Global participants rate it as a ‘Premier’ show
The 12th edition of Automechanika Shanghai 2016, organized by Messe Frankfurt, one of the world’s leading trade fair organizers, solidified China’s position as the top sourcing hub at the global level. The four-day fair held at the National Convention and Exhibition Center, Shanghai, from November 30 had more than 5,700 exhibitors from 42 countries, seven per cent higher than last year. The increase in showcasing space in 13 halls boasted of a 12 per cent increase and witnessed a nine per cent hike in the number of visitors from 140 countries.
Catering to different trade zones such as parts & component manufacturers, E-mobility & Infrastructure, Electronics & Systems, including Connectivity, Repair & Maintenance and Accessories & Customizing sectors, the fair held 56 fringe events for the interested visiting delegates.
While there were many firsts to the credit of the show, like Indonesia and Morocco making their debut, there were first timer companies too, such as ACDelco and Huf, among others. Further, the re-appearance of major brands was indeed a morale-booster.
The international pavilion held displays from 18 countries, including Turkey, Korea, Malaysia, Italy, Singapore, and Poland. Indian companies were clustered under the umbrellas of CII and ACMA.
Foreseeing major changes in global auto industry
Riding high on the wave of success that Messe Frankfurt has achieved with various Automechanika shows around the world, Mr. Michael Johannes, Vice President, Messe Frankfurt Exhibitions, observed: “Commercial vehicles are the drivers of innovations and development in the automotive industry today because it is this sector that will push the industry to be more cost effective in the coming years. The automotive industry will face challenges by way of innovations and technology in the next five years. Hence, we have to be prepared so that the industry can take advantage of it in the future.”
Automechanika Shanghai 2016 was primarily focused on the automotive aftermarket.
Managing to outshine the European show, China became the hotspot for the international automotive industry giants to meet the suppliers, the manufacturers and products, besides reaching out to customers and suppliers from Australia, Japan and other South-East Asian countries. While many brands boasted of their presence in China, there were many who were present to gauge the market, meet customers and potential customers, and collect market intelligence.
Gifts to China
Major brands like Bosch, Continental, Schaeffler and Ravaglioli launched new innovations. Mr. Hollmann Jan, Vice President, Marketing – Aftermarket, Bosch, shared: “Automechanika Shanghai is appropriate for us to show our solutions to the regional market here, especially new launches like our steering products and service solutions. We have also launched our Customer Loyatly Program and the cataloguing app.”
Continental International’s Executive Vice President – Independent Automotive Aftermarket, Mr. Rolf Sudmann, was in agreement. He said: “We are mainly here to present our new products, ideas and service solutions for the independent aftermarket. We have introduced a small tensioner that measures the installation and pressure of the timing belt, especially for the Asian market, and it will come to India in a few months. The potential in China is much higher than in India which will need at least five years to come at par.”
The NTN Group, a top manufacturers of wheel bearings, tensioners, timing belt kits, suspension trust bearings, has been part of the show for the last five years. Mr. Pierre Touvier, General Manager – Sales, Asia & Eastern Europe, said: “We are here as NTN SNR, a branch of the NTN Group. The Chinese car park is still young and we are OE producers, so we cater to the cars which are just after the warranty period. We believe that China will be a big market in the next few years for us.”
Schaeffler launched FAG Smartset to celebrate completing its 40 years in the aftermarket. Designed to significantly lower the repair time, the response of the regional market, according to Mr. Thaddaeus Ulrich, Product Manager, was ‘good’.
Gaining upper hand
The Chinese and Indian aftermarkets need different marketing approaches, according to Dr. Ferdinando Moro, Commercial Sales Director, Ravaglioli. He explained how the Chinese are seeking better quality now as against their image of mass producers of cheap quality, “Part of Chinese people look for premium equipment and they want high quality, reliable and safe equipments.”
Shedding light on the Indian and Chinese market approach, he said: “In India we work with the Madhus who sell to different brands. But in China, each manufacturer will approve two or three different companies.”
According to him, China is a good meeting point where one can meet people from Australia, Malaysia, Korea, Japan and the Middle East. Ravaglioli too introduced an innovative method of demounting tyres for the Chinese market which, according to him, ‘is made in-house and is unique in the world’.
Some multinational brands made use of the platform to target customers from the rest of the world, excluding China. Teknik Balans, a Turkish company founded in 1978, producing balancing machines for garages and for industrial use, was a case in point.
Mr. Emre Akyil, Technical Sales, shared: “This is our third time at Automechanika Shanghai. Strategically, we book our stall inside the Chinese pavilion even though they are not our target market but we are looking for distributors here.” Teknik Balans has its primary markets in Europe and the Middle East.
