Traveling through Shanghai in a minibus

China is one of the most important markets for the Dürr Group. In November, CEO Dr. Jochen Weyrauch and the Group management team spent nearly two weeks traveling through the country to explore its rapid transformation and develop new business models. The group gained some exciting insights. 

The large windows of the bus offer an excellent vantage point for observing the vehicles on the road. “A few years ago, you would mostly see Western and Japanese car brands here,” says Weyrauch. Today, Chinese manufacturers also shape the landscape. One example is the Avatr brand. It belongs to a joint venture between the Chinese car manufacturers Changan and Nio. The technology corporation Huawei and the battery manufacturer CATL are also on board. With over 500 horsepower, the top-of-the-range model is designed to cover up to 700 kilometers on electric power and with a high degree of autonomy. The interior features premium leather instead of plain plastic. And all of this for a price of 50,000 euros from new. Aboard the Dürr minibus there are many managers who know a thing or two about car production costs. A lively discussion immediately ensues.

At 8:30am, the bus stops at the HOMAG company yard in Shanghai. The tour of the sites will follow the same pattern over the next few days. It will start with a visit to the production facilities, followed by discussions with local management and employees on site. 

The manufacturer of woodworking machinery is producing less than usual at the moment. The management discusses the reasons for this in the early evening with a consultant and investment banker who has lived in China for a long time. The Board of Management has invited him as an expert to hear his analysis of the transformation in China and of the current situation. 

The Chinese economy continues to grow, albeit not at the same pace as before the pandemic. According to the expert, companies that have good ideas and produce quickly and cheaply still stand a strong chance of continuing to be successful. He believes that the state does not aim to push Western companies out of the market, but rather to encourage competition and innovation. This becomes evident at the other Group locations. Some of them produce so much that logistics space is becoming scarce. 

But isn’t China said to subsidize its key industries, enabling it to offer many products at lower prices than foreign competitors? Weyrauch does not dismiss this, but he also acknowledges the other side. When talking to people on the ground, he repeatedly finds that they have a different perspective on the issue. “It appears that, in China, the EU's agricultural policy, for example, is viewed with skepticism, as it is thought to complicate access to the internal market.” 

It also becomes clear during dinner at the restaurant just how much the country is changing. Dumplings, pieces of meat and fish, and spicy vegetables are served at a traditional round table with a rotating platter. This is served with red wine — not from Europe, South Africa, or Australia, but from China. “For me, as a wine lover from one of Germany’s top wine-producing regions, I found tasting these Chinese wines an exciting experience,” says Weyrauch. Vineyards with Cabernet Sauvignon, Merlot, or Pinot Noir are no longer a rarity in the People's Republic. On the contrary: When it comes to the size of the wine-growing area, China is now on a par with France. Wine consumption has also increased significantly over the past 20 years. 

This transformation breeds confidence. According to Weyrauch, anyone who meets Chinese businesspeople quickly notices how self-confident they are. They are proud of what they and their country have achieved over the past decades. 

This becomes evident during a visit to Dürr Paintshop Systems in Shanghai. The agenda includes an employee meeting on-site. The employees gather in large numbers in the canteen, with even more following the meeting online. Using an interactive app, they type questions into their smartphones that appear on a large screen in the canteen. 

One of them wants to know what effects the reorganization of Dürr’s paint shop business will have locally. Someone else asks whether it involves transfers. Or what impact a possible trade conflict after Donald Trump’s election might have on Dürr in China. The employees are eager to hear answers straight from the Board of Management.

For people in China, it is very important to work for a successful company. Growth is considered attractive by employees, as it secures jobs. This can be observed during a visit to BBS Automation. The Chinese business of the Group’s young automation subsidiary is growing rapidly. “When we walked across the campus in the evening, most of the offices were still occupied,” says Weyrauch. Overtime is paid, of course. If someone leaves the office very late, they can call a taxi at the company's expense.

In the late evening, the multi-lane roads in the region usually allow for smooth travel. During the day, the train is a better option. This also applies to the CEO, whose plan for the next day is to visit customers in the industrial metropolis of Hefei, 500 kilometers away. The high-speed train arrives on time, and not a second late. In first class, there are comfortable seats that can be turned to face the direction of travel. Internet is no issue — the WiFi on board works perfectly. 

Digital technology is really important in China. The fancier, the better. On the train, there are people everywhere engaged with new apps on their smartphones. “I also like to download new apps at home and try them out,” says Weyrauch. He finds it interesting to see how tech-savvy the Chinese are and how creative the apps are. 

Shaking your smartphone allows you to find random contacts nearby. If you scan your face in a fast-food restaurant, you will be offered a dish tailored to your gender, age, and mood. Vehicles greet their drivers with a friendly “Hello” as they enter, projecting the word as a hologram onto the windshield. 

So how do machines and systems from a German company need to be designed to sell in China? What do they need to feature, aside from technical gimmicks? These questions are on Weyrauch's mind during his customer visits — for example, during a business dinner with the electric car manufacturer Nio. How does its board of management view Europe? “They still appreciate technology from Germany, but they have the impression that we’re getting bogged down in red tape and therefore becoming too slow," says Weyrauch. The picture becomes clearer with every conversation. Cars, machines, and systems developed in China are getting better and better and are cost-effective. Foreign companies that want to succeed in China must be able to keep up. One requirement for this is to have a strong local presence in order to listen to customers, recognize trends, and remain competitive. The Dürr Group has focused on this approach for a long time.

Before the return flight at the gate in Pudong, the CEO sums up his trip to China: “Traditional engineering solutions that strive for perfection will not get us very far here in the long run.” European companies should strengthen research and development locally and give their Chinese subsidiaries more freedom to do so. After all, they understand better what matters in their home market. This also helps foster stronger relationships with customers in China. 

As the plane takes off, Shanghai disappears into the autumn haze. Clouds envelop the aircraft. Weyrauch briefly closes his eyes — there is a lot to do in Germany.