Skip to content

A JV to crack the Chinese market

A JV to crack the Chinese market
Technology
Technology:Automotive clamping systems
Market
Market:China
Targets
Targets:OEMs/tiers making engine, exhaust, and turbochargers
Result
Result:Multi-million $ supply deals and commercial framework for China JV

Teconnex came to us to make more headway in selling its customised, heavy-duty steel clamping products to automotive and off-highway OEMs and tier-1s in China.

Before this, the firm could only secure several one-off orders with Chinese branches of its global customers. They’d also visited several Chinese automotive events, meeting dozens of companies who’d said they “were interested in learning more.”

Challenges 

But Teconnex was unable to fully grasp the key players and extent of opportunities in China. And there were other significant challenges including culture, time zone and language.

So the company appointed us to analyse the true potential of the market and advise on what it would take to sell its products on a more comprehensive basis in the country.

We spent the first three months engaging decision makers at 48 of Teconnex’s potential customers. Through this process, we uncovered the potential for $20 million of Chinese sales. But we also learnt that, to be considered a suitable supplier by these prospective customers, Teconnex would need to localise its manufacturing. 

Joint venture 

Given the scale of the opportunity, Teconnex agreed they were open to localising production, so we conducted a ‘deep dive’ into various options – from a joint venture to a WFOE (wholly foreign owned enterprise) and competitor acquisition – analysing the benefits, risks and challenges of each.

We concluded a JV would be the best way forward, and benchmarked several partner candidates. We recommended Funwick Group, based in Kunshan in the suburbs of Shanghai, and led the negotiations with the Chinese company. [get photo of signing ceremony??]

Once the JV was official, we helped to screen and hire a General Manager and leadership team for the new enterprise. We also attend its board meetings as an advisor to Teconnex.

Long-term sales 

In parallel to the JV negotiations, we secured several long-term orders for the company on the promise that manufacturing would take place in China.

And to-date, we’ve won more than $20 million in sales from companies including Mitsubishi, Faurecia, Cummins, BorgWarner, Bosch-Mahle, Tenneco and Agco.

While some home-grown Chinese brands such as Vofon Turbochargers and Wuxi Weifu are amongst these new customers, many of the largest are the Chinese or APAC HQs of multinational corporations. Dealing with such multinationals has had a unique set of challenges, and there have always been tough negotiations around local pricing - even where global pricing agreements were already in place!  But significant orders have almost always resulted.

Japanese market 

More recently, we’ve been appointed to run a similar sales programme for Teconnex in Japan.

As a result, Teconnex has made considerable headway in Japan and is today serving corporations including Toyota Tsusho, Kawasaki, IHI, Komatsu, Kubota, and Sango -- in many cases supplying directly from its Chinese production facilities in Kunshan.

We use cookies to give you the best experience of using this website. By continuing to use this site, you accept our use of cookies. Please read our Cookie Policy for more information.