The automobile industry is booming nowhere more than in China. In 2006, the “Middle Kingdom” has overtaken Japan as second largest automobile market in the world with a total of 7.2 million registrations and is now directly behind the USA. The main driving force behind this tremendous growth is the strong demand for private passenger cars. Experts predict that this trend will continue: if the figures increase by 15 % in 2007 and then by 10 % annually until 2015 (a conservative estimate), China should develop into the world’s most important automobile market over the next few years.
An occasion for MAHLE Aftermarket news, to seek the dialog with one of the oldest established Chinese MAHLE Aftermarket customers – the Shanghai Longfeng Parts Co., Ltd. and its managing director, Xiwen Zhang. The automotive wholesale company, which is also involved in cooperation production, started in business in 1984. In the meantime, it has more than 300 employees working in more than 30 branches, mainly in larger provincial capitals. Its sales range includes especially VW spare parts as well as wearing parts for different international and domestic automobile brands and also their own products. In 2001, the company has been certified according to the BSI ISO 9001:2000 Quality Management System.
MAHLE Aftermarket news: Mr. Zhang, what makes you different from your competition?
Xiwen Zhang: In order to stand out from the competition one has to offer the customers active advantages. In our company culture, harmony, integrity, honesty, enthusiasm and entrepreneurial thinking play an important role. Our employees have strong team spirit and are living part of the company culture. At our management level, we have people with visionary thinking and good leadership qualities – this includes the ability to motivate others and to be able to delegate. With this structure, we have succeeded in the market for more than 23 years – and there is no reason to change this in future.
MAHLE Aftermarket news: How would you define the guiding principles of your company?
Xiwen Zhang: Our success is based on four cornerstones: trust, honesty, dynamic and performance. We have been following this concept since the formation of our company, since the first sales office and the first employee – and it remains the basis for every expansion and every new branch office. Of course, an important guarantee in the implementation of this concept is also how the management sets an example.
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| In dialog with MAHLE Aftermarket news: Xiwen Zhang, managing director of the trade company Shanghai Longfeng Parts Co., Ltd. | | At the Shanghai Longfeng Parts Co., Ltd. the employees “live the spirit” of the company. |
MAHLE Aftermarket news: What are your ideas about your future development? And what effect has this on your business strategy?
Xiwen Zhang: One of our most important tasks will be to recognise the development trends in the Chinese automotive aftermarket and to respond accordingly. It is well known that diversification and privatisation are on the increase – while the number of vehicles grows steadily. Therefore, it will be absolutely essential to adapt and expand the distribution network and market coverage to these circumstances. This includes the need to add further vehicle brands to our spare part range all the time.
MAHLE Aftermarket news: Mr. Zhang, what developments in the Chinese market concern you currently most? And how do you align your strategy accordingly?
Xiwen Zhang: In our opinion, the market is characterized by 3 important factors. Firstly: business transactions normally take place in so called automotive parts markets in which all the sellers of a town gather together. Secondly: business is conducted more and more locally and less centrally. Thirdly: the profit margins are getting smaller.
With the influence of larger chain stores, independent fast-service outlets, more and more demanding customers and government regulations, the market moves away from fragmentation towards standardisation and specialisation. Our aim is to adapt optimally to these market trends.
MAHLE Aftermarket news: Taking about MAHLE – what can and will MAHLE contribute to your continuous positive development?
Xiwen Zhang: Our company will concentrate in future more on universal wearing parts. In this context, we are especially interested in the filter section of the MAHLE product range. We want to expand the cooperation in this field further. We are pleased to see that MAHLE has fully recognised the tremendous market potential and is working with full speed on a wider coverage for vehicles in the Chinese market. These are also for MAHLE Aftermarket the best conditions for increasing its share of the market further.
MAHLE Aftermarket news: Mr. Zhang, thank you for this insight into the Chinese automobile aftermarket and the interesting conversation – and we wish you and your employees continuous success.