Cost-performance narrative spreads in the aftermarket, Tuhu reaches the top

21st Century Business Herald Reporter Jiao Wenjuan

In China’s automotive aftermarket in 2025, two completely different narratives are emerging.

One is the accelerated clearance of the 4S dealership system. The China Automobile Circulation Association released the “Development Report of China’s Automotive Circulation Industry for 2025-2026,” which shows that by the end of 2025, the nationwide 4S dealership network size was 32,432 stores, a 1.4% shrinkage from the previous year. Nearly 5,000 4S stores closed or transferred ownership throughout the year, meaning that on average, more than 13 4S stores exited the market each day in 2025.

As the stores of 4S dealerships close one by one, car owners’ maintenance needs are shifting in another direction.

On the other end of the tide, Tuhu Car Care has reached an unprecedented position, with the total number of stores surpassing 8,008. According to data from Zhuoshi Consulting, it has become the world’s largest independent automotive service platform.

Recently, Tuhu Car Care disclosed its 2025 performance. Revenue reached 16.46B yuan, an 11.5% increase from 14.76B yuan in the same period last year. As of December 31, 2025, the company’s cash on hand was approximately 8.3 billion yuan.

User and store expansion support revenue growth. Tuhu stated in its financial report that the number of transaction users on its platform reached 28.4 million, a 17.7% year-over-year increase, with the user repurchase rate rising to 65%. Among them, new energy transaction users reached 4.27 million, a 60% increase.

More importantly, against the backdrop of generally declining in-store visits across the industry, the number of same-store users at Tuhu workshops increased by over 6% against the trend.

The sinking market has become Tuhu’s main battlefield for consolidating its core business. The financial report shows that the net addition of 1,134 workshop stores throughout the year, with about 39% located in third-tier and below cities. In 2025, the coverage rate of counties with more than 20k passenger cars increased to 75%. Stores in remote regions such as Tibet, Heilongjiang, Xinjiang, and Qinghai grew by over 40% year-over-year. Meanwhile, among franchise workshops open for more than six months, nearly 90% are profitable.

Tuhu mentioned in its financial report that consumer preferences are shifting toward higher cost-performance products, leading to increased sales in tires, chassis parts, and car maintenance sectors, though the average transaction value has decreased.

However, the decline in gross profit margin has not completely eroded profit margins. In 2025, Tuhu’s adjusted total operating expenses as a percentage of revenue was 21.8%, down 0.9 percentage points year-over-year. Cost control and operational efficiency improvements have somewhat offset the adverse impact on gross profit. As a result, adjusted net profit still grew by 12.2%, reaching 700 million yuan.

New businesses are becoming one of the few bright spots. Quick repair business revenue increased by over 50% year-over-year, covering more than 100 quick repair categories. Accident repair transactions in Shanghai increased by over 100% year-over-year. The number of new energy transaction users reached 4.27 million, a 60% increase, accounting for over 15% of total transaction users. These high-growth sectors are gradually changing Tuhu’s revenue structure, which has been overly dependent on traditional standardized categories like tires and engine oil.

Overseas markets have also made substantial progress. Tuhu’s workshops in Hong Kong increased to four stores, and franchise workshops in the Klang Valley region of Malaysia have officially opened. Currently, more than 10 overseas stores are operating or in preparation. CEO Chen Min explained at the earnings conference that the overseas strategy is to test waters in representative markets: Hong Kong as a high-premium market to verify brand influence and supply chain capabilities; Malaysia as a high-cost-performance market to test cost control.

But challenges are also evident. After the annual report, Credit Suisse lowered its target price from HKD 23 to HKD 16, maintaining a “Hold” rating, and pointed out that rising oil prices could bring additional cost pressures.

Meanwhile, industry competition continues. JD Auto Repair leverages logistics advantages, and Tmall Auto Repair relies on Alibaba’s ecosystem, both continuously squeezing market share. For Tuhu, as the number of stores surpasses 8,000, how to maintain service quality and brand trust amid expansion will be key to sustaining its leading position.

(Author: Jiao Wenjuan Editor: Wu Xiaoyu, Luo Yifan)