Comparison of current business structure and penetration rate

Industry reports show that the size of China's automotive modification market will be around 80 billion yuan in 2024, with a compound annual growth rate between 12-15%, and the performance of various sub sectors will vary. The industry structure is roughly distributed as follows:

◾ The proportion of exterior modifications (body surround, film, light group, wheel hub, etc.) is the highest, about 40% -50%;

◾ Performance modification (exhaust, suspension, power module) accounts for about 15% -25%;

◾ Interior/interior upgrades account for 10% -20%;

◾ The proportion of intelligent electronic/software module modification is gradually increasing, about 10% -15%. Compared with the modification penetration rate in the European, American, and Japanese markets, China is still in the import stage. Some European and American countries have a modification penetration rate of 10% -15%, while China is currently only in the range of 3% -5%. On the surface, this means that there is huge potential for the Chinese market in both directions of increasing penetration rate and expanding the scale of modification users. If the vehicle base is 350 million, even if the modification penetration rate increases from 4% to 8%, the market size may soar from tens of billions to billions.