ContiTech: Well Positioned to Take the Lead of Chinese Market

(Mr. Florian Schmidt-Bormann, General Manager of Automotive Aftermarket, Asia Pacific Region, ContiTech Power Transmission Group)

Gasgoo: Could you please introduce ContiTech’s automotive aftermarket product portfolio in Chinese market?

Bormann: ContiTech numbers among the leading suppliers of a host of technical elastomer products in the non-tire rubber sector and is a specialist for rubber technology in the non-tire rubber sector. We develop and produce functional parts, components and systems for the automotive industry and other important industries. With three decades of efforts in the Chinese market, ContiTech has achieved notable progress across its seven business units. The company reported total sales of €3.1 billion in 2010 and expected to reach €500 million by 2015 in Chinese market.

ContiTech supports customers in day-to-day work with a tailor-made program of excellent quality. On Automechanika Shanghai 2011 exhibition, ContiTech showcased new timing belt and water pump kits tailored for the Chinese automotive aftermarket as well as the TOOL BOX Asian Cars.

Notably, the new timing belt and water pump kits, which are newly added into our existing portfolio, is specifically designed for the Chinese automotive aftermarket. The drive belts contained in the kits meet OE quality standard, a major competitive edge that ContiTech enjoys over our rivals. The water pump kits additionally include a water pump that perfectly matches the other components.

Moreover, the TOOL BOX Asian Cars from ContiTech provides professional support in changing timing belts, specifically on Asian vehicles. It contains 26 mounting tools such as a setting gage for the camshaft, various setpins, locking pins and arrestors. The set furnishes what is needed to safely and professionally change timing belts on the most common Asian cars. It is conceived as an ideal complement to the TOOL BOX.

Gasgoo: How is ContiTech’s business performance in China automotive aftermarket?

Bormann: We have foreseen the huge potential in China automotive aftermarket as early as we first stepped into this market. As a result, we have been committed to the development and promotion of aftermarket products in China. In responding to the booming market and growing demand for customized solutions, ContiTech is accelerating business expansion by enriching our product portfolio and strengthening market position in China.

In addition to a reliable supply of cutting-edge products for our customers, ContiTech is dedicated to the rejuvenation of distribution network through improving distribution efficiency and after-sales service. Meanwhile, we are focusing on strengthening the ties with dealers and maintenance workshops, offering them a wide range of technical trainings for a better knowledge of ContiTech’s products and state-of-the-art technologies.

China is viewed as one of ContiTech's key markets in the coming decades. In order to consolidate our leading position in Asian automotive aftermarket, we will continue to expand investment in Asia market, particularly in China.

Gasgoo: Can you share with us your understanding of the Chinese automotive aftermarket, in comparison with the European market?

Bormann :The European automotive aftermarket is highly developed where ContiTech owns a comprehensive product lines. However, in China we have not yet to bring all product lines to the Chinese market.

In Europe, customers can have a more immediate access to our latest products and technologies via seminars arranged by our distributors and mechanical workshops. However in China, it takes a longer process for our products to be reached by workshops. Therefore, it is harder for us to contact directly with end-users.

In responding to these two challenges, we are encouraging our distributors to organize regularly communication events and services such as trainings and lectures where ContiTech will also render full assistance. We expect to lift our brand recognition among the Chinese customers via these events and thereby enhance brand image in China market.

Gasgoo: What do you think of the outlook of China automotive aftermarket?

Bormann :The Chinese automotive aftermarket is one of the most dynamic and promising markets in the world. The passenger vehicle components and parts market in China is projected to increase at an annual rate of 13.8 percent, reaching 50 billion RMB in 2010 while the growth rate will continue at the high level around 18.3 percent annually through 2014, driven by the country’s expanding and aging stock of passenger vehicles. Therefore, the aftermarket in China plays a pivotal role for the future growth of multinational corporations such as ContiTech.

Although the automotive aftermarket is less mature in China, we expect to see material changes in the next three to five years. We believe the scattered market is likely to experience consolidation in the coming years when some of the leading dealers, retailers and workshops may grow as automotive dealership groups like AutoNationGroup, UnitedAutoGroup and SonicAutomotive in the U.S.

ContiTech will continue to leverage our expertise and innovative ability in automotive aftermarket, providing the Chinese market with a broader range of products and solutions with high quality and state-of-the-art technology.

Gasgoo: ContiTech follows a duel-brand strategy in China market. Could you introduce the two brands and their respective positioning?

Bormann: Our products are sold in China under two brands—ContiTech and Roulunds, both are strong brands with different market positioning. ContiTech is a higher-end brand which we are promoting in the global market. Roulunds, an established brand with 275 years’ history, was acquired by ContiTech in 2006.

The two brands target different market segments with varied customer base and distribution network. ContiTech adopts a duel-brand strategy in China in order to profit optimally from the growth of the Chinese automotive aftermarket and to be able to respond as quickly as possible to local trends.

Gasgoo: Could you share with us your plans for the next three to five years?

Bormann: We will continue to extend our product portfolio to meet the growing requirements in this booming market and provide a broader range of tailored services for our customers. Meanwhile, we also plan to revitalize our distribution network and establish a healthy and sustainable relationship with our distributors.

Gasgoo: Could you please introduce ContiTech’s automotive aftermarket product portfolio in Chinese market?

Bormann: ContiTech numbers among the leading suppliers of a host of technical elastomer products in the non-tire rubber sector and is a specialist for rubber technology in the non-tire rubber sector. We develop and produce functional parts, components and systems for the automotive industry and other important industries. With three decades of efforts in the Chinese market, ContiTech has achieved notable progress across its seven business units. The company reported total sales of €3.1 billion in 2010 and expected to reach &e