"China Remains a Key Market" Aftermarket opportunities
While the overall economic mood in China is quieting down, the aftermarket has nowhere near reached its peak. Optimal market chances for ZF Services, explains Markus Wittig, Vice President of ZF Services in the Region of Asia-Pacific, in the interview.
China's economy is always good for a headline. But whereas these past few years, the news were dominated by record figures, stock-exchange turbulences are currently making headlines. There is no reason to panic: At seven percent, the market is still experiencing considerable, albeit slower, growth. After all, China is – and will remain – one of the most important growth markets, particularly for the automotive industry.
Developments in the aftermarket occur with a certain delay anyways, which is why the after sales business has nowhere near reached its peak. By 2017, the average vehicle age is estimated to be 4.5 years, a point at which, according to experience, expenses for spare parts and services will be at their highest. Markus Wittig explains how ZF Services plans to make use of this potential. As the successor of Joseph McCorry, he took over the post of Vice President of ZF Services in the Region of Asia-Pacific in July 2015.
Mr. Wittig, you started your career at ZF Services 16 years ago as the Area Sales Manager South/South-East Asia and spent more than twelve years in Shanghai and Singapore. Based on your long-standing experience, how would you assess the current developments in China?
In spite of reduced expectations, China remains one of our key markets with a continuously high potential for growth in the aftermarket. Many of our customers are active here. This is why we will continue to develop the after sales business locally – for Passenger Cars, Buses, Trucks, as well as Marine and Rail, with a focus on the requirements of the different segments.
And what are these requirements exactly?
It is very important to Chinese vehicle owners to keep their vehicles in excellent condition. They therefore expect high-quality spare parts and services. They tend to take their vehicles to OEM workshops, so-called 4S stores. We believe that this will change over the coming years. Independent workshops offering high-quality services at competitive prices are becoming increasingly popular. We would like to support these workshops with innovative one-stop shop solutions, spare parts in OEM quality, and services tailored to meet current demand.
What are you planning to do on the product side in order to support the success of ZF Services in China?
We are well established in the area of spare parts and services for vehicles produced by European and American vehicle manufacturers. The key to securing an excellent position lies in products for Asian vehicles which are in demand. We are therefore working on expanding our portfolio to offer even more components tailored to meet Asian market requirements in the future. For this purpose, we are investing in our product development locations in Singapore and Shanghai. We want to offer the entire portfolio of shock absorbers, steering components, and suspension for the most popular vehicle models in ASEAN and Taiwan by 2018.
How do you make sure that the products always comply with ZF Services' high quality standards?
By offering training courses and advanced training, we make sure that the technical know-how remains at the same high level at all our locations worldwide. Globally, ZF Services exclusively sells spare parts in OEM quality, which is also true for the products developed in Asia.
However, a comprehensive and high-quality product range alone is not enough most of the time.
That is true. This is why we complement the further development of our products with a strong expansion in the area of services. In the coming five years, we will expand our service network in the Region of Asia-Pacific by 30 percent. Particularly in China, we would like to double the number of our service partners over the next three years in order to be available to our customers locally in all of China's provinces.
At approximately 9.5 million square kilometers, China is one of the world's biggest countries. What is the best way to reach the highest possible number of customers there?
For the Chinese, digital tools play a very important role. Online shopping is used even more widely than in Europe: According to forecasts, as much as 65 percent of the population will be using online shopping by 2017; that is two times the number in the US and even four times as many people as in Europe. This is why we will also focus on the online distribution of our ZF Services products. Next year, our ZF flagship store will go online on the popular T-Mall platform. Additionally, we are trying to connect with our customers more and more via social media channels such as WeChat. We are therefore working on having a leading presence both offline and online to make ZF's after sales business in China even more successful in the future.
Photos: Thinkstock, ZF, Fotolia