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Witzenmann's marketing manager for public relations Martin Schnaufer (Witzenmann) arranged something in a small booth. In China Agricultural Exhibition Hall, where there are not a large number of visitors, the booths of this size can easily be submerged in a sea of ​​signboards. When he saw reporters stop at his booth, Martin was a little excited. He explained in English the company's products from Germany and the products he produced. He then handed over neatly prepared materials to reporters from behind the counter and paused and said, "I hope you Learn more about our company."
Do not think that this is a small company seeking media promotion. In the parts exhibition hall of the Beijing Auto Show, similar enthusiastic introductions from companies abound. Most of these companies come from overseas and basically have factories in China. What's more, these companies are not small emerging companies that are eager to expand their businesses and create brands. On the contrary, most of them have accumulated more than a decade of professional expertise and the ability of multinational companies to operate.
Take Weitzman, for example. This company, born in 1854, has expertise in the production of flexible metal tubes and bellows. Its products are widely used in many different industrial fields, such as the automotive industry, chemical industry, and energy. Production and aerospace. Today, the Weitzman Group has more than 2,400 employees and has established more than 20 subsidiaries worldwide, including China. Major automobile manufacturers such as FAW-Volkswagen, Shanghai Volkswagen and Shanghai General Motors are customers of their Chinese companies.
In the enthusiasm of foreign-investment parts companies, the desire for the Chinese auto market has not been concealed. After experiencing the overproduction and slowing demand in Europe and the United States, foreign suppliers of spare parts can barely control their desire for this emerging market in China. With the end of China's accession to the WTO, more and more foreign companies will enter China and set up factories. For the auto parts industry, China's low processing costs and the rapidly growing domestic auto market are undoubtedly a huge gold mine.
Chinese opportunities
ASIMCO Industrial Technology Co., Ltd., which entered China in 1994, currently has 18 manufacturing companies and 36 sales centers in China. There are three manufacturing companies in the United States and one branch in the United States and the United Kingdom. Prior to entering China, ASIMCO chairman Jack Pinkowski was an investment banker on Wall Street. Relying on the development of China's spare parts market, he has now established a large manufacturing and sales network in the world. Jack told reporters: "Carlyle (acquires XCMG) chose a leading company in the industry, and we chose and rooted in an industry."
?? Jack is very grateful that he selected China's auto parts industry before the industry boom. In a 2005 report, consulting firm Ernst & Young pointed out that many parts suppliers (North America) have encountered problems such as financial constraints, lack of proper return on capital, and reductions in corporate valuations. They have also been threatened by overseas manufacturers.
A supplier president said that globalization of the supplier industry is accelerating. "The more globalized you are, the more flexible you will be." This strategy is also reflected in more and more company actions. Tower Automotive, a large-sized frame supplier, claims that its North American business accounted for only 4.9% of its revenue in 2005, its European business was 12.4%, and its Chinese market contributed 21.4%. With the continuous development of China and other emerging markets, the company that filed for bankruptcy protection has already seen the hope of resuming normal operations.
Another example is the Denso company that follows Japanese auto companies into China. From the beginning of 1994 to Xiali Automobile, Denso established three branches in Tianjin, Shanghai, and Guangzhou, and established 23 manufacturing companies, 59 air conditioning repair shops, and 79 diesel engine repair stations.
"At present, our customers are still mainly Japanese companies. Toyota and Honda together have 80%." Denso Yamada, president of Denso China, said. In his plan, afterwards, General Motors, Volkswagen, Suzuki, Mercedes-Benz and China's own brands will all be their customers. According to the plan, by 2010, Denso China will have 600 after-sales service outlets. Among them, diesel engine repair stations accounted for 1/4, reaching 150, and the sales of electric equipment in China would be close to 800 million yuan. In the world, Denso is already the second largest supplier of spare parts.
Parts competition
At the just-concluded Beijing auto show, both the audience and the organizers focused on the car. The spare parts were arranged to the agricultural exhibition hall and the three-story exhibition hall where little attention was paid. However, when the domestic self-owned brand cars in the pavilion competed against multinational companies under the lights, the competition of the parts showrooms did not reveal any traces of Chinese and foreign confrontation. Hanging above all the big booths is a foreign language logo. Even Wanxiang Group, the largest auto parts company in China, the sales manager of its import and export company told the reporter at the exhibition hall frankly that they are more concerned with the Canton Fair than with the exhibition.
According to foreign experience, large parts and components companies will have close relationship with auto manufacturing companies. General Motors accounted for half of Delphi's operating revenue, Toyota's contribution to the electric equipment business is also roughly this ratio, while Toyota holds a 23% stake in Denso. However, in China, due to the late development of self-owned brand cars, China's domestic parts manufacturers have been in a chaotic situation, seeking to survive in the maintenance market and secondary matching.
Shan Tiansheng, who has lived in China for 12 years, speaks fluent Chinese. His feeling for the Chinese parts market is: "China's famous parts and components manufacturers do not seem to be so much right? I feel all foreign. I did not see a very good China's own auto parts manufacturers."
The competitive situation is constantly advancing from the global to China. The Bosch Group invested 50 million euros in Wuxi to build a world-class technology center; Valeo Group will establish a unified R&D center in Nanjing; Delphi will set up a science and technology R&D center in China and invest 50 million US dollars. While everyone is also concerned about China's low manufacturing costs, these leading companies have already learned how to use China's cost-effective engineering staff for R&D in the global market.
Denso and other parts manufacturers also invested a lot of money to do their own research and development so that they can maintain their leading position in the industry. Jeffrey K.Liker, professor of industry and operations at the University of Michigan, said: "They have very good product development capabilities. I think they are much better than American competitors."
With the increasingly close relationship between the two, automakers are also forced to play an increasingly active role in key supplier companies. Competition among automotive companies is increasingly reflected in parts companies.
In 2005, Standard & Poor's downgraded the credit ratings of more than 20 parts suppliers in North America, and only one of them upgraded. However, on other companies' ratings, it appears to be very generous. These companies have a wide range of customer sources and production plants, and those parts and components companies that have great business links with such well-established automakers as Toyota, Honda, and Hyundai are getting enviable credit registration. If a similar rating is conducted in China, will the lowest score be foreign or domestically owned parts and components companies?