Rail group gets China operations on track

Dieter Wilhelm, a member of Knorr-Bremse AG's executive board, who is responsible for the rail vehicle systems division, shares his thoughts about his company's growth in China.

What's your view about China's railway market in recent years and how is your business here?

Knorr-Bremse has maintained contacts in China since the end of the 1970s. In 2014, a workforce of more than 4,200 employees helped the Knorr-Bremse Group post sales of over 1.2 billion euros ($1.33 billion) in China. Initial approaches for business development and exports since the 1980s were followed by local market entry and then the expansion phase from 2000 on.

What is your most popular product in the China market? Is there any difference between Chinese clients' needs and those in other markets in the world?

By the end of 2015, 50 percent of the global high-speed train fleet will be operated in China.

Knorr-Bremse is a very strong and well-established participant in this market. China's high-speed railway network has exceeded about 16,000 kilometers. In 2020 it is expected to be longer than 20,000 km.

As you see, the distinguishing characteristic is the development speed in China - global high-speed traffic took 50 years, but China took less than 10 years to reach a comparable level. Therefore, Knorr-Bremse has to perform extraordinarily fast to satisfy the Chinese customers' demands.

In the past years, China's railway authority has had some changes. Have these changes affected Knorr-Bremse's operations in China?

Due to the dynamic behavior of China markets, we have established long-term strategic partnerships with business partners, customers and authorities.

High-quality standards of Knorr-Bremse in production and reliability as well as performance commitment are identical all over the world. This is being recognized by our customers in China no matter what changes at the authority level.

Knorr-Bremse already has some joint ventures in China. Do you plan to add more in the next three to five years?

Knorr-Bremse Rails' latest Chinese entity, the 11th, was set up in Guangdong province in May as an important base to cope with the market demand and requirement as well as develop the upcoming business. It is called Guangdong Knorr-Bremse Guo Tong Railway Vehicle Systems Equipment Co and is located in Jiangmen.

Knorr-Bremse continuously pursues the strategy of responding to the challenges of competition, finding the optimum position in the market and reacting to changes in the market environment. This is why we permanently examine ways of fine-tuning our portfolio of products and services, as well as our organizational structure, to meet market and customer requirements.

How is the operation of Knorr - Bremse's current joint ventures in China?

Including joint ventures, Knorr-Bremse operates 13 production plants in the country for both group divisions of rail and commercial vehicles, and the number will soon become 14.

The Knorr-Bremse Group has been proactively implementing the localization policy ranging from personnel training to a wide degree of local production. The Knorr-Bremse Group is also active in onboard systems in China. We established joint ventures for train door and train heating, ventilating and air conditioning some years ago, one located in Qingdao, Shandong province, and one located in Wuxi, Jiangsu province.

Have you met any challenges in operating and developing the business in China?

The China market is very dynamic. The railway market development is extremely rapid and huge. Knorr-Bremse always encounters challenges and we find solutions to overcome them. We hope to participate strongly and in a long-term way in this development.

(China Daily 10/29/2015 page14)