Automobile inspection and evaluation services are vehicle services that have gradually developed along with the rapid growth of automobile ownership. At present, automobiles have become one of the indispensable means of transportation for people's travel. With the use of vehicles, affected by factors such as the inherent service life of different vehicle components, drivers' driving habits, and the external environment, vehicle parts are constantly worn, leading to unavoidable vehicle failures, which in turn affect the normal driving and safety of the vehicles. Through automobile inspection, we can comprehensively and accurately understand the performance and operating status of automobiles. Major listed companies in the automobile inspection industry: Anche Testing (300572), Center Testing International (300012), Xiayang Testing (831228), and China Automotive Engineering Research Institute (601965). ### 1. China's automobile inspection industry is in the initial stage of intelligence and networking The motor vehicle inspection industry has four development stages: manual stage, automation stage, intelligent and networking stage, and Internet of Things (IoT) and big data stage. Due to the late start of technological development in China, the industry is still in the third stage. Developed countries are in the third stage and gradually evolving into the fourth stage (IoT and big data). The overall level of China's motor vehicle inspection technology is in the initial period of the third stage of industry development (intelligent and networking stage). At present, the gaps between China and developed countries are mainly reflected in the following aspects: the control accuracy of detection systems, the accuracy of data collection and analysis, the efficiency of management systems and measurement systems, the degree of automation and intelligence in the detection process, and the production technology level of equipment, all of which need to be improved; the coverage of networked supervision systems is relatively narrow, and networked supervision and management models are only implemented in some provincial administrative regions and developed cities. Faced with these gaps, China needs to continuously develop IoT and big data technologies and organically integrate them with automobile inspection systems. In addition, the level of detection technology and the ability of inspectors need to be strengthened, and detection standards and policies need to be further optimized. ### 2. The number of automobiles in ownership increases year by year, and automobile inspection stations are overloaded In recent years, benefiting from factors such as rapid economic development, improvement of residents' disposable income, and promotion of national policies, the number of automobiles in ownership in China showed an increasing trend year by year from 2011 to 2020. By the end of 2020, the national automobile ownership reached 281 million, reflecting that the market space for automobile inspection in China is gradually expanding. The increase in automobile ownership in China has added more workload to automobile inspection stations, which originally had a small base. In 2011, there were more than 6,224 inspection stations in China, including about 3,024 safety inspection institutions, more than 1,200 environmental inspection institutions, and more than 2,000 comprehensive inspection institutions. From 2019 to 2020, there were about 13,000 inspection stations in China, a threefold increase compared with 2011, and the automobile ownership was 260 million, with 0.50 inspection stations per 10,000 vehicles. At present, the number of inspection stations per 10,000 vehicles in Japan, the United States, and Europe is 3.51, 2.5, and 2 respectively. The growth in the number of inspection stations is not significant, and institutions that originally only conducted one type of inspection have gradually expanded into inspection stations that conduct multiple types of inspections in parallel. Moreover, the number of inspection stations per 10,000 vehicles in China is far lower than that in foreign countries, resulting in high workload. ### 3. Policies are expected to drive the industry's market scale to exceed 90 billion yuan Automobile inspection in China is mainly divided into mandatory inspection for in-use vehicles and non-mandatory inspection. Due to the strictness of laws and the fact that the public's attention to automobile inspection is still on the rise, the market scale of mandatory vehicle inspection is larger than that of non-mandatory vehicle inspection; however, with the expansion of China's used car market and the improvement of consumers' awareness of automobile safety, the growth rate of the market scale of non-mandatory vehicle inspection in China will increase. The new car offline market will also expand with the annual increase in the number of new cars put on the market. The calculation of the automobile inspection market scale mainly consists of three categories: the market scale of mandatory vehicle inspection, the market scale of non-mandatory vehicle inspection, and the market scale of new car inspection. Among them, the calculation logic of the market scale of mandatory vehicle inspection is based on the number of inspections specified by the state for different vehicles, the ownership of different models, and the average inspection price; the used car accounts for the largest proportion in the market scale of non-mandatory vehicle inspection, so it is calculated based on the ownership of used cars and the inspection fees for different models of used cars; finally, the market scale of new car inspection is calculated based on the output of new cars and the average price of new car inspection. The sum of these three parts gives the overall market scale of the automobile inspection industry. From 2017 to 2020, the market scale of China's automobile inspection industry increased year by year, from 37.599 billion yuan in 2017 to 54.042 billion yuan in 2020, with a compound annual growth rate of 12.85%. The transition from National V to National VI emission standards has led to a significant increase in inspection costs. This is because "National VI a" was implemented on July 1, 2020, and "National