Webasto: aiming at 100% localization product

Interview with Freddy Geeraerds President & CEO of Webasto Roof Systems China Ltd.

Gasgoo.com: Do you agree that Chinese automotive industry will reach a new era in the coming 5 years? What major changes will occur? What kind of effect will the changes have upon the auto parts industry?

Freddy Geeraerds: We do expect the Chinese automotive industry to grow further at a faster pace compare to the rest of the world. However, we also expect further consolidation of domestic OEMs and component manufactures. The automotive industry has very strict technical requirements related to cost, quality, safety and technology. This requires important investments in R&D, human resources and manufacturing facilities, both at the OEMs and the suppliers. Because the opportunistic business approaches a “me-too” attitude, many companies have entered the automotive industry in the past 10 years. To gain market share and win projects, new entrants often have decreased margins neglecting future investment needs.

In our market, from a product perspective, we see a move from the classic tilt and slide roof to the large panorama roof. This type of roof has an important impact on the appearance of the car, allows a large opening and encourages to “feel the drive” with an airy, roomy sensation and a lot of day light into the car. To go even further in “feeling the drive”, our colleagues at Webasto-Edscha are in close contact with the domestic OEMs to support the first made-in-China car with a convertible roof. At Webasto, we also supply very efficient heaters that do not need for the car engine to run. Also here we see a strong demand, most certainly in the North east of China with its cold winters.

We are confident about the growth of Chinese automotive industry. The Chinese consumer loves the sunroof so demand is very high. Webasto supplies basically every OEM in the world and since all of the OEMs want to increase their sales in China we fully support and follow our customers. Often we have already produced a certain roof system for the OEMs abroad and bring this then to China. If necessary, we make modifications or do some redesign to make the roof system precisely suitable for Chinese market, always ensuring top quality and specifications.

Gasgoo.com: How do you think of the internationalization of the Chinese local auto company?

Freddy Geeraerds: It’s difficult and very demanding. At various points in time, industries transgressed from copy to innovation. The investment of doing this is huge; here we are talking about billions of dollars. For the development of a car one needs to start all the way from the market that defines the concept of the car and the design of thousands of components going into the final product. The technology, the development, the validation, the market image, the brand, everything has to match and there is no room for error. To do such thing, the Chinese local companies still have some way to go in understanding the international consumer, to gain confidence and meet international specifications. Simply put, a 100-year experience of some of the famous car producers is not simply reproduced in a matter of years.

Gasgoo.com: What is Webasto’s development trail and future development plan?

Freddy Geeraerds: Webasto with its roots in Germany, has already a century of experience. In China, we entered in 1996 and began after-market sunroof business. At that moment, the local demands for sunroofs were very low, even by the OEMs. Gradually as the OEMs started to ask about the sunroofs Webasto also began to install factories in China. Systematically the capacity has been increased. In Shanghai we started in 2001 with the OE sunroof business. In 2002, in Changchun, we started in the first phase of localization in China. In 2004 we started using local parts for assembling in Shanghai and Changchun, and launched deep localization. In the year 2006, Chongqing, Guangzhou and Beijing were founded.

In 2009 both in Shanghai and Changchun we have already moved to new factory with enlarged capacity. We continue to do so and soon will increase capacity in Guangzhou and Chongqing. In Shanghai we established a full R&D and testing center. As our customers are expanding into other parts of the country we are moving with them and we are now for example establishing a new plant in Yantai. Our principle is to have a flexible manufacturing footprint and moving with our customers to provide them the best service at world class standard.

Gasgoo.com: How do you regard the competition against the other auto parts companies? Does Webasto have its own unique ways in R&D and cost control?

Freddy Geeraerds: We follow 3 strategies: one is to transfer the design of advanced equipment and process, and roof systems, and develop our employees by sending them to other international Webasto facilities.

This is in support of our second strategy: create a strong foundation in China by becoming a self-sufficient R&D center that provides tailor-made solutions and ensures international standards for domestic and international projects. Which leads to the third strategy: we have a diversified product port-folio aimed at hi-end premium roofs, medium and basic roofs. In this way we have an application that can meet each customer’s requirement relative to cost targets and value expectations. We do strictly follow the cost of each project and select the best cost for each element combining technology, localization and international sourcing. We have developed more than 20 types of sunroofs for different platforms and as a basic rule we avoid the proverbial “re-inventing the wheel”. As capabilities of our suppliers increase, we will be able to reach a 100% localization rate.

At Webasto, we continuously drive to reduce the cost and increase the value. We have our economies of scale and close partnership with our suppliers on the material side. Our focus on cost already starts in the design stage: we concentrate in the smallest detail on the best technology fit for the relevant application, reduce the number and weight of electronic and mechanical components, while allowing for the most efficient manufacturing, including ease of installation of the complete roof at the OEM. It goes without saying that this is all in full and strict adherence to the customer specifications. Given that Webasto is a German company, we take pride in our strong engineering and industrialization roots.

Gasgoo.com: As a German company, how does Webasto promote the localization process in China? Does Webasto have some strategy in Chinese talents development?

Freddy Geeraerds: Talented human resources are the most important asset for a company. The employees make the difference. Today it’s not so difficult to make a simple sunroof because a lot of people are capable to copy. Any one can buy a machine and find the information about the process. The real differences between companies are the people and their expertise.

Talents are the most valuable treasure for Webasto, so we put much attention to that. We develop our people, such as talent exchange with other subsidiaries from abroad. We have some expert staff coming here from abroad. The aim is twofold: to coach and train the Chinese employees and build bridges of understanding between cultures. Each time a foreign staff goes back home, or to another international location, they take a part of China in their heart. It creates bonds for life that improve the communication and project management across borders. I strongly believe in nurturing our Webasto culture here in China. Therefore we can make our employees feel the same if they go to Germany (headquarter), Webasto US, Japan, India… They need to feel comfortable in Webasto, wherever in the world they go, whoever colleague they work with and whatever project they worked on. Team work, integrity and a pro-active ‘can-do’ attitude are key elements of our company DNA.

We continuously look for ways to improve and to increase our technical know-how and capabilities. Important here is the hiring of the right resources. We put a lot attention on talent when interviewing applicants. We not only focus on the education, functional skill and experience but also pay attention to his or her personality i.e. does the person have a backbone, do they solve problems and can they face challenges. It is not just the job opening at hand we evaluate a candidate for, but we are looking at the next job and the one after. Successful employees will make the company successful and vice versa.

Gasgoo.com: How would you interpret the word "innovation" in the development of your company? What do you think is the key feature to maintain a sustainable development?

Freddy Geeraerds: Webasto has build a leading market position in the roof systems, where several large competitors have a hard time to survive, have gone through restructuring, consolidation and closure. We are successful in supplying to our customers exactly what they want and what they look for. The only way one can achieve this is by consistently striving to be the best and by bringing new ideas to the market. The innovation is the engine that will help selling the products in the future: solar cells, light weight roofs, new materials… are some of the technologies we are working on to create more value for the OEMs.