Autohome Announces Additional US$168 Million Investment in TTP Car Inc. to Build the Largest Used Car Platform in China

BEIJING, Oct. 29, 2020 /PRNewswire/ -- Autohome recently announced that it has entered into a definitive agreement with TTP Car Inc. ("TTP"), a leading auction platform for used cars in China. Pursuant to the agreement, Autohome will make an investment in TTP through subscription of preferred shares in the capital of TTP for an aggregate purchase price of US$168 million.

As soon as the news came out, industry experts generally believe that the strong alliance between Autohome and TTP will help China drastically optimize the industry structure and circulation path of used cars and usher in a "blowout" period for the used car market.

Vigorously developing used car business to build the largest used car trading platform in China

Carrying forward the philosophy of "connecting users, empowering vendors and forging win-win cooperation" and leveraging its tremendous brand influence and huge traffic, Autohome provides users with a platform which displays a large number of real and effective car sources. By integrating many offline businesses such as price evaluation, vehicle accident inquiry, vehicle condition guarantee, installment payment and insurance which users need most, Autohome provides full-process used car transaction facilitation services, winning great popularity among massive user base.

After decades of years of development, Autohome has accumulated more than 40,000 active merchants, millions of auction transaction data and millions of user data, with its business covering three scenarios: new car replacement, used car auction and retail business. Today, used car business has become a dark horse among Autohome's new businesses and an important driving force for the company's financial growth.

On the other hand, since Ping An's joining in 2016, Autohome has become the largest online traffic entrance for Ping An's automobile ecosystem. Autohome's future development strategy for used car business is to connect all the car source data of the whole industry through an SaaS system, establish risk control models with data through TTP's online and offline auction scenario, provide one-stop services for car dealers in respect of financing, car source and traffic, empower car dealers to carry out local and remote transactions, and integrate third-party service providers including offline test, ownership transfer, logistics, capital guarantee, finance, by doing so to build up the largest used car transaction platform and service network in China.

Controlling the vehicle supply chain, Autohome's dual cloud strategy empowers car dealers to transform

The used car industry is characterized by varied vehicle conditions and highly fragmented upstream and downstream. The industry can be best summed up in a sentence: whoever controls the supply source wins everything. Unlike European and American markets, 70% of used car sources in China are in the hands of individual consumers. TTP has the biggest share of the upstream market on the used car C2B industrial chain, providing one-stop service for millions of consumers to sell cars at high prices every year. For its part, Autohome has an absolute traffic advantage in the downstream of the used car industrial chain, providing online and offline service for more than 20 million consumers each year. Through their strong alliance, Autohome and TTP will connect the upstream and downstream of the used car industrial chain, and firmly control the used car supply chain. 

On the vehicle circulation link, Autohome's used car business has established a car dealer cloud SaaS system, a financial cloud car dealer wallet and a lending marketplace system with "purchase, sale, inventory and storage" functions covering car dealers and 4S store groups. The idea is to improve car dealers' digital transformation capabilities. Autohome's dual cloud strategy has three advantages: asset-light, platform-based, and whole-industry chain coverage. Integrating TTP's supply strengths on the industrial chain, Autohome will empower car dealers and distribution groups, improve car dealers' lean operations capabilities and truly realize win-win outcomes.

Working together to build a C2B2C ecosystem for used car transaction

Auction is the most mainstream, widely adopted circulation mode with largest scale in the international used car market, producing a winners-take-all competition effect. Manheim, Copart and KAR in the United States, USS in Japan and Auto1 in Europe are the biggest used car platforms in local markets, grabbing more than 40% of their respective market share.

As the leading used car auction platform in China, TTP has bright business development prospects. On the one hand, the online auction mode promoted by TTP helps individual owners to sell their used cars at high prices and quickly, thus greatly improving transaction efficiency. On the other hand, it also accelerates the circulation of used cars nationwide and promotes industrial development. Autohome started its used car business from sales leads business, but will focus the growth of transaction and auto financing business in the future and TTP will be an important part of Autohome's strategic used car business deployment. 

Mr. Min Lu, Chairman of the Board of Directors and Chief Executive Officer of Autohome, stated, "Over the past two years, we have witnessed the robust development of China's used car market. As a leading used car auction platform in China, TTP is well positioned to add significant synergetic value to Autohome's used car business. By working closely with TTP, Autohome will deeply integrate itself into upstream supply of used cars, leverage the transaction business to further develop its auto finance operations, and build a comprehensive C2B2C ecosystem for used car transactions, aiming to become China's largest used car platform."

Mr. Jun Zou, Chief Financial Officer of Autohome, added, "Our previous investment in TTP in 2018 has proven highly successful. Autohome in combination with TTP has become the largest online used car platform in China by total number of leads generated in 2019, according to iResearch. Integrating Autohome's online capabilities with TTP's offline presence, we expect to deliver enhanced value proposition by providing the best solutions for our users and customers. We look forward to generating stronger synergies and boosting growth through our add-on investment in TTP."