The Automotive Focus Group (AFG) on the Eastern Seaboard is known for its proactive approach to the industry. The February meeting, held at the Nova Platinum hotel was addressed by Klaus Steven, a German national who has worked in China since 2003 starting numerous production facilities for some of the Tier 1 automotive suppliers such as Volkswagen Group China, Siemens VDO, and Sumitomo Electric.
The very illuminating address was named “Follow the Money” covering various ways of winning business with Chinese/International OEM’s. And Klaus emphasized just how big the auto business will be in china with estimations being given of 27.3 million passenger vehicles by 2022. These figures come from the top 10 Chinese manufacturers. As Klaus said, “Follow the money!”
He went through the major players in the Chinese auto manufacturing and these were SAIC (with a projected 6.6 million production by 2022), Dongfeng and FAW. To be successful in China, he advised that a local Joint Venture is the way to go. You can do it on your own, but don’t expect the official approvals to happen any time soon!
Most commodity supplier safeguard business through JV´s, and these include SAIC: HUAYU Automotive Systems Co., Ltd. also known as Hasco, FAW: FAWER Automotive Parts Limited and BAIC: Beijing Automotive Industry Holding.
While Volkswagen may be in a spot of bother in the west, this is not reflected in Chinese sales, with predictions for 2022 for VW topping 4.8 million vehicles.
Klaus’ final assistance came in his final slide in the PowerPoint presentation: “Plan enough capacity/time for approval of production!”
This was a very clear and direct message to the AFG members, from someone who has guided six start-ups in China and definitely has earned the title of “expert” in the Chinese rice field.
Following the lecture the AFG members retired to around the pool where GM Max Sieracki ensured everyone ate well and had enough to wet the proverbial whistle.