehicle damage insurance, and also includes charging stations and other external equipment in the coverage, enhancing protection for new energy vehicle owners. In recent years, there have been numerous specialized products and services such as 40 minute rescue power up, three battery extended warranty for new energy vehicles, and battery excess attenuation insurance products, which have also made consumers feel more confident when choosing new energy vehicles.

Last November, BMW (China) Insurance Brokerage Co., Ltd. officially obtained the insurance brokerage business license. Since 2018, car companies such as BYD, Ideal, and NIO have entered the car insurance industry one after another. Experts believe that car companies have a better understanding of vehicle performance and customer needs, and have certain advantages in risk assessment. Entering the insurance market is expected to promote precise pricing of car insurance and reduce consumption costs.

New service supply supports expanding the automotive aftermarket

From the automotive consumer credit needs of car buyers to the financial service needs of various parties such as shared car operators, after-sales parts service providers, and intelligent terminal equipment providers, the supply of new services continues to support the expansion of the automotive aftermarket.

Expand innovation space and promote the development of new business formats. "Previously, loans could only be used to buy cars. In the future, if you want to add features to your car, such as car clothing film, navigation equipment, etc., you can also borrow from an automotive finance company to purchase them." After listening to the latest policy introduced by the salesperson at the 4S store, Zhang Chi, a Beijing citizen who is currently looking at cars, was very excited.

Last year, the revised Management Measures for Automobile Finance Companies were implemented, opening up policy space for automobile finance companies to expand their business scope, expand their business areas, and enrich financing channels.

More diverse products to meet segmented needs. "If you buy the battery all at once, the price exceeds your psychological expectations. If you choose to rent the battery, you only need to pay rent now, and you can upgrade the battery or enjoy battery replacement services in the future." At the end of October last year, Zhou Binpeng, a resident of Hefei, Anhui, ordered a NIO car because he was interested in battery rental services.

With the further increase in the penetration rate and ownership of new energy vehicles, consumer demand for product services has become more diversified, and the development of the new energy vehicle aftermarket has brought new opportunities for automotive finance.

Better service and enhanced customer experience. "What I am interested in is this red flag car," Jilin Changchun resident Dou Haoning showed reporters the vehicle information on his phone.

"Now you can see the three-dimensional panoramic view of the vehicle online, and the information is clear at a glance," said Dou Haoning. This form of online car viewing reduces the time and energy costs of offline car viewing.

The online viewing and purchasing of cars has driven the active launch of automotive financial services. Open the "FAW Auto Finance" mini program launched by FAW Auto Finance Co., Ltd., and you can calculate consumer loan amounts online, as well as provide diversified financial solutions for different car models. Consumers can visually see the down payment and monthly payment amounts, and loan applications, credit evaluations, and repayments can also be completed online.

"In the future, participants in automotive financial services can focus on various aspects of the 'automotive ecosystem' to provide efficient and high-quality financial services for the development of the automotive aftermarket," said Wang Qian, Vice Dean of the School of Economics at Jilin University.