Face-changing in the second half of 2025: Tuhu Car Maintenance "Double-sided" Sprint

(Source: Caizhong TMT)

On the trading day following the release of the financial report, Tuhu’s stock price fell 11.5%, closing at HKD 11.76, hitting a new low for the year.

Author / Sun Yutong

Editor / Zhao Han

On March 30th, regarded by the industry as the “Oscar” of tire industry spring new product launches, the event was led by Tuhu (09690.HK).

As a leading player in China’s automotive aftermarket, Tuhu partnered with seven well-known domestic and international tire brands including Michelin, German Continental, and Bridgestone, to debut 12 new products featuring cutting-edge technologies such as noise-canceling cotton, self-repair, and proprietary rubber formulas, covering diverse scenarios like household comfort, sports handling, and new energy adaptation. The event appears to aim at benchmarking competitors and building a moat through deep supply chain integration.

However, ten days before this high-profile launch, Tuhu’s 2025 financial report revealed a complex “dual” picture: while revenue and user scale surged, issues like product quality, after-sales service, and refund difficulties became more prominent, and profit indicators quietly flashed red.

Growth on the “Face”

From key operational data, Tuhu Car Maintenance remains a story of growth in 2025.

The annual report shows that in 2025, Tuhu achieved total revenue of 16.46B yuan, an 11.5% increase year-over-year. More notably, its scale expansion continued; as of December 31, 2025, the number of Tuhu workshops exceeded 8,000, reaching 8,008, a net increase of 1,134 stores over the year, surpassing the growth rate of 2024.

According to Zhuoshi Consulting’s statistics, Tuhu has become the world’s largest independent automotive service platform.

User accumulation is also impressive. By the end of 2025, registered users reached 162 million, up 16.9%; transaction users numbered 28.4 million, up 17.7%; and the annual repurchase rate increased to 65%. In an era where internet traffic is peaking, such user growth is no small feat.

Meanwhile, Tuhu’s sinking market strategy has shown significant results. The financial report indicates that Tuhu’s stores now cover 1,953 county-level administrative regions nationwide, with a coverage rate of 75% in counties with more than 20k passenger cars. In 2025, its franchise stores also expanded internationally for the first time, landing in Malaysia, and the number of stores in Hong Kong, China, is increasing. Additionally, new energy business has become a highlight, with transaction users growing 60% year-over-year to 4.27 million, aiming to seize opportunities from market structural changes.

Its core business remains solid, with tires, chassis parts, and car maintenance contributing over 78% of revenue. The spring tire new product launch is aimed at consolidating its advantage in this high-frequency, high-margin entry point business and demonstrating its influence over upstream brands.

Tuhu’s relevant business leaders emphasized at the launch that the company will continue deepening strategic cooperation with top tire brands domestically and abroad, expanding genuine product supply chains, and focusing on joint product development and technological innovation. As an industry IP held for 11 consecutive years, Tuhu Tire Festival also launched promotional activities simultaneously.

Behind this move is Tuhu’s urgent pursuit of supply chain dominance. By co-developing exclusive products and offering exclusive sales modes with brands, Tuhu aims to create a differentiated advantage in the high-frequency tire category, thereby driving synergistic growth in automotive maintenance and quick repair services.

Profit “Inside”

However, the increased supply chain layout could not hide the profitability pressures revealed in Tuhu’s 2025 financial report.

In 2025, Tuhu’s net profit for the year was 419 million yuan, down 13% from 482 million yuan in 2024. Meanwhile, profitability indicators declined across the board: gross profit margin fell from 25.4% to 24.1%, and net profit margin dropped from 3.3% to 2.5%.

Particularly noteworthy is the “turnaround” in performance in the second half of 2025. The financial report shows that operating profit in the second half was only 30.28 million yuan, a 74.6% plunge year-over-year; during this period, profit was 113 million yuan, down 42.9%. This even affected the full-year results: in 2025, operating profit was 252 million yuan, down 23.8%; annual net profit was 419 million yuan, down 13.0%.

Following the financial report release on March 20th, on the next trading day, March 23rd, Tuhu’s stock price dropped 11.5%, closing at HKD 11.76, hitting a new low for the year. On April 2nd, the Hong Kong stock market closed at HKD 13.03, down over 60% from the high of HKD 37.7 in October 2023, with a market cap of only HKD 10.8 billion.

The decline in profitability metrics stems from the concentrated release of multiple cost pressures. In 2025, Tuhu’s R&D investment increased by 19.4% to 764 million yuan; sales and distribution expenses rose to 20k yuan; general and administrative expenses also grew by 12.7% to 400 million yuan. Based on this, total sales costs for 2025 reached 12.5 billion yuan, up 13.5%; operating and support expenses increased to 680 million yuan, an 18.1% rise.

