cens logo

China Harmony and Alibaba Tie Up in Automotive After-sales Service Biz in China

Nov 13, 2015 | By Quincy Liang

Hon Hai's chairman Terry Gou. (photo from UDN)Hon Hai's chairman Terry Gou. (photo from UDN)
China Harmony Auto Holding Co., a major luxury-car dealer in China, recently announced a partnership with the Alibaba Group of China, an e-commerce giant that listed on the NYSE this year, to jointly develop automotive-related businesses. The two parties plan to open 300 service centers in 15 provinces in China over the next two years to provide automotive after-sales services, according to foreign newswire.

The news also indicates that Hon Hai Group of Taiwan, recognized as the largest private manufacturer on the island and one of the world's largest EMS (electronics manufacturing services) providers, stands to benefit further in its electric vehicle (EV)-related business development in China. 

In late 2014, Hon Hai/Foxconn invested in China Harmony to becone the second-largest shareholder in the auto dealer. Not very long afterwards, industry sources said that an EV production venture was set up by Hon Hai, Chinese Internet giant, Tencent Holdings, and China Harmony.

Recent news reports say that a new EV factory of the venture is expected to be completely constructed by 2016 or 2017, and will start mass production by 2018. The venture reportedly will try to become "Apple of the EV industry" to focus on developing and producing upscale EVs based on the "boutique concept". Its future business model will see Hon Hai supply electronics-related parts and systems for EVs, with Tencent to leverage its established strength in Internet platform, and China Harmony as the distributor by utilizing its expertise in automobile vending.

The EV venture will be headquartered in Zhengzhou, Henan Province of China. With participation by parties each with expertise and know-how in specialized fields, the venture is expected to design and produce smart EVs with uniqueness. The venture is initially capitalized at 1 billion renminbi (RMB, or Chinese yuan), with stakes held by China Harmony, Hon Hai and Tencent at 40 percent, 30 percent and 30 percent, respectively.

Industry sources say that the China Harmony-Alibaba tie-up in automotive  after-sales service enables Hon Hai to  basically complete its initial EV-business deployment, from EV manufacturing, leasing, software, to after-sales services.

In addition, several Hon Hai affiliates will also join the project to supply parts, including Foxconn Technology Co., Ltd. (system integration and mechanical parts), Innolux Corp. (Taiwan's largest maker of thin film transistor-liquid crystal display (TFT-LCD) panels), ESON Precision Engineering Co. Ltd. (precision tooling development and already a supplier to American premium EV maker Tesla), etc.

According to foreign newswire, a senior manager of China Harmony pointed out that profit margins of automotive after-sales services are often as high as 40 percent to 45 percent, hence the decision by his company and Alibaba to jointly tap the lucrative business. He also added that with the establishment of an increasing number of after-sales service centers, automotive  repair and maintenance business is expected to account for about 80 percent of China Harmony's overall profits in 2016, and the company may consider the possibility to spin off the business in the future for initial public offering (IPO).

The manager noted that China Harmony and Alibaba are expected to create a new business model in the automotive after-sales service segment. China Harmony, in fact, has utilized Alibaba's e-commerce platform to sell brand new, used luxury   cars, EVs, and promote its after-sales service business. The two parties are also jointly developing automobile financing services.

Industry experts say that the rising EV market has been drawing more and more players to jump onto the lucrative bandwagon. There are now many foreseeable business opportunities, they add, including EV charging infrastructure construction, after-sales service chain development, etc.


Industry In-Focus

SINOSTEEL Corporation: Rising price in Steel</h2>

SINOSTEEL Corporation: Rising price in Steel

Jun 05, 2020

Brazil’s new crown pneumonia epidemic has rapidly increased. Brazil’s Vale, the world’s largest iron ore producer, is facing an out-of-control impact. The market is worried that iron ore production and sales will be affected. new highs. Experts from Sinosteel (2002) evaluated that steel prices will rise steadily under the effect of rising costs, with a promising outlook. According to a legal p...


