German suppliers chase opportunities in China
Resource from: Automotive News Euro Likes:179
Aug 07,2015
MUNICH -- Last year, nearly one vehicle in four was produced in China, putting the country far ahead of the United States, Japan and Germany.
Companies in China with Western participation such as SAIC Motor Corp. and China FAW Group Corp. are still the engines of growth there.
But domestic Chinese companies such as Chery Automobile Co. and Geely have been carried along in their wake and are strongly advancing on them. That could give German suppliers a second foothold in China.
"Many German suppliers are in China due to increased production at the country's joint ventures," said Peter Fuss, senior advisory partner for automotive with EY. "Until now purely Chinese manufacturers have not been a high priority. But they have meanwhile caught up technologically. They are also participating in the growth of the market because they now are capable of offering attractive products to first-time buyers and the middle class."
The Chinese government also is playing an important role because it has a strong interest in seeing purely Chinese manufacturers succeed. "We are at the start of a development that should be taken seriously and that offers significant opportunities," Fuss said.
Domestic Chinese manufacturers are particularly dependent on suppliers' expertise when it comes to complex technologies and their integration into cars, he said.
German supplier KSPG shares that assessment. The company, which sells the Kolbenschmidt and Pierburg brands, generated revenue of 640 million euros ($775 million) in China last year, about one-quarter of its total revenue.
"Purely Chinese manufacturers account for about 10 percent of that figure," said KSPG CEO Horst Binnig.
KSPG's focus in China varies by business area, he said. Orders from international manufacturers are the mainstay for parts such as pistons, slide bearings and structural components for bodies and chassis.
The situation is different in mechatronics, which merges electrical, mechanical, computer and industrial engineering. "Here we have a strong orientation to local manufacturers," Binnig said. "A market is emerging here not least of all due to government regulations on fuel consumption and emissions. Chinese automakers are looking for the latest technologies."
German supplier Webasto has seen a similar picture emerge. It is a supplier of heating systems and leads the market in roof systems.
"In fact, purely Chinese automakers are becoming more important to us," said Holger Engelmann, Webasto's CEO.
Here the focus is on sliding roofs. "We're seeing local manufacturers increasingly ask for higher quality and more modern technology," he said. "We're also seeing a trend toward ever-larger panorama roofs."
(Automotive News Euro)
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