Foreign parts makers start stealth strategy

In recent years, the approach of multinational auto parts giants in China has evolved significantly from traditional market strategies that focused on capturing market share and establishing production facilities. Instead, these companies are adopting a more subtle and strategic method—referred to as the "stealth strategy." This involves deep investment in high-tech research and development, allowing them to tap into the more mature and complex Chinese market without overtly competing with local players. One key area where this stealth approach is evident is in the automotive safety system sector. Safety has become a top priority for both consumers and regulators worldwide. According to DuPont Automotive's latest survey, most users consider vehicle safety to be the most important factor when purchasing a car, even more so than performance, entertainment, or fuel efficiency. At the recent Suzhou International Bus Show and World Bus Expo Asia Exhibition, WABCO, a global leader in electronic braking, stability, suspension, and speed control systems for commercial vehicles, made its debut. “WABCO is an industry expert deeply concerned with road safety in China,” said Dr. Liu Liang, President of WABCO Asia Pacific. “We aim to bring our advanced technologies and products to the Chinese market.” WABCO has been actively promoting Anti-lock Braking Systems (ABS) in China, targeting the massive commercial vehicle ABS market. It is estimated that by 2010, China’s demand for automotive ABS will exceed six million units, with an average annual growth rate exceeding 30% in the coming years. Despite the government’s efforts to enforce safety regulations, including mandatory installation of ABS systems, the actual implementation and supporting infrastructure still fall short of expectations. WABCO sees this as an opportunity to help both authorities and end-users adopt safer technologies while expanding its market presence. Meanwhile, some domestic ABS manufacturers face challenges in terms of technology, quality, and cost, leading many commercial vehicle producers to prefer foreign brands. Looking ahead, the push for energy-efficient and low-emission vehicles has become increasingly urgent. New energy vehicles not only address environmental concerns but also present new opportunities for the global automotive industry. For example, Freudenberg, a German company with significant investments in China, recently opened a new factory in Shanghai’s Qingpu district. With over 1.4 billion yuan invested in China, the company is expanding its operations across multiple sectors, including lubricants, Mold release agents, and shock absorber technology. Freudenberg is also focusing on future technologies, such as fuel cells. The company is working on R&D projects in collaboration with its German headquarters and teams in Japan and the U.S. When asked about their Chinese partner, Wen Hande, a representative of Freudenberg Group in China, cautiously mentioned Tongji University. This partnership makes sense given China’s ambitious plan for fuel cell vehicles: to introduce them during the 2008 Olympics, achieve mass production of 10,000 units by 2010, and reach 100,000 units by 2015. Clearly, the vast potential of the Chinese market continues to attract global players like Freudenberg, who are positioning themselves for long-term success.

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