ETC is making a major push into urban parking lots—could this upend the smart‑parking landscape?

According to the Ministry of Transport, as of August 4, the total number of ETC users nationwide has exceeded 100 million.

Thanks to favorable policies, ETC has rightfully become the star of the transportation sector this year. To promote ETC, car owners can now not only have it installed free of charge but also enjoy a highway toll discount of at least 5% after installation. Although ETC’s widespread adoption began on highways, its ambitions extend far beyond that. Moving forward, ETC aims to expand into urban areas, capturing the smart‑parking market and even the automotive after‑sales services sector.

But can it succeed?

Hidden Reef

It’s no exaggeration to describe ETC as “crazy.”

On the one hand, there is the “frenzy” of ETC companies. ETC providers are eager to capitalize on the benefits of this policy, reversing the previous downturn in their ETC business. According to the Ministry of Transport on July 29, the nationwide ETC user base has reached 97.8043 million, accounting for 51.25% of the total issuance target. Based on the remaining issuance target, over the 155 days remaining in 2019, an average of 600,300 units must be issued each day. Thanks to a sharp surge in sales orders, ETC industry leader Jin Yi Technology expects to turn profitable in the first half of this year. Another leading ETC company, Wanji Technology, saw its ETC business revenue grow by 138.76% year over year in the first half of the year, making it the company’s largest revenue driver.

On the other hand, there is the “frenzy” of the banks and telecom operators tasked with issuing [the product]. To fill the gap left by the upcoming daily issuance of 600,300 ETC cards and to capture ETC‑related customers, banks have rolled out a series of marketing campaigns, each offering distinct incentives. There have even been some absurd incidents, such as a bank enlisting temple monks to “bless” ETC devices. Moreover, some promoters even wear reflective vests emblazoned with the word “Inspection,” stopping vehicles at highway toll booths to tout ETC… Such practices have only further fueled the perception of ETC as being overly aggressive.

However, behind the “craziness” lies ETC’s deep concern about its future.

ETC once “ran aground.” In 2015, in accordance with the Ministry of Transport’s requirements, ETC systems on expressways were slated to achieve nationwide network connectivity by year’s end, sparking a surge in ETC sales. However, after the renovation was completed, the manufacturer’s performance plummeted as the market descended into a fierce price war, trapping it in a cycle of low‑price competition.

The primary reasons for ETC’s “stumbling block” are, first, an overreliance on policy support, and second, a lack of a sustainable self-sustaining business model. According to estimates by Anxin Securities, the ETC market is expected to reach RMB 9.05 billion this year and next. While the market appears sizable, equipment sales are essentially one-off transactions; even factoring in subsequent replacement and maintenance services, the overall market potential remains extremely limited.

Moreover, most vehicle owners only use ETC when paying tolls on highways, resulting in low usage frequency and limited scope for additional services.

ETC urgently needs to expand its application scenarios and extend its industrial chain downstream as much as possible. Accordingly, ETC shifted its focus to urban areas, marking the beginning of a new chapter in its journey to bring ETC into cities.

A tremendous temptation

Urban parking is a lucrative target for ETC.

According to the “Market Outlook and Investment Strategy Planning Analysis Report on the Smart Parking Industry” released by the Qianzhan Industry Research Institute, China’s smart parking systems market was valued at approximately RMB 8 billion in 2017, and is expected to approach RMB 20 billion by 2020.

ETC companies appear highly confident about capturing the smart parking market. Wu Pan, Director of the Marketing Department at JinYi Technology, mentioned during his presentation at the GIIS 2019 China Smart City Summit, hosted by EIO, that… From both a technological and application standpoint, the transition from ETC‑enabled highway tolling to roadside parking and eventually to on‑street parking is a highly promising evolution. Coupled with government‑mandated initiatives, he is confident that, in the future, ETC will account for roughly 90% of all parking transactions.

Policy support is one of the key sources of confidence for ETC enterprises. In June this year, the National Development and Reform Commission and the Ministry of Transport issued the “Implementation Plan for Accelerating the Promotion of ETC-Based Non‑Stop Toll Collection Services on Expressways,” stipulating that by the end of December 2020, ETC services should achieve near‑universal coverage at major transportation hubs, including airports, railway stations, passenger terminals, and port terminals.

In addition to parking, the automotive aftermarket is another sector that ETC providers are eager to tap into. According to Jingkui Investment’s “2018 China Automotive Aftermarket Research Report,” the size of China’s automotive aftermarket exceeded RMB 1.3 trillion in 2018.