Apple Invests Millions in LED Plant in Taiwan</h2>

Apple Invests Millions in LED Plant in Taiwan

Jun 01, 2020

Apple is considering to invest over US$330 million in a factory in northern Taiwan to manufacture both LED and micro-LED displays for its iPhones, iPads, MacBooks, and other new devices. Apple is teaming up on the new factory with Epistar, Taiwan's top LED producer, and Taiwanese LCD panel maker, AU Optronics. The plant will be located in the Longtan branch of the Hsinchu Science Park and Appl...


Taiwan Machinery Was Applauded in COVID-19</h2>

Taiwan Machinery Was Applauded in COVID-19

May 18, 2020

What the epidemic showed was the amazing flexibility of Taiwan's machine tool industry. Taiwan, which has allowed the semiconductor industry to specialize in the past, has finally realized that these machine tool industries with amazing strength are the "invisible champions" of Taiwan's economy. In early February, three companies -- Habor Precision, Tongtai Machine & Tool and Taiwan Takisawa -...



Industry Reports

K, the leading global plastic and rubber trade fair (Photo courtesy of Messe Düsseldorf/ctillmann)

K, The World's Leading Trade Fair for Plastic and Rubber Industry

Jul 24, 2020

2019 K Show, the leading global trade fair for the plastics and rubber industry, had been held in Düsseldorf on 16-23 October, 2019. There were 3,330 exhibitors from 63 nations proved impressively: plastics continue to be an innovative, indispensable material. But they also unanimously underscored the necessity of having operational circular economies along the complete material chain and to this...


Photo courtesy of CENS

Digital Healthcare & Technology at the Heart of Las Vegas CES 2020

Jul 14, 2020

■ Hubert Chih The number of healthcare exhibitors at the 2020 CES in Las Vegas increased significantly by 23% from 2019. According to the analysis and report by the CES organizer, digital healthcare and technology were the focus in the healthcare exhibition. In addition to the continued expansion of healthcare coverage, the reduction of healthcare costs, the improvement of effectiveness and th...


The Taiwan Hardware Show sees global buyer attendance. (Photo provided by Kaigo Co.)

Taiwan's Hand Tools Seeking Opportunities Amid Global Crisis

Jul 10, 2020

Due to the COVID-19 pandemic sweeping the globe, most of the international hardware shows slated for this year has been moved to 2021. However, as Taiwan’s efforts combating the new virus has proven to be successful, the 2020 Taiwan Hardware Show (THS) will continue as scheduled, beginning on Oct. 13 and ending on the 15th at the Taichung International Exhibition Center, thus becoming the only sh...



Supplier News

With professional technics and rigorous quality control, Kung Hsing gains high-reputation in the industry</h2>

With professional technics and rigorous quality control, Kung Hsing gains high-reputation in the industry

Jul 23, 2020

Kung Hsing Plastic Machinery Co., LTD., founded in 1972, is the brainchild of the company President Tsai Chin-lien’s over 48 years of experience in designing and producing extrusion machines. The firm stood by its belief to uphold integrity and offer the best quality and services, eventually becoming a leader in the extrusion machinery industry in Taiwan. Kung Hsing currently has two factories; t...

KUNG HSING PLASTIC MACHINERY CO., LTD.


INTYPE ENTERPRISE CO., LTD. TUNG TAI MACHINE WORKS CO., LTD. </h2>

INTYPE ENTERPRISE CO., LTD. TUNG TAI MACHINE WORKS CO., LTD.

Jul 21, 2020

■ Tseng Lung-nan Intype Enterprise has built up 55 years of experience in producing extruders, though the firm is placing greater consideration on rapidly degrading of the global environment. In the past 20 years, Intype has become an active contributor to building up a global ecosystem, enabling them to reuse the products manufactured by their own extruders and avoid further waste. The firm t...

INTYPE ENTERPRISE CO., LTD.