Indian perspective
With competition hotting up between the two South Asian giants, the Indian stand was strong and optimistic on the basis that offering quality consistently will win it the market from those who cannot sustain quality in the long term. An interesting angle was put forth by Mr. P. Sharan Arora, MD, Brakewel Automotive Components: “We never thought we would have Chinese customers even though we were not targeting them. Last year we had serious enquiries from the Chinese people, and now they are our customers. This year too we have Chinese approaching us. We are planning to set up a warehouse here soon.”
Added his son Mr. Sandeep Arora, Director: “This year our Chinese customers have come back to us to place repeat orders. They are looking for easier ways of procuring our products. So we are going to find logistical solutions to help them out.”
According to the father-son duo, global perception towards Chinese quality as against Indian consistency is changing. They said, “It is their image of producing cheap products that is working against them, but in our favor. The global customers were opting for the Chinese products before, but now they want good and consistent quality products from India.”
Mr. M. Sethi of K.V. Tech India, had an interesting point: “We manufacture commercial vehicle components like suspensions, brakes and axles and our target audience is Europe and the US who visit their Chinese suppliers. Our quality and cost are better than the Chinese, especially in the large dimension components for commercial vehicles. India has a much better chance in this range where China is unable to compete. We specialize in this range which is difficult to source from China.”
Agreed Mr. Anirudha Arya, International Marketing Manager, Adroit Industries India Ltd.: “Customers are now conscious of quality. They are asking for quality from the Chinese suppliers as well.”
Tooting Indian supremacy & challenges
Roots Industries, one the top Indian brands in horns and high precision machine components, is confident of winning over new global buyers. Shared Mr. S. Raghu Prakash, Head – Export Marketing, “in our product bouquet the Chinese quality has not improved, so the customers prefer us.”
Then there is the Cosmo brand of valve seat inserts from XLP Engineers Pvt. Ltd. which holds up the other end of the spectrum because their target buyers are Chinese. Shared Mr. Aseem Datta, Director – Marketing: “We are competitive in our product range for the Chinese market, that’s why we have customers in China, besides Taiwan and Korea.”
Charminar Jointings, makers of non-asbestos gasket materials, is out to ‘capture the Chinese market’. Said Mr. Hitesh K. Dhingra, Director: “Our market is growing in China and comparatively our price is low and quality good, because of which they are importing from us.”
While that may be true, a major challenge referred to by Mr. Rajiv Duggal, Managing Partner, Empire Trading, was: “The Indian aftermarket doesn’t get any support. China has grown because the aftermarket manufacturers are supported by their Government as in subsidies and exhibiting discounts.”
There are roughly 50,000 small-scale manufacturers in the Indian aftermarket and a tiny percentage of them are into exports. He felt many international buyers do not come back to India for third helpings because of lack of good infrastructure and slack services and delivery, and that is exactly where the Chinese have won the global market.
According to Mr. Mukesh Gupta, Managing Director, Agra Engineering Co., which manufactures engine parts under the brand name Arrow, the Chinese have improved 100 per cent in the last one decade because “the Chinese people learn fast, but it’s always the next customer who benefits from the rectifications made to the products that were sold to the earlier client.”
Knowing that a discerning global customer opts for cutting-edge competitive product, L.G. Balakrishnan & Bros Ltd. offered its niche product. Mr. N. Suresh Kumar, General Manager – Marketing, said: “We meet our European customers here. Though Chinese prices are rock bottom, we concentrate on specific technological products like fineblanking parts, and the Chinese cannot compete with the engineering skill that is involved in this.”
There is another potential advantage that India has, according to Mr. Rajinder Kakroo, General Manager – Exports, Shriram Pistons & Rings. He said: “The manufacturing cost in China is going up and hence the price difference is between the Indian and Chinese products has narrowed to 10-15 per cent from 20-25 per cent.” As a supplier to OEMs in China, the company was present to receive first-hand experience of the Chinese market and suppliers and to improve their own performance in the Chinese aftermarket.
Studying the Chinese market closely and offering ‘dependable’ and consistent products, Gajra Gears’ Rashmi Gajra – Business Development, has her eye trained on capturing customers from the ASEAN region, but felt that Indian stalls could have better branding.
Mr. Girish Bansal, Sr. GM – International Marketing, Neolite ZKW Lightings Pvt. Ltd., observed: “We are focused on gauging the kind of competition and sourcing that Chinese companies offer. The fair is a great opportunity to know where one stands.”
Automechanika Shanghai 2016 drew the most discriminating and intelligent global businesses in huge numbers, making it a really mammoth show.