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Higher car sales benefit ATM maker

By Zheng Lifei (China Daily)
Updated: 2009-09-14 07:38

Yang Dehong

Wincor Nixdorf, one of the world's leading automated teller machine (ATM) makers, is expanding into China's retail gas station markets to capitalize on the country's fast-growing car ownership rate.

The German company, already one of the top three ATM vendors in China, is banking on booming car sales to drive growth in one of its rapidly developing retail segments in addition to its strong ATM business in the country.

"The increase in car ownership in the country will definitely give a boost to gas station network expansion and upgrading," said Yang Dehong, general manager of the retail division of Wincor Nixdorf China.

China's passenger cars sales in August increased 90.18 percent from a year earlier, according to the China Association of Automobile Manufacturers.

During the first eight months, 6.23 million passenger cars were sold in the country, almost matching the 6.76 million units sold in the whole of 2008, the industry association reported.

The gas station network will expand as car ownership expands, Yang said.

"They will become integrated service stations, where customers can not only refuel but also run other errands such as buying things in a convenience store and having meals at the station," Yang said.

China had 93,879 gas stations by the end of 2006, according to the research firm China Investment Consulting.

"But China's gas stations are just starting to embark on that evolution, which means big business potential for players like us," Yang said.

The German company recently signed a deal with China National Offshore Oil Corp (CNOOC), China's top offshore oil and gas producer, to provide the latter with a full set of hardware and software at more than 500 premium service stations across the country. The oil company is planning to build the stations in the next few years.

Under the deal, Wincor Nixdorf will provide its Beetle iSprint point of sale (POS) and i-SERVICE STATION solutions to optimize processes and drive new revenue streams at CNOOC service stations.

Those service stations also will feature multiple fuel pumps and convenience stores, said Xu Hongliu, head of the service stations division for Wincor Nixdorf China.

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"Gas stations in China are now beginning to realize that the gross margin for just selling fuel is getting thinner, so they have to find new revenue streams from non-fuel business," Xu said.

Setting up convenience stores at service stations is one of the new trends among gas station operators seeking ways to drive new profit growth, Xu said.

"But running the store is not as easy as running the pump. The operator will deal with more merchandise and inventory management issues," Xu said.

Wincor Nixdorf's NAMOS retail, another major component of i-SERVICE STATION, will also be installed at the service stations.

This equipment will allow station operators to manage petroleum and convenience store network responsibilities such as merchandise management, stock orders, inventory control and vendor management, Xu said.

Wincor Nixdorf has a wholly owned subsidiary in its home country of Germany that is dedicated to the gas station business.

"We hope to introduce our 30 years of expertise in the service station field to China, as we see the time is now ripe," Yang said.

Wincor Nixdorf landed its first client in China in the gas station segment in 2006, when it was awarded a contract to provide service station solutions to a joint venture between China's leading chemical and oil company, Sinochem Group, and French oil giant Total.

So far, about 100 gas stations operated by the Sinochem and Total joint venture in the country use Wincor Nixdorf equipment and services.

Wincor Nixdorf also provides hardware equipment to gas stations operated by the country's other two leading oil companies, PetroChina and Sinopec.

In the retail segment, Yang said Wincor Nixdorf would offer innovative products such as interactive kiosk terminals and self-service ticket vending machines to drive its growth in China.

"But the gas station business is one of the emerging retail segments we have identified in China that boasts great potential," Yang said.