Knorr-Bremse Commercial Vehicle Systems deepens localization in China

Knorr-Bremse Commercial Vehicle Systems is revving up localization efforts to equip Chinese truckmakers to better explore local and overseas markets.

The German company started production in China 20 years ago, and has since introduced many mature technologies, including braking systems, said Xu Baoping, chairman of the board of directors at Knorr-Bremse Asia Pacific.

He said that Chinese trucks are now almost equal technologically to those in the western countries, adding that Knorr-Bremse Commercial Vehicle Systems has been facilitating the efforts of those truckmakers to make foray into overseas markets.

Xu made the remarks in an interview last week when the company's newest plant came into operation in Dalian, Liaoning province.

Covering 40,000 square meters, the state-of-the-art facility can produce up to 1 million air compressors, 1 million dampers and 700,000 disc brakes a year.

It was in the very coastal city of Dalian where Knorr-Bremse Commercial Vehicle Systems first started local production 20 years ago.

The company's first China-made product was dampers, said Juergen Steinberger, chairman of the management board of Knorr-Bremse Commercial Vehicle Systems.

"Now we have the complete product portfolio here and not only to a degree that we are just importing it to China," said Steinberger, who also serves as the company's chief technology officer.

"We have a big R&D team here that is doing its own development for many products solely for China and for some of the products as an adaption to China, to the Chinese market."

Steinberger said there is a growing interest in China-made trucks in overseas markets including Southern Europe, and the company is helping Chinese truckmakers to win orders with its products and reputation earned over the past century.

"If you have a braking system that doesn't work, that is a major problem and it would also be a major problem of recommendation and reputation," he said.

With its local production and R&D efforts, the company has also developed a very solid supply base in the country for its products sold locally and in overseas markets.

"We are sourcing a significant amount in China and not only for the Chinese market, but also for the European market, for the North American market, especially for the European market."

"The Chinese tier-one and tier-two manufacturers are really good. They have improved significantly over the last 20 years, so it's incredible to see how technology has developed here in China," he said.

Based on its success over the past two decades in China, Knorr-Bremse Commercial Vehicle Systems is confident in its prospects in the country.

"The China market has always been very important for Knorr-Bremse Commercial Vehicle Systems...For sure, we are continuing expanding our footprint in China, either by building up our own facilities or through partnerships," said Xu.

Yet the blueprint will be more than simple localization considering the fast-evolving market and the solid infrastructure in the country, among other things.

China will be the first place for many of Knorr-Bremse Commercial Vehicle Systems' new ideas and products to be used, although they may arise outside of the country, said Xu.

"So you have the global platform, the best global technology, but you make the first application in China. I think that's how I can envision what we want in the next 20 years," he said.