VI b", which is stricter than "National VI a", will be implemented on July 1, 2023. Compared with the "National V" emission standards, "National VI" is significantly stricter, so the calibration and testing costs of "National VI" have also increased significantly. Overall, from National V to National VI, the inspection fees for passenger cars have increased by about 50%, and those for commercial vehicles by 30%. From the perspective of the growth of automobile ownership in China, the automobile inspection market has great potential. The stricter environmental protection policies and the public's increasing awareness of road traffic safety provide huge opportunities for China's mandatory automobile inspection industry. The development of the used car market has greatly tapped the development potential of China's non-mandatory vehicle inspection market. In addition, the development of the Internet of Vehicles has strongly promoted the automobile inspection industry, bringing more opportunities to the industry. The trend of new car launches is also favorable, with the number of new car launches increasing year by year. It is expected that the market scale of China's automobile inspection industry will continue to expand, reaching 90 billion yuan by 2026. The above data refers to the *Prospectus on the Development Prospect and Investment Opportunity Analysis of China's Automobile Inspection Industry* by Qianzhan Industry Research Institute. Meanwhile, Qianzhan Industry Research Institute also provides solutions such as industrial big data, industrial research, industrial chain consulting, industrial mapping, industrial planning, park planning, industrial investment promotion, IPO fundraising feasibility study, and prospectus writing. ### 4. Introduction to major listed companies #### Anche Testing Anche Testing is one of the few enterprises in the industry that researches, develops, produces, and sells safety inspection systems. The safety inspection systems mainly test the driving safety items of motor vehicles and are applied in fields such as motor vehicle inspection institutions, automobile manufacturers, maintenance enterprises, and used car evaluation institutions. In the future, the company will continue to improve the technological advancement of detection systems from multiple aspects, improve the marketing and service network, strengthen the research and development of new products and technologies, expand the application fields of safety inspection systems, and maintain its leading position in the domestic industry. In response to the corresponding development plans for new energy vehicles, the company has been closely following the relevant dynamics of new energy vehicles, joined multiple industry alliances and related standard associations for new energy vehicle safety testing, and actively participated in the formulation of national testing standards for new energy vehicles. In addition, the company will continue to accelerate the research, development, design, and technical upgrading of products, and continuously improve its technology and product capabilities in the safety testing of intelligent vehicles, new energy vehicles, and driverless vehicles. #### Center Testing International (CTI) Since 2015, CTI has been approved as a designated laboratory for Compulsory Product Certification (CCC), covering five business areas: audio-visual equipment, information technology equipment, lighting electrical equipment, telecommunications terminal equipment, and toy products. Since 2020, CTI has been approved as a national designated institution for Compulsory Product Certification (CCC). In 2021, CTI once again obtained the qualifications of a designated certification body for CCC certification of stroller products and riding vehicle toys and a designated laboratory for CCC certification of stroller products from the Certification and Accreditation Administration of the People's Republic of China, which can help more foreign brands enter the Chinese market. #### Xiayang Testing Hefei Xiayang Motor Vehicle Testing Co., Ltd. is the first socialized motor vehicle testing station in Anhui Province. The company has built a 30-mu facility in Luyang Industrial Park in the suburbs, installed the most advanced automatic flat-panel testing lines for motor vehicles in China, with a designed daily testing capacity of more than 500 vehicles. The parking lot can accommodate 300 motor vehicles, changing the bad phenomena in motor vehicle testing such as vehicle congestion, noise disturbance to residents, environmental pollution, and "scalpers" surrounding car owners. #### China Automotive Engineering Research Institute (CAERI) China Automotive Engineering Research Institute Co., Ltd. (stock abbreviation: China Automotive Engineering Research Institute, stock code: 601965) was founded in March 1965, formerly known as Chongqing Heavy Duty Vehicle Research Institute, which is a national first-class scientific research institute. In 2001, it was renamed Chongqing Automobile Research Institute and transformed into a technology-based enterprise. In 2003, it was placed under the management of the State-owned Assets Supervision and Administration Commission of the State Council. In 2006, it was jointly reorganized with China General Technology (Group) Holding Co., Ltd. and became its wholly-owned subsidiary. In 2007, it was renamed China Automotive Engineering Research Institute and reorganized into a limited liability company as a whole. In November 2010, it was restructured into China Automotive Engineering Research Institute Co., Ltd. On June 11, 2012, China Automotive Engineering Research Institute was officially listed on the Shanghai Stock Exchange. China Automotive Engineering Research Institute insists on investing in basic research and has formed a cluster system integrating testing center, engineering center, intelligent center, new energy center, data center, incubation center, and equipment industry. It has become a public technological innovation platform for automobile product development, experimental research, and quality inspection in China, promoting the technological progress of the automobile industry. Source: Zhongshang Intelligence Network, Qianzhan Industry Research Institute