Liu Peng: How Michelin Chi Chi Soared in China

He promoted China's Michelin business

He led Michelin Chika to create countless firsts

He, shared Michelin's successful experience with the world

He is Liu Peng, Vice President/Sales Director of Michelin (China) Investment Co., Ltd.

Michelle (China) Investment Co., Ltd. Vice President / Sales Director Liu Peng

Michelle (China) Investment Co., Ltd. Vice President / Sales Director Liu Peng

Today, he came to tell us about many stories that are not known to the industry in the course of China's development of Michelin's business.

Start in self-employed

Michelin tire brand logo

Michelin tire brand logo

Starting 15 years ago, it was the time for major tire brands to give retailers or quick repair shops "licensing". At that time, there were many quick repair shops for major tire companies. In 2003, Michelin began operating the Chi-plus store in China. The purpose was very simple at the time: to provide car owners with convenient repair shops.

In fact, there is no solid foundation behind the tire brand's award to retailers. The most direct purpose is to sell more tires. Until the 2006 “Flop” incident broke out: tire retailers easily switched to other tire brands in the face of the temptation of other brands for high brand switching fees. There was no loyalty at all, and Michelin’s increase was also met. Was "flopped."

How to solve these problems? After comprehensive assessment, Michelin chose the franchise model

In 2006, Michelin added the first direct-operated store in Beijing. "In our own store, we learned too much." Looking back at that time, Liu Peng filled with emotion. "In personal experience, we observe, compare, experience, go from hardware to software, and manage The use of tools and equipment, from a single product to expanding projects, continues to improve.

This learning is completely different from learning in customer stores. Afterwards, Michelin successively opened six direct-operated stores in Shanghai and Guangzhou. In the following three years, Michelin immersed himself in the operation of Chijia stores. Through self-employment, Michelin’s team has accumulated rich practical experience, and they are effective in the field. Efficiency and other aspects are much higher than franchise retailers, and the store's gross profit doubled in three years, well above the market average.

Launch franchise chain project

On October 16, 2009, Michelin Chi Chi ushered in its first milestone in the development history: the launch of the franchise chain project at the conference venue of 800 people at the China World Hotel in Beijing. The first concession contract signed by Michelin Chiga was signed on October 19. Subsequently, Michelin joined the rapid expansion period. In 2010, only 700 franchise stores were renovated and 10,000 people were trained. That year, Michelin's team has experienced extraordinary hardships. At that time, there were no large-scale chain stores on the market and it was a unique way to increase the market. Since then, Michelin has maintained a momentum of rapid growth. By 2012, it has become the benchmark for the fast-tracking chain industry.

In 2012, Liu Peng was sent to Michelin's French headquarters to lead and promote Michelin's business model globally. In 4 years, the Chiga project successfully landed in 23 countries.

"From 2012 to 2014, the new model of Internet+ is rushing into the aftermarket of China's auto market. Crazy capital is catching traffic and making quick money at any cost. It attempts to leverage the asset-light model to leverage on the asset industry and seek rapid returns. The market is very impetuous. Liu Peng talked about the view that hot money is pouring into China's auto aftermarket. "But after that, the characteristics of the market have determined that it is impossible to rely on the light asset model to shake. Fortunately, the wave of hot money has quickly subsided." , Closing off, selling off, selling, the market will eventually return to rationality."

After returning to China, Liu Peng served as vice president and sales director of Michelin (China) Investment Co., Ltd., responsible for sales of Michelin cars, trucks and motorcycles in China. His development model for China's tire business is very clear: At present, sales channels for tires include quick repair service stations, tire stores, and many other aspects, while tire stores are still a relatively large proportion of channels, accounting for approximately 50% of the market's share. The overseas large-scale supermarket model has not yet formed in China, but it has developed very well in South America and North America. In the process of the development of the post-market in China, the emergence and development speed of e-commerce channels is amazing. When e-commerce companies have just emerged in Europe and the United States, many people do not believe that they can survive. The industry also asserted that it is impossible to use e-commerce to sell tires. However, e-commerce channels are not surprising at present.

"The only motivating factor behind the change in the automotive aftermarket is consumer change, not capital. The auto repair industry is a low-frequency industry, but the business of replacing oil and changing tires (including tires for positioning and tire repair) is high-frequency. China's average car has about one tire repair business each year, which brings in the behavior of entering the store, which in turn will lead to future cross-trading and thus generate more business."

"The leader in the market segment began to gradually increase his business and move closer to the terminal; the auto group and the host began to release new fast repair brands and moved closer to the middle. Finally, the entire market competed in the middle, and the fast repair chain business gradually converged: the oil , tires, rapid repair and other business.” Liu Peng said in the analysis of China's auto aftermarket market trends, “Michelin must jointly link manufacturers, data providers, logistics service providers and e-commerce, because they can change the domestic auto after-sales service. The industry is a pioneer in the industry."

Prosperous Aftermarket Wasteland

Liu Peng’s definition of the aftermarket in China is a thriving wasteland. He interprets this statement from three aspects.

First of all, from the perspective of national laws and regulations, the current automobile aftermarket in China is still relatively lacking. How does the government department manage the irregular behavior of the automotive aftermarket and how the developing automotive aftermarket enterprise integrates with the development of the urban environment...

Second, there is a lack of data. In developed countries, car ownership data and brand data of various regions can be found through relevant channels and are free of charge, providing a reference for the development of enterprises. In addition, the fitting data of accessories products are also provided by the corresponding companies in developed countries, and some can be obtained only by paying a small fee. In China, these basic data are lacking and imperfect.

The second is the shortage of after-sales talents. The domestic auto aftermarket has developed rapidly, but the matching talents and training are very lacking. This restricts the development of the entire automotive aftermarket from certain aspects. In addition, the community's respect and recognition of maintenance personnel is also very lacking. In developed countries, consumers' respect for maintenance technicians is no different from other industries, and they are willing to pay for their skills and services. The automotive aftermarket is essentially a service rather than a trade, and it requires consumers to understand the value of the service.


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