The Frontline | The Chinese Model Revolutionizes the Hundred-Billion Blue Ocean Market. Continental and CassTime Join Hands to Facilitate the Digital Transformation of the Automotive Aftermarket.

In the ever-changing automotive industry, the tire industry, as a primary automotive supplier, is also undergoing subtle and significant changes.

In 2023, the global tire industry's total output value exceeded 180 billion US dollars, with a production volume of nearly 2 billion pieces. Among them, the demand in the replacement market accounted for more than 70%. According to data from the Michelin official website, the global sales ratio of original equipment and replacement from 2017 to 2023 has increased from 1:2.6 to 1:2.8. Thus, it can be seen that the replacement of tires is the main market for future tire sales.

Tang Mingyou, General Manager of Continental Tire (China) Co., Ltd., delivers a speech (Source: Official Enterprise)

With the continuous increase in the market share of new energy vehicles, it has brought a new round of challenges to tire manufacturers. The characteristics of increased vehicle weight, fast starting, and high horsepower make the original tire products perhaps difficult to meet the needs of users and manufacturers to this day. At the same time, in the face of a rampant counterfeit and non-uniform repair standards in the automotive aftermarket, how to enable consumers to buy "genuine products" and replace tires with confidence has also become a major problem for tire manufacturers.

Continental, with a century of tire manufacturing experience, has keenly sensed the changes in the industry. As one of the foreign enterprises that first entered the domestic market, after experiencing the huge changes in the Chinese supply chain in the past nearly 20 years, Continental may now have a more mature understanding of the Chinese market. In the context of an era of overcapacity, if it wants to forge ahead in the tide again, a transparent supply chain and an improvement in high-quality services have become indispensable links.

Empowered by the Digital AI Platform, Driving the Supply Chain towards "Transparency".

The signing ceremony of the strategic cooperation between Continental and CassTime (Source: Official Enterprise)

Auto parts are like automotive medicines, and the scheduling process from production to vehicle installation is complex, involving an average of about 10 nodes and the scheduling among multi-level distributors. It is an extremely challenging problem to serve car owners well in this complex market. Although the Chinese are diligent and the local efficiency in the automotive industry is high, the overall efficiency is limited due to the lack of unified digital and service standards, as well as the platform and infrastructure throughout the entire process.

Facing such problems, the advantages of the Internet platform become prominent. As an automotive aftermarket technology company that has been established for 10 years and is backed by top investment institutions such as Sequoia and Shunwei, CassTime can connect auto parts suppliers and repair shops. By building a digital base for upstream manufacturers that is digitalized, visible, controllable, and globally efficient, it can achieve supply chain transparency and visualization.

For example, CassTime can use the vehicle's VIN code and parts codes as the basis for digitization. Through digital optimization of the process, the efficiency of parts circulation and production supply can be improved. After the parts are digitized, the accumulation of market data and the improvement of computing power will bring about a qualitative change and enhance the efficiency of the entire ecosystem.

On the other hand, the use of AI large models will further expand the coverage of digital service entry scenarios. For example, CassTime's "AI Mechanic Assistant" will provide repair shops with faster fault diagnosis, installation guidance, and parts knowledge. When facing fragmented information and knowledge coverage in the entire supply chain, the integration of AI tools in vertical fields will optimize the entire process and greatly accelerate the progress of "cost reduction and efficiency increase" in the entire supply chain.

Tire Quick Distribution Opens Up an Incremental Market for Repair Shops

Jiang Yongxing, the founder and CEO of CassTime, delivers a speech (Source: Official Enterprise)

With the arrival of the new energy era, the repair shop channel is experiencing a difficult situation where traditional businesses are gradually shrinking. Against this background, the tire business has emerged as a new growth opportunity.

However, the tire business has many difficulties. It has a complex range of specifications, a large volume, and high logistics costs. The traditional supply chain model is difficult to adapt to these characteristics and cannot effectively meet the demand. This makes repair shops face severe challenges in many aspects, such as product selection, profit acquisition, distribution services, and after-sales services, when trying to expand the tire business.

To solve the problems faced by the repair shop channel, Continental, through the deep integration with CassTime's digital system, uses the Continental CDMS fully automatic order processing system, combined with the layout of nearly 200 front warehouses of national distributors, to provide strong support for the tire quick distribution service. Through the collaborative model, each link of the supply chain becomes transparent and visible, allowing repair shops to quickly and clearly understand product information, order inventory status, and delivery timeliness, and obtain official price references, eliminating information barriers. At the same time, consumers can also be guaranteed to get genuine Continental products.

Continental Tire will provide training to help repair shops master the SOP of tire installation and disassembly, and improve the care level of vehicles and tire rims, so as to provide more detailed and in-place services. The aim is to improve the professional service level of repair shops by setting strict hardware and software standards.

For stores, the joint certification of CassTime and Continental can provide standardized products, services, and operating processes, helping stores improve management efficiency and reduce operating costs. For car owners, choosing a joint-certified store can enjoy more professional and cost-effective services. This not only increases the satisfaction of car owners with the store but also increases their dependence and trust in other services of the store.

Through the combination of the Internet platform and manufacturers, repair shops have more confidence in the tire quick distribution business and are more willing to accept this incremental business model. At the same time, the standardized process also makes consumers more assured and at ease when facing tire replacement, further increasing user stickiness.

Just as Tang Mingyou, General Manager of Continental Tire (China) Co., Ltd., said: "There are two pain points that need to be solved for Chinese car owners when changing tires. One is the temporary decision, and the other is the immediate satisfaction."

If it were in the past, behind these two requirements lies an efficient and fast tire supply chain, which the traditional tire supply chain model is difficult to meet. One is that distributors cannot deliver the goods, and the other is that even if the goods are delivered, the quality cannot be guaranteed. Therefore, the development of the tire industry has always been criticized by consumers. However, with the intervention of digital services of platforms like CassTime and AI large models, the entire industry chain is accelerating its transformation to "digital intelligence", building a bridge for communication between brands and consumers, and while improving services, it will continue to gain more young car owners.