The automotive aftermarket is more enticing than smart parking. From parking to the vehicle, this approach was not pioneered by ETC; smart‑parking companies have already experimented with it, but adoption has remained lukewarm. ETC’s confidence in entering the automotive aftermarket stems from its unique status. ETC has recorded vehicle and owner information, effectively giving each vehicle a digital ID. ETC providers believe that by leveraging more precise user data, they can deliver highly targeted services and develop a more comprehensive automotive after-sales marketplace. Therefore, although they are treading the well-worn path that smart parking companies have taken to enter the automotive aftermarket, they remain confident that their approach will yield distinct results.

But whether it’s in the parking lot or behind the car, established players have already made their moves—can ETC really deliver on its promises?

Different Voices

ETC is ambitiously positioned, but in new domains, it may not yet be qualified to “rank its peers.”

“Except for the specific locations mandated by the Ministry of Transport, I don’t see any need for the developer to convert the parking lot into an ETC‑enabled facility.” Sun Longxi, CEO of Kotuo Co., Ltd., a smart parking company backed by Tencent’s strategic investment, told EIO.

ETC’s entry into the parking‑related market faces its biggest hurdle: cost. To convert a parking lot into an ETC‑enabled facility, the first step is to install RSUs in the parking area. (Roadside Unit) 。 Meanwhile, compared to the OBU, which costs only about 80 yuan at cost price, (Vehicle Unit) , an RSU (Roadside Unit) Its price is nearly a hundred times that of an OBU, costing over ten thousand yuan.

Typically, parking‑facility owners—ranging from residential‑community property management companies and government agencies to shopping centers and even private individuals—are reluctant to abandon their existing license‑plate‑recognition systems, which already meet their needs, and invest in costly upgrades.

“The video‑recognition solution is already very effective; if it weren’t, making adjustments would be necessary. But if it’s even better than ETC, there’s no need to change it.” “Sun Longxi added further.”

Aiparking is a developer of smart urban parking management systems, specializing in high‑position video‑based license‑plate recognition technology. Liu Wuzhen, CEO of Aiparking, believes this issue should be examined from two perspectives.

“We believe that ETC may have a positive impact on off‑street enclosed parking lots, but it is unlikely to significantly affect on‑street parking, let alone fundamentally alter the existing landscape.” ETC merely identifies vehicle information at the time of registration and cannot provide real-time data on the current license plate number or vehicle type, resulting in incomplete data and inherent limitations in evidence collection. Liu Wuzhan said in an interview with EIO.

However, he also stated that he would closely monitor the rollout of ETC and did not rule out the possibility of integrating ETC as a key payment method into the existing video‑image product ecosystem in the future.

As for ETC’s attempt to enter the automotive aftermarket, the skepticism is even greater. An industry insider told Yicai that while ETC holds comprehensive data on all vehicles and their owners, internet giants such as Alibaba and Tencent also have access to this information. These tech titans have all made high‑profile moves in the automotive aftermarket, yet none of their initiatives has ultimately succeeded. “The automotive aftermarket may seem large, but it is a highly complex industry.” ”

The industry professional believes that breaking into the automotive aftermarket isn’t particularly difficult, but so far no company has achieved notable success, nor have any replicable success stories emerged. If ETC seeks to break into the automotive aftermarket, it may ultimately end up being all hype and little substance.

The Unknown Future

Does that mean ETC’s “entry into the city” challenge is bound to fail?

Such a conclusion may be overly hasty. First of all, ETC is about “entering the city,” not “encroaching” on it; rather, it serves to address the shortcomings of the existing market. For example, in the smart parking market, aside from large transportation hubs that may adopt ETC as stipulated by policy, the vast majority of dispersed commercial and residential parking facilities across cities are likely to continue relying on video‑based technologies.

Meanwhile, ETC providers are also exploring integration strategies, introducing a dual‑mode recognition technology that combines ETC with video‑based license‑plate identification. This solution addresses critical management gaps—such as weak anti‑counterfeiting capabilities and low recognition accuracy—and enables ETC to enter the parking‑management market in a more seamless and user‑friendly manner.

However, ETC providers must recognize that the policy benefits available along the path to “entering cities” are extremely limited. They need to shift their mindset and collaborate with more business‑to‑business partners in order to further expand ETC’s use cases and reach. “Only by establishing a sound mechanism for sharing benefits can all stakeholders be more motivated to promote the application of ETC technology in parking lots.” ” Zou Shoutian, General Manager of the Intelligent Transportation Division at Beijing Wochi Intelligent Technology Co., Ltd., stated this at an ETC parking forum.

In today’s era of industrial internet development, only those who can deliver substantial value to B2B customers will be able to establish a solid foothold in the market. The same holds true for ETC’s bid to “enter the city”: in the urban arena, with numerous stakeholders at play, the policy‑driven benefits enjoyed on highways are unlikely to translate into the cityscape. By moving beyond reliance on policy and genuinely addressing market pain points to meet user needs, only then can ETC’s integration into urban areas proceed smoothly.