YFCM Carbon Fiber Driveshaft Lauded in the field of Modified Cars for its Flexibility </h2>

YFCM Carbon Fiber Driveshaft Lauded in the field of Modified Cars for its Flexibility

Jul 14, 2020

■Hsiao Yung-le Yifeng Technology Co., Ltd. specializes in the research and development of carbon fiber transmission shafts and the manufacture of carbon fiber related products.The carbon fiber material has the characteristics of lightweight, impact resistance, fatigue resistance, and corrosion, and chemical stability is quite high. The product type is increasing in the extensive range with an ...

YI FENG COMPOSITE MATERIAL TECHNOLOGY CO., LTD.



Insiders' Views

Caption: Pictured from front row, third right, Changhua County Government Economic Affairs Department Director Liu Yu-ping, County Magistrate Wang Huei-mei, Secretary Chen Bo-tsun pose in front of the exhibition booth. (Photo provided by CHCIA)

Changhua County Government Shores up Biz-Matching to Global Buyers

Nov 18, 2019

■Yang Feng-Chun In a bid to assist manufacturers in Changhua County to expand their market reach overseas against severe competition in the globalized market, Changhua County Government has been an active player in pushing for a makeover and innovation of its local small and medium-sized enterprises. This is done in hopes of establishing stronger connection with international markets. An ex...


Paul Master offers high-quality chassis and engines parts for passenger cars, trucks, and industrial trucks. (Photo courtesy of Paul Master)

Paul Master Builds Reputation with Auto Chassis and Engine Parts

Nov 18, 2019

Founded in 1980, Paul Master Auto Parts Co. is headquartered in Taiwan, a professional manufacturer of chassis and engines parts for passenger cars, trucks, and industrial trucks including forklifts. General Manager Terry Liang said the company has its own professional design department, which provides customized products and specifications for global buyers, including automobile steering and...

PAUL MASTER AUTO PARTS CO.


Nan Hoang Traffic Instrument Co., Ltd.</h2><p class='subtitle'>Taiwan First brakes Technology Co., Ltd. </p>

Nan Hoang Traffic Instrument Co., Ltd.

Taiwan First brakes Technology Co., Ltd.

Sep 04, 2019

Nan Hoang Traffic Instrument Co., Ltd is one of the major manufacturers of automobile friction materials in Taiwan and globally. Chairman Austin Cheng has implemented the double-arrow strategy this year - own brand of “YangPo” is adopted to focus on global channels while the “NHC brand focuses on improving market shares in global markets, such as Europe, America, Asia, Australia, and the Middle E...



Exhibition Highlights

Koelnmesse (Beijing) Co., Ltd.

Announcement on Postponement of China International Hardware Show 2020 (CIHS 2020)

Jul 10, 2020

In view of the continuous spreading of COVID-19 all over the world and the latest epidemic prevention requirements of China and the government of Shanghai, in order to guarantee the health and safety of exhibitors, purchasers and professional visitors, China National Hardware Association and Koelnmesse have prudently decided to postpone China International Hardware Show 2020 (CIHS 2020) from Augu...


Automechanika Shanghai 2020 creates channels for cross-sector collaboration</h2>

Automechanika Shanghai 2020 creates channels for cross-sector collaboration

Jun 16, 2020

This year, Automechanika Shanghai continues to serve the entire automotive value chain by offering opportunities for information exchange, marketing, trade and education. Both vertically and horizontally, from OE, vehicle production to the aftermarket, it incorporates all elements of manufacturing, supply networks, services, new business models and information technology. Companies across the...


Messe Frankfurt (Shanghai) Co Ltd

CAPAS defers to 2021

Apr 20, 2020

Following the Chinese Government’s initiatives to prevent and control the COVID-19 outbreak, the organisers of the Chengdu International Trade Fair for Automotive Parts and Aftermarket Services (CAPAS) have announced the defer of the show’s 2020 edition. The fair, originally scheduled from 21 to 23 May 2020, will now be held from 20 to 22 May 2021. In China, the State Council issued an announc...