Reference Message Network reported on April 30 according to a report on April 27 on the website of Germany's Frankfurter Allgemeine Zeitung, automotive parts supplier ZF is in the midst of a tariff storm. CEO Holger Klein explained why he hopes to become more dependent on China.

Reporter asked: Mr. Klein, we are now at the Shanghai Auto Show, what impact do tariffs have?

Holger Klein replied: Tariffs have had a significant impact on the entire automotive industry. ZF has hardly shipped anything from China to the United States. What worries me most is how the already weak car market will develop due to expected price increases.

Asked: The German auto industry is facing huge pressure in China. Chinese companies are also building their own supply channels. Have you lost market share as a result?

Replied: Our advantage lies in being able to serve a wide range of customers. The share of our business with Chinese auto brands is constantly increasing.

Asked: What percentage is that?

Replied: Fifty percent of our business in China is done with Chinese manufacturers, and this proportion continues to grow. At this exhibition, we showcased the next step in chassis development toward "software-defined vehicles." NIO, one of our clients, displayed the ET9, China's first mass-produced vehicle equipped with a steer-by-wire system. Complete localization must be achieved in China to meet market requirements for cost and speed. Competition is fierce and demanding. China is our gym: you must work hard to improve yourself, and if you're in good shape here, you can also be competitive in other markets.

Asked: Are Chinese automotive parts suppliers expanding in scale?

Replied: Absolutely. They are making efforts to advance. But we are growing in China as well.

Asked: How fast?

Replied: Roughly in line with market growth, which is around 5% to 6%.

Asked: Does this mean the share of your Chinese business in your overall business is increasing? Is this intentional?

Replied: This reflects market trends. Our share in the Asia-Pacific region must continue to increase. We are consciously increasing our share in China.

Asked: Some people talk about the paradox of "de-risking." Policymakers worry that Germany is too dependent on China. Companies like yours say that business share in China must increase. These two ideas don't match.

Replied: I basically agree with your view. But what dependencies must we tolerate to make the transition to transportation successful? If we want to drive electric vehicles, we need certain raw materials, such as rare earths, which mainly come from China. Without China, things would be very difficult. Moreover, China is one of the largest markets in the world.

Asked: Many German businesspeople in China are skeptical of Germany's geopolitical positioning and its transatlantic orientation, especially because China is rapidly advancing technologically. Do you agree with this assessment?

Replied: For ZF, both Western and Eastern markets are important. Market trends show that China is a key market in terms of innovation and quantity. If we are not present here, it will be fatal. We must prepare for this: new competitors will emerge here, and we will encounter them again in other parts of the world. We look globally.

(Translated by Nie Lihao)

This photo was taken at the Berlin International Rail Technology Expo on September 26, showing the ZF exhibit area in Germany (Photo by Che Yunlong)

Original article: https://www.toutiao.com/article/7498920275392660009/

Disclaimer: The article only represents the author's personal views. Please express your attitude by clicking the "Like" or "Dislike" button below.