I. Industry Risk Analysis

(1) Policy Risk

During the policy formulation period, the industry faces risks of regulatory vacuum and vague standards. Regional policy differences make it difficult to judge the legality of modification projects. During the implementation period, law – enforcement standards vary across regions. Personalized modifications are likely to be classified as “illegal modifications” and face risks such as surprise inspections or business suspensions. During the evaluation and adjustment period, environmental protection and safety standards are rapidly upgraded. For example, in 2023, many places tightened the limits on exhaust noise decibels, forcing the elimination of some existing modification plans. When policy abolition and update are not synchronized, originally permitted projects may suddenly be prohibited, and enterprises’ previous technological investments face the risk of being sunk. They need to continuously track the dynamics of 15 current standards such as GB/T 37422 – 2019.

(2) Economic Risk

Currently, the automotive beauty and modification industry faces the risk of shrinking demand during the economic downturn. The slowdown in consumers’ disposable income growth has led to a lower priority for non – essential service expenditures. Coupled with the continuous high prices of upstream raw materials in the industry due to inflationary pressure, enterprises’ profit margins are compressed. On the policy side, stricter environmental protection regulations have forced some traditional modification projects to withdraw from the market, and the structural technological substitution risk brought by the popularization of new energy vehicles has forced enterprises to increase their secondary R & D investment. The over – supply formed during the previous economic expansion period in the industry is mismatched with the current weak demand. The decline in gross profit margin and the lengthening of payment terms caused by price wars have put pressure on cash flow, highlighting the problem of the insufficient anti – cycle ability of small and medium – sized start – up entities.

(3) Social Risk

The automotive beauty and modification industry faces the risk of generational demand fragmentation: Generation Z pursues personalized and technological modifications. However, the tightening of environmental protection policies and the negative labeling of vehicle modifications in public opinion have led to policy restrictions and moral disputes for some projects. Millennials are more rational in consumption and have a trust crisis in the “pseudo – demand” modification services of excessive marketing. The baby – boom generation’s preference for vehicle functional maintenance is difficult to support high – value – added businesses. At the same time, with the acceleration of the popularization of new energy vehicles, the young group’s demand for “electronic modifications” of vehicles does not match the traditional mechanical modification technology system, resulting in risks of technological断层 and customer loss.

(4) Legal Risk

Entrepreneurs need to focus on the compliance risk of automobile modification: Modifying key components such as engines and chassis may violate the “Road Traffic Safety Law” and the national standard GB7258 and are likely to be investigated by the traffic department. There is a risk of infringement of counterfeit and shoddy products in the parts procurement process. Using unregistered imported parts or infringing intellectual property rights will face administrative penalties. In the field of environmental protection, the “Atmospheric Pollution Prevention and Control Law” must be complied with. Improper use of cleaning agents and waste disposal may trigger environmental protection penalties. Personalized modifications are likely to cause contract disputes. If the modification scope and warranty terms are not clearly agreed, civil compensation liability may be assumed. Advertisements need to avoid sensitive words such as “illegal modification”. Excessive promises of performance improvement are likely to constitute false propaganda.

II. Entrepreneurship Guide

(1) Suggestions on Entrepreneurship Opportunities

Focus on the personalized needs of new energy vehicle users, develop exclusive modification plans for electric vehicles (such as battery appearance beautification and intelligent atmosphere light sets), and provide convenient film – pasting/vehicle – coating quick – repair services in combination with the community store model; Tap into policy dividends and layout the supply chain of low – VOC environmental protection beauty products. Launch a membership system for modification plan subscriptions for Generation Z, and use metaverse technology to build a virtual modification platform to achieve online trial – fitting conversion; Pay attention to the niche scenarios derived from the camping economy, such as the customized installation of roof luggage boxes and anti – scratch coatings for off – road vehicles, and carry out precise customer acquisition through pop – up stores in new energy vehicle showrooms/charging stations.

(2) Suggestions on Entrepreneurship Resources

Entrepreneurs in the automotive beauty and modification industry should give priority to integrating light – asset cooperation resources. By joining established brands, they can obtain equipment, technical training, and supply – chain support, reducing initial investment. Cooperate with community parking lots, new energy vehicle showrooms and other physical spaces to share customers and take advantage of local scenarios to acquire customers. Technical resources can be obtained through profit – sharing cooperation with 3D printing customizers and environmental protection coating suppliers to reduce the risk of heavy – asset inventory. Online operations can rely on Douyin’s local life and vehicle manufacturers’ after – sales platforms for customer attraction, and outsource traffic conversion to professional MCN teams. Pay attention to the demand in the sinking market, focus on niche areas of electric vehicle modification (such as battery maintenance and fast – charging upgrade), and cooperate with regional repair shops in a profit – sharing model to avoid high – cost venues and personnel. For industry compliance resources, it is necessary to focus on environmental protection qualifications (such as leasing wastewater treatment equipment) and cooperate with modification registration agencies.

(3) Suggestions on Entrepreneurship Teams

The entrepreneurship teams in the automotive beauty and modification service industry need to focus on complementary capabilities in technology, service, and market. Core members should include senior automotive technicians (to solve equipment operation and process standardization), modification plan designers (to meet personalized needs), and customer experience operators (to establish a membership system and word – of – mouth fission). Founders need to strengthen the retention of technical backbones through equity bundling or project dividends; The team needs to regularly participate in industry certification training (such as 3M crystal coating certification and ECU tuning qualification) and establish a customer case library to standardize experience; Adopt a flat team – based management system (such as film – pasting teams and performance modification teams), equip with a digital order – receiving system to dynamically allocate manpower, and control service quality through an elimination mechanism of “mentoring new employees + customer ratings”.

(4) Suggestions on Entrepreneurship Risks

Entrepreneurs should identify the needs of niche customer groups through precise market research, and give priority to the service tracks exclusive to electric/new energy vehicles to cope with the shrinking risk of the fuel vehicle market; Strictly handle modification qualification registration in accordance with the “Regulations on the Administration of Motor Vehicle Maintenance” and purchase commercial liability insurance to cover construction accident compensation; Establish a dynamic grading management system for suppliers to ensure the traceability of modification parts and sign quality deposit clauses; Use the ERP system to monitor inventory turnover in real – time to avoid the backlog of vulnerable parts; Develop an online detection reservation + membership prepaid system to improve customer stickiness, and set up a 24 – hour response mechanism for customer complaints to prevent brand crises; Focus on monitoring the trends of environmental protection inspections and upgrade wastewater recovery devices in advance to meet new environmental protection regulations.