On May 27th, 2011, Continental Group held the opening ceremony of China Automotive Electronics (Jinan) Co., Ltd., a manufacturer of commercial vehicle products in China. Some foreign heavy truck supporting enterprises around Jinan
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This is not the first wholly foreign-owned heavy truck supporting company that has settled in Jinan. Its neighbors - ZF Commercial Vehicle Steering (Shandong) Co., Ltd. and Fushi Automotive Components (Jinan) Co., Ltd. are also from Germany. Enter the supporting system of China National Heavy Duty Truck and other domestic heavy truck companies. With millions of vehicles leaping into the world championship for heavy truck sales, supporting self-supporting systems for Chinese heavy trucks from small to large, they are increasingly exposed to weaknesses and deficiencies. The huge challenge from foreign brands.
Gathering Jinan
Continental Automotive Electronics (Jinan) Co., Ltd. is the only investment project approved by Continental Group in the world since the outbreak of the international financial crisis in 2008, and it is also the Group’s first dedicated commercial vehicle product base in China.
In 2010, the production and sales of heavy trucks in China reached a record of more than one million vehicles, making it the world’s first country with heavy truck sales exceeding one million vehicles a year. While cheering and proud of the new world record, a phenomenon has aroused people's attention. China has become a hot spot for investment by cross-border heavy truck suppliers.
Analyzing and researching this trend, Jinan City, Shandong Province, home to heavy truck giant China National Heavy Duty Truck, is undoubtedly an excellent observation point. According to public information, in recent years, the pace of investment and construction of foreign-funded heavy truck supporting companies in Jinan has accelerated.
The first grape to be eaten was the German ZF Steering Systems Company, which had a deep connection with China's heavy trucks. The Austrian Steyr heavy-duty truck imported from China was the company's steering engine. The cooperation between ZF Steering Systems and CNHTC began in the 1980s and gradually evolved from trade to production. On November 8, 2006, ZF Commercial Vehicle Steering (Shandong) Co., Ltd. opened its doors in the Lingang Economic Development Zone in Jinan, which opened the curtain for the heavy-duty companies supporting Jinan to invest in Jinan.
On May 28, 2008, VOSS Automotive Systems, which mainly manufactures connectors for various automotive applications, established the first Chinese subsidiary in Jinan, Fuchs Automotive Components (Jinan) Co., Ltd. and ZF steering gear (Shandong) Co., Ltd. made a neighbor.
On May 13, 2010, the first Chinese subsidiary of the German Beckett Group opened in Jinan. In the first few months of operation, Bessie (Jinan) Thermal Systems Co., Ltd. has begun to provide cooling modules for CNHTC.
This is followed by the German MANN+HUMMEL Group. MANN+HUMMEL FILTERS (Jinan) Co., Ltd., which invested 4 million euros, opened on May 28, 2010, providing filters for CNHTC Group.
On March 16, 2011, WABCO's second wholly-owned production base in China opened in Jinan. WABCO has entered the supporting system for heavy trucks in China for more than 10 years, and its cooperation with CNHTC has grown rapidly. Today, CNHTC has become the world’s second largest customer of this leading commercial vehicle electronic brake, stabilizer, suspension, and variable speed control product supplier.
The scale of disaster
The entry of Continental Group into China dates back to 1994. The expansion in the earlier period was limited to passenger vehicles, but this did not prevent them from making optimistic judgments on the commercial vehicle market.
In 2000, China's heavy trucks sold less than 100,000 vehicles. In 2007, sales of only one of the heavy truck group exceeded 100,000. In 2007, it was the second year that ZF Commercial Vehicle Steering (Shandong) Co., Ltd. opened. This early bird also quickly benefited from the growth of China's heavy truck market. According to the data, more than 60% of ZF's commercial vehicle steering gear products are supplied to the CNHTC Group. The annual production volume has rapidly increased from the initial tens of thousands of units to about 200,000 units in 2010, and the profit has reached 270 million yuan in more than five years. At present, they are investing in R&D centers and expanding production capacity in Jinan.
The international financial crisis that broke out in 2008 further accelerated the process of foreign-funded companies supporting heavy trucks entering the Chinese market. Six months after the opening of the sole proprietorship of Jinan, in December 2010, MANN+HUMMEL held a global annual management summit in Shanghai and released plans for the future, deciding to increase the proportion of Asia’s total sales revenue to 25%, and China is the strategy important parts of. The financial crisis has provided space for the upgrading and development of China's heavy truck industry and also provided opportunities for regional industry investment.
Disparity in strength
International heavy truck component companies are eager to invest and build factories in China. They are welcomed by many heavy-duty truck companies and local governments, but they are much more arduous for domestic heavy-duty truck parts supporting companies. Because, from the perspective of corporate strength, R&D capability, and product reliability, this is a contest of disparity in strength.
This gap is also reflected in the product's reliability, safety, and production consistency. An insider of the CNHTC Group said that heavy-duty trucks used their own brand-name steering gears that often had problems, and switching to ZF products basically eliminated this phenomenon. After adopting the fast plug-in of the company, the heavy truck leakage of heavy trucks has also been greatly reduced. Small faults are common problems in domestic heavy trucks and have a lot to do with the quality of accessories. In recent years, the upgrading of domestic heavy trucks has been rapid, but the development of self-owned branded parts and components supporting companies has lagged behind.
After heavy trucks introduced the German MAN heavy truck and engine technology, the balance of supporting procurement began to accelerate the tilt to foreign companies. Because, most of them are the supporting providers of Man Heavy Trucks.
The international heavy truck component companies' localized production in China will have a huge impact on the price advantage of local component companies. If the self-owned branded parts and components enterprises cannot upgrade their technological content and technological level as soon as possible, they will probably be eliminated in the new round of competition. 
