Reed Launches New China Joint Venture, Strengthens Lead in A
Reed Exhibitions China, part of Reed Exhibitions, the world’s leading organizer of trade events, recently announced the formation of a new joint venture (JV) in China: Reed Hongda Exhibitions. The new company will extend Reed’s lead in the Chinese exhibition market and allow Reed to add China’s largest auto aftermarket exhibition to its portfolio of 55 major events. By hosting the China International Automotive Aftermarket Expo & China Auto Accessories Trade Fair (CIAAF), based in Zhengzhou, in the short term Reed aims to enhance the event’s effectiveness by boosting its content and overall presentation. In the long term, Reed hopes to develop CIAAF into the landmark annual event in Asia’s auto aftermarket sector.
In recent years, China has seen its automotive industry rapidly expand and become the largest manufacturer and consumer of automobiles. Nonetheless, the soaring volume of automobile inventories and intensifying competition in the auto sector has shrunk profits. Paradoxically, the automotive aftermarket is growing. Statistics show that China's automotive aftermarket was valued at RMB430 billion (USD67.5 billion) in 2011 and is expected to exceed RMB550 billion (USD 86.4 billion) in 2012, as the auto aftermarket enters something of a golden age.
While the automotive aftermarket in developed cities like Beijing, Shanghai and Guangzhou is poised for steady development, second and third tier cities of Central and Western China have emerged as areas of future growth. Reed’s latest venture is strategically critical as it connects the western and eastern Chinese markets in anticipation of imminent industry transformation.
Preecha S. Chen, President of Reed Exhibitions Greater China, commented during the signing ceremony, “This new commitment in Zhengzhou is a statement of our intent to ensure the success of this new venture by dedicating Reed’s global resources to the efforts here. Reed’s international offices and extensive sales networks across Asia, Europe, the Middle East and the US will all be leveraged for success in this city. We will also apply our extensive Sales and Marketing excellence to shape the CIAAF into a world-leading event in terms of size and quality. We plan to effect a significant increase in the number of international exhibitors and buyers, while delivering a world class service.”
The CIAAF has been held on eight occasions. The ninth edition will take place at Zhengzhou International Convention and Exhibition Center this June 26. The exhibition will span 200,000 sqm and is expected to attract 2,400 local and international exhibitors, making itthe largest automotive aftermarket trade event in the country.
Xue Yunwei, Deputy Mayor of Zhengzhou, is confident in the newly sealed cooperation: "Both sides should focus equally on upgrading the professional and international standards of the automobile accessories exhibition and on cultivating excellent talents in the exhibition field. In this way, they can usher the Zhengzhou exhibition industry into a new stage of development by leveraging their world-class management expertise and international sales resources."
“In mature markets such as Europe and the US, only 20% of profits in the automotive industry come from the sales of new cars. Sixty percent is generated from the automotive aftermarket, and the remainder from value-added services such as insurance, finance and second-hand car trading", said Guo Ping, Secretary General of the China Auto Fitting Industry Federation, one of the CIAAF’s supporting organizations. Mr. Guo is convinced that there is a clear opportunity for automotive accessories, components, maintenance and repair services within China to generate significant returns.
Against the backdrop of economic restructuring through the 12thFive-Year Plan, central and western China are set for a period of explosive growth. During this development, the center of the automotive industry chain will gradually shift to cities like Zhengzhou. At this critical moment, this move by Xinda Industry and Reed Exhibitions marks a great leap forward by China's automotive aftermarket and the exhibition industry in middle and western China. The introduction of new global resources, managerial expertise, ideas and values will act as a catalyst for the transformation of the Chinese automotive industry and serve a market that is set for significant growth.