“Totally different situation”
The Chinese market differs from the Americas and Europe. In addition to OEMs like Tesla, which we supply globally, there are numerous customers that we serve exclusively in China. In Wujin, we produce a lot of parts for truck manufacturers, whose demand has dropped significantly this year. We spoke with Qiwen He, who is responsible for sales in China.
Aerial view of the new building
The brand-new entrance area of the new plant in Jintan
Impressions from inside the plant
Still under construction: The new Geomet coating line at the Jintan plant in China.
What is your general assessment of the market and sales situation in China at the moment? What are our challenges? How does it differ from Europe and the Americas?
In China, the situation in the automotive market for passenger cars and commercial vehicles differs significantly, especially for heavy trucks. The commercial vehicle business declined by 34.2% year-over-year, especially as the demand for heavy-duty trucks fell. In total, only around 2.48 million commercial vehicles were sold in China. This obviously had a major impact on our sales figures, whose tonnages fell by 33% compared with the previous year. This gap is expected to narrow due to increasing demand in the passenger car business. In September, Chinese consumer demand for passenger cars was further boosted by a series of government measures and campaigns. In the third quarter of 2022, passenger car production and sales continued their flourishing momentum.
For next year, the forecasts for the Chinese market look quite different again: Strong growth is expected in both passenger cars and trucks. Total sales of around EUR 56.3 million are expected, a significant increase on the forecast of EUR 35.7 million for 2022.
Which products for which applications are currently relevant for KX China? Are there markets outside the automotive sector that are being targeted?
We continue to focus on automotive parts, but for different applications. The range extends from traditional combustion engines for small car engines and heavy trucks to hybrid engines and chassis parts for traditional oil-powered vehicles and vehicles with new drive types such as electric vehicles. In addition to the normal high-strength fasteners, we are also developing 14.9 UHT bolts, which are expected to go into mass production from the 2nd half of 2023. Similarly, CFP parts are being mass-produced to meet the requirements of various customers. Meanwhile, we are in business with off-road manufacturers for various applications such as marine engines, construction machinery, and so on. However, the volumes and sales here are still low at present.
Responsible for Sales in China: Qiwen He
Vehicle production in China 2022
(up to the first three quarters)
Number of vehicles produced and Change compared to the previous year
Cars
16.99 million
+ 14.2 %
Trucks and commercial/ utility vehicles
2.48 million
- 34.2 %
Do we have a solid customer base or a high fluctuation among our customers?
What strategies are you using to win new customers?
We have a number of loyal customers with whom we have had business relationships for many years, some even since KX started doing business in China. Nevertheless, we have to adapt and keep up with the pace. As the automotive market in China is changing extremely fast from traditional combustion engines to NEVs, we need to prepare for this change.
How does the launch of the new plant in Jintan help us to improve our market position?
The successful start-up of the Jintan plant helps us to expand our capacity to meet the increasing demand from Chinese customers, especially car manufacturers. In addition, the new Geomet surface coating production line enables us to compete with local fastener manufacturers. In the past, we had to outsource the process, which had a significant impact on the business with chassis parts for the electromobility market.
KXpress
