China and Webasto, that’s a long story: 20 years ago, the automotive supplier, which among other things builds car roofs and charging boxes for e-cars, opened its first factory in Shanghai. The Bavarians now have eleven locations in China – the largest of them in Wuhan. When the first Covid 19 patient was reported in Bavaria at the beginning of 2020, the company from Stockdorf near Munich suddenly became famous overnight: A colleague from China who was visiting the headquarters was infected before leaving for Germany . With that, the virus had arrived here as well. 20 years in China – time to take stock with Webasto boss Holger Engelmann and purchasing manager Yanni von Roy-Jiang.
SZ: Mr. Engelmann, you have eleven locations in China today, which is Webasto’s largest market. It all started 20 years ago. Why china
Holger Engelmann: Today we are very happy that we entered the Chinese market early. It was a conscious decision because the big automakers went there too. At some point, Chinese manufacturers also came along as customers. The over one billion euros in sales that we make there accounted for 40 percent of our total sales last year.
Is business in China more profitable than in Europe or the US?
Engelmann: Yes that’s it. But I don’t want to give you any figures, but our China business has enabled us to make a lot of investments in recent years, including in Germany.
In any case, 40 percent of sales is a lot. Don’t you make yourself dependent on China?
Engelmann: Webasto has a broad base worldwide and is represented in all important automotive markets. We have a high proportion of China, that is correct. But we are also represented in Korea, India and Japan, so that our Asian share is disproportionately high compared to other suppliers who have concentrated more on Europe and the USA.
How many plants do you have in Germany?
Engelmann: Five. But they are much smaller than the plants in China.
Isn’t Webasto already a Chinese company by then?
Engelmann: Let me sum it up like this: We are an international company with a very strong Asian focus. However, the center of our development work is still in Germany.
Did you know from the start how big it was going to be?
Engelmann: No. That surprised everyone. China was on a par with India 20 years ago, and the automobile market and the demand for roofs suddenly grew very strongly, and we grew with it. And will continue to do so, especially if Chinese automakers are now also becoming more international.
Ms. von Roy-Jiang, you are Webasto’s chief buyer, you have been with the company for twelve years, you are a native of China and years ago as CFO in China you saw how rapidly the country has developed. How did a German company like Webasto get so strong there?
Yanni von Roy-Jiang: I think that’s because you have to talk to the Chinese on an equal footing, and we’ve always done it that way. Respect is important – and listening. I believe that Germans and Chinese go very well together anyway. Incidentally, this is also due to the fact that the Chinese are very flexible.
More flexible than Germans?
Roy-Jiang: Well, yes. The colleagues in China perceive every change as positive. If you want to try something new as a company, there are seldom negative reactions. You try it first and see how it works.
And what are the Germans doing wrong?
Roy-Jiang: What is not so well received in China are too many theoretical discussions. You implement things there faster and adjust when mistakes are made.
And if German bosses want to prescribe something, are there problems?
Roy-Jiang: Of course you can try it that way. If you dictate how something is done, then in the end it will be done that way. But in doing so you are pushing back the creativity and initiative of your colleagues, which is necessary in our dynamic industry.
What does it all mean for a boss?
Engelmann: The key are diverse teams, people with different origins and experiences. A purely Chinese or dominantly German occupation alone does not work. Germans are more structured, but sometimes too slow. When you combine that with the Chinese work culture, you get the ideal mix. And, in my experience, the cultural differences are not as big as one often assumes.
But it’s hard to imagine that you never had problems. For example on the subject of intellectual property.
Engelmann: There is only one way out: you have to be quick. The moment someone copies something from you, you need to have the next innovations ready. Whoever stops will be caught up. So far we have not had any major problems with the topic in China. And it is not enough to copy a product, but rather: Can you do it four million times with the same quality?
Is Webasto perceived as a German or Chinese company in your country?
Roy-Jiang: As a German company, of course. As a German company with a strong Chinese focus.
Have you ever received takeover bids from Chinese investors?
Engelmann: In good companies there is always desires (laughs), I have to be clear about that. And there was certainly also interest in setting up a joint venture with us. But we have stated that we would prefer to remain independent.
That is perhaps not at all wrong at a time when there is talk of a new Cold War between the USA and China. How does a company like Webasto have to position itself there?
Engelmann: Free world trade is best for the prosperity of all, and this decreases when world trade is restricted. A globalized industry with globally interlinked production and supply chains needs open markets.
Xi Jinping would certainly not contradict that. Except that the Chinese President, who is currently building a new Silk Road and securing spheres of influence everywhere, may define free world trade differently than the Webasto boss.
Engelmann: Webasto is already strongly regionally positioned worldwide, this also applies to China. But we have to be prepared for the fact that in the future everything will be a bit more delimited: European area, Chinese area, American area. We must be able to work more independently in the regions and produce and also buy more in the region for the region. It’s a big strategic task.
You would turn back globalization, that doesn’t sound trivial.
Engelmann: We see this danger, and Germany in particular is in a difficult position. The European Union, and with it German politics, should therefore do everything possible to prevent an extreme conflict between China and the USA.
Presumably, the pressure on Europe and Germany to make a decision will increase.
Engelmann: But that would be a very difficult decision. We have very strong trade relationships with both China and the USA. It is important to have a uniform, strong European position vis-à-vis both countries.
And yet US President Joe Biden might ask you one day: “Which side are you on?”
Engelmann: In the end we have to represent our own interests, neither the Washington nor the Beijing. There can be no “black or white” here. We are all too dependent on one another for that. And we have to accept that things may be seen differently in other regions of the world than in Europe.
Do we have to accept that hundreds of thousands of people in the Chinese province of Xinjiang are being held in re-education camps because they are members of the Uyghur minority? Do we have to accept if China threatens Taiwan?
Engelmann: I am not a politician. We as Webasto can only see that we live our own values in China – and we do. I believe that a calm but very specific strategy, as the Chancellor used in the past, can be very helpful.
What do you do when your local suppliers violate human rights by using forced labor?
Engelmann: There are many raw materials and tiny components in the components we get. To understand where exactly this or that material is coming from is incredibly difficult. Sustainability – also from a social point of view – is of great importance to us as a traditional family company. We place high demands on our suppliers and carefully check what we can influence. However, there will never be one hundred percent security.
You travel a lot back and forth between Europe and China. How can the problems be solved?
Roy-Jiang: The Chinese I know have a very positive attitude towards Germans and Europeans. We should therefore not underestimate the role that Germany and the German economy can play as a mediator in foreign policy. It’s like in everyday job: We shouldn’t discuss the differences too theoretically, but have to address things specifically wherever possible.
Is it even possible to address issues concretely?
Engelmann: Very well. When I have to do with authorities and colleagues there, I can talk to them openly. However, you have to do it in a way that others would not perceive as hurtful because of their culture.
Yanni von Roy-Jiang, 41, has been working for Webasto for twelve years. Among other things, she was CFO of the company in China from 2011 to 2014. Holger Engelmann, born in Krefeld in 1965, has been the head of the auto supplier since 2013. He has been with the company since 2007.