Revenue growth without profit increase, even profit decline, is rooted in Tuhu’s fierce “multi-line warfare.”

On one hand, Tuhu is competing for “out-of-warranty” customers with the still-rooted 4S dealership system, which is accelerating its exit. The China Automobile Circulation Association’s “Development Report of China’s Automotive Circulation Industry 2025-2026” shows that nearly 5,000 4S stores closed or transferred in 2025, averaging over 13 stores exiting daily. Among the largest domestic auto dealer groups, Zhongsheng Holdings (00881.HK) shifted from a profit of 3.21 billion yuan in 2024 to a loss of 2.02B yuan in 2025. The accelerated clearance of 4S stores has freed up a huge market space for independent aftermarket platforms like Tuhu.

On the other hand, Tuhu must face direct price wars and traffic encirclement from internet giants like JD.com (09618.HK) Car Maintenance and Tmall Car Maintenance; it also has to compete in regional markets with local chains and independent shops.

JD Car Maintenance was promoted to a group-level department in 2023 and publicly challenged Tuhu with “Zhenhu Price,” later renamed “Zhenge Price,” signaling a clear competitive stance. Tmall Car Maintenance, leveraging Alibaba’s (09988.HK) ecosystem, recently announced that its new stores break even on cash flow within four months, showing strong single-store performance.

Additionally, “EasyGo Maintenance,” backed by Sinopec’s (600028.SH) gas station network, has over 12k stores, ranking first in the industry. According to China Chain Store & Franchise Association’s late 2024 data, Tuhu ranks second among automotive maintenance chain stores, behind EasyGo.

In the context of intensified price wars in the automotive aftermarket, Tuhu has been forced to lower prices to attract consumers, leading to declines in average transaction prices for tires and maintenance, further squeezing profit margins. The financial report confirms this, with Tuhu explaining the gross margin decline as mainly due to customer preferences shifting toward higher-cost-performance products, resulting in increased transaction volume in tire, chassis parts, and maintenance segments, but with lower average transaction prices.

It’s also important to note that scale expansion is a major driver of rising costs. In 2025, Tuhu’s workshop count exceeded 8,000, with 8,008 stores, a net increase of 1,134, of which 7,833 are franchise stores, accounting for 97.8%; 98.5% of new stores are franchise stores.

Reputation Crisis

Rapid expansion, especially heavily relying on franchise models, while creating network effects, also introduces risks in service quality control. This contrasts sharply with Tuhu’s early image of “transparent pricing and standardized service” that disrupted traditional 4S dealership models.

In recent years, Tuhu’s consumer complaints 【Download Black Cat Complaint App】 have been highly visible. As of April 2nd, there are over 4,500 complaints on the Black Cat Complaint platform containing the keyword “Tuhu,” mostly related to compensation, repair disputes, and other issues.

Data from the domestic online consumer dispute mediation platform “DianSuBao” shows that Tuhu Car Maintenance ranks first in complaint volume among automotive e-commerce platforms, with a feedback rate of only 30% and relatively low user satisfaction scores. Its latest rating is “Cautious Ordering.” A report by NetEase’s industry research indicates that in 2025, complaints mainly focus on product quality, after-sales service, and refunds, with product quality issues accounting for as much as 37%.

These complaints are not unfounded.

Earlier, The Paper reported that Anhui car owner Zhang’s vehicle, after maintenance at a Tuhu workshop in September 2025, experienced severe engine wear due to oil deficiency five months later. Review of the maintenance video suggested the technician may not have added enough oil. After complaints, customer service asked the owner to pay for disassembly and provide photos, then remotely judged responsibility. In another case, a car owner experienced brake master cylinder damage and vehicle shaking after maintenance, making rights protection difficult.

These cases highlight that, as Tuhu’s store network rapidly expands, the company faces increasing challenges in technician training, service procedures, and quality control management at franchise stores.

Both success and concern stem from franchisees.

Franchisees’ inherent profit motives conflict with the brand’s pursuit of standardized service and long-term reputation. As the headquarters’ management radius approaches its limits with exponential store growth, oversight can become unfocused. Profit pressures may also lead some franchisees to cut corners in service procedures and parts usage, or even engage in over-promotion and substandard practices, while the headquarters, constrained by costs, finds it difficult to implement comprehensive, round-the-clock supervision.

Tuhu is aware of these issues. Its efforts to strengthen the supply chain—including launching new products with top brands and developing exclusive and own-brand lines—aim to improve downstream service quality through supply chain control, similar to JD.com’s approach of building quality trust via a strong self-operated supply chain.

However, the complexity of automotive after-sales service lies in the fact that final quality delivery heavily depends on offline technicians’ operations, which is precisely the “last mile” that supply chain management cannot fully control.

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