"Micro-growth" Era Helps China's Automotive Industry Develop

Affected by the international situation, China's national car market is in a downturn. How do investors in the automotive industry need to respond to the crisis? Regarding related issues, we interviewed Wu Meng, general manager of the Asia Pacific Transportation Business Division of Southco Locking Technology (Shanghai) Co., Ltd.

Reporter: 2012 was the tenth year of Southco's business in China. What is the current development of Southco's companies in China? How is Southco's business development in other emerging markets?

Wu Meng: It has been ten years since Southco launched business in China by 2012. In the past ten years, Southco has made huge investments in the Chinese market. It has established manufacturing, engineering design, sales and distribution bases in Shanghai and Shenzhen respectively. Today, the total number of employees employed in China exceeds 850. The proportion is close to 100%. Last year, Southco also expanded the scale of its factory buildings in Shenzhen, upgraded its engineering design capabilities, added advanced production equipment, and invested more than RMB 40 million in the initial stage.

We have been increasing our investment in international emerging markets. In addition to China, countries such as India are our investment targets, and even if investment in some countries does not see returns for a time, we will continue to invest there. And China is a very successful case of adopting such an investment method.

Reporter: Southco calls the products produced by the company collectively the key “contacts”. What is the meaning of such naming?

Wu Meng: First, the products produced by Southco are visible and tangible, and consumers can feel it directly.

Secondly, Southco's products, with its unique human contact solutions, ensure the positive first impression while providing optimal safety and stable operation.

With the advancement of society and the increase in spending power, Chinese customers’ demands for automobiles have become more than just a means of transport, but also a kind of enjoyment, a symbol of quality of life, taste and status, so the overall design of car interiors and Whether the functional configuration can reflect unique personality and meet people's demand for technology, fashion and sensory quality is increasingly attracting people's attention. Southco's ergonomically designed solutions help automakers provide occupants with exceptional comfort, unique operating features and optimal product performance, which in turn increases the occupant's vehicle brand for carmakers. The recognition helps car manufacturers establish a good brand reputation.

Reporter: Southco covers a wide range of business areas, including the automotive industry. What are the products and services provided?

Wu Meng: Southco has more than 65 years of product design, development and production capabilities in the field of engineering solutions, and has more than 40 years of rich production experience in the automotive industry. Southco can provide a variety of superior and unique mechanical or mechanical electronic locks, hinges (positioning control technology) and fasteners solutions for the car interior design of OEMs, system integrators and Tier 1 suppliers in the automotive industry. . From design, development, testing to production, Southco offers a full range of services as well as design and technical support.

Reporter: At present, what are our customers in China? Which are the customers who are important contributors to profits?

Wu Meng: Like the Volkswagen Group, General Motors Group, BMW, Chery, Guangzhou Automobile, Audi, Cadillac, Hyundai, Jaguar, Land Rover, Mercedes-Benz, Nissan, Suzuki and Ford all use Southco's products.

Most of our major customers are from the United States and Europe, and some from Japan, but not much because the cooperation with the other party is relatively late.

Reporter: Are we supplying the mainframe factory with domestic market or export?

Wu Meng: mainly to meet the needs of the domestic market, almost 90% of the products are sold in the domestic market.

Reporter: Southco has cooperated with numerous OEMs, including joint ventures and auto brands. How does the cooperation with different car companies make you feel different?

Wu Meng: In addition to having a good product, it is more important for a company to have high-quality services and have the ability to develop corresponding products. And to meet the various requirements of customers to you, as far as possible to meet these needs.

In the use of raw materials, the use of functions, we will fully communicate with customers after the production of the product.

Reporter: With different car companies, the profit gap is obvious?

Wu Meng: With respect to profits, sometimes international car companies will push prices lower. After all, they have had so many years of operational experience in the automotive market, how much parts are profitable, and how much the price is. The other party is very clear. And often these OEMs are also very strong. In addition, in the past two years, international brands have also gone down to the low-end market, and the purchase price has further pushed down.

The domestic self-owned brand car companies, one is that their demand is not so much international car prices, in addition, the independent brand car companies are also moving into the high-end market, the need for higher quality products, the cost of procurement is also therefore constantly rise.

In addition, self-owned brands now have higher quality requirements than joint-venture brands. The reason why the prices are not high is not that they are really cheap, but are strategies that are used to gain more market share.

Reporter: In the past two years, what kind of changes have taken place in the cooperation with domestic auto brands?

Wu Meng: In the past two years, the cooperation with self-owned brand car companies has been continuously expanding. Nowadays consumers are demanding more and more products, and the current automobile market in China has entered a “micro-growth” era with increasingly fierce competition. In this case, only those manufacturers with high-quality products can be in the market. Surviving competition and scramble, so they are also actively cooperating with us.

Reporter: Your company's products for its own brands are mainly aimed at the high-end cars they produce. Is this?

Wu Meng: Our products range from 450,000 yuan to 200,000 to 300,000 yuan.

Reporter: Compared to its peer competitors, what do you think Southco's competitive advantage is reflected in?

Wu Meng: With its rich experience and expertise in the automotive industry, Southco can provide innovative and customized solutions for its customers. Southco has strong product design and development capabilities. It is based in design and R&D centers in China, Europe and the Americas, and has extensive product development capabilities such as finite element analysis (FEA), rapid prototyping and product testing. This capability not only guarantees product quality, but also saves development time and meets the needs of the local market for design, production and support. At the same time, Southco has a number of platform solutions that can help car companies reduce development costs and time, while reducing the technological risks of development.

Reporter: At present, the Chinese auto market is on the one hand growing at a slower pace. On the other hand, it is also facing a serious problem of overcapacity. In the face of such a severe market situation, what steps will Southco take to deal with it?

Wu Meng: Southco has been operating in the Chinese auto market for 10 years. He has accumulated rich experience to fully understand the Chinese market and can provide timely and prompt response and support to overseas automakers operating in China and in China. . As more and more Chinese companies want to expand overseas markets, Southco as a global company can not only provide superior technology and services for these companies, but also can gain a profound understanding of international industry standards. Chinese companies' products enter the international market to provide effective information. From a long-term perspective, they can help Chinese companies gain a significant position in the international market.

In addition, in order to provide customers with the most outstanding support and services anytime, anywhere, Southco has made continuous investments in sales, distribution, engineering, manufacturing, customer service, and technical support, and has established an extensive global network to ensure that it is available anywhere and anytime. The customer maintains close contact.