China and Webasto have a long history: 20 years ago, the automotive supplier, which manufactures, among other things, car roofs and charging boxes for electric 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 in early 2020, the company in Stockdorf near Munich suddenly rose to fame overnight: a Chinese colleague who was visiting the headquarters was infected before leaving for Germany. Along with this, the virus had also arrived here. 20 years in China – it’s time to take stock with Webasto boss Holger Engelmann and purchasing manager Yanni von Roy-Jiang.
SZ: Mr. Engelmann, today you have eleven locations in China, which is Webasto’s largest market. It all started 20 years ago. Why China
Holger Engelmann: Today we are very happy to have entered the Chinese market early. It was a conscious decision because the big car manufacturers went there too. At one point, Chinese manufacturers also became customers. Our sales of over € 1 billion there represented 40% of our total sales last year.
Is doing business in China more profitable than in Europe or the United States?
Engelmann: Yes, it is. But I don’t want to give you numbers, but our activity in China has allowed us to make a lot of investments in recent years, including in Germany.
Either way, 40 percent of sales is a lot. Don’t you make yourself dependent on China?
Engelmann: Webasto has a large global base and is represented in all important automotive markets. We have a high proportion of China, that’s correct. But we are also represented in Korea, India and Japan, so our Asian share is disproportionately high compared to other suppliers who have focused more on Europe and the United States.
How many factories do you have in Germany?
Engelmann: Five. But they are much smaller than the factories in China.
Isn’t Webasto already a Chinese company by then?
Engelmann: Let me sum it up this way: we are an international company with a very strong Asian concentration. The center of our development work is still in Germany.
Did you know from the start how big it would be?
Engelmann: No. It surprised everyone. China was on a par with India 20 years ago, and the auto market and the demand for roofs suddenly went up very sharply, and we’ve grown with it. And will continue to do so, especially if Chinese automakers go international as well.
Mrs von Roy-Jiang, you are the main buyer of Webasto, you have been with the company for twelve years, you are from China and as CFO in China you saw years ago how the country has developed rapidly. How did a German company like Webasto become so strong there?
Yanni von Roy-Jiang: I think it’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 think the Germans and the Chinese go very well together anyway. Incidentally, this is also due to the fact that the Chinese are very flexible.
More flexible than the Germans?
Roy-Jiang: Yes, yes. Colleagues in China perceive every change as positive. If you want to try something new as a business, there is rarely a negative reaction. You try it first and see how it works.
Open detailed view
Webasto employees at the Wuhan plant. Chief buyer Roy-Jiang said that “colleagues in China view every change positively.” The Germans are sometimes too slow.
(Photo: Andreas Rinke / Reuters)
And what are the Germans doing wrong?
Roy-Jiang: What is not so well received in China is too much theoretical discussion. You get things done there faster and adapt when mistakes are made.
And if the German bosses want to prescribe something, are there any problems?
Roy-Jiang: Of course you can try it that way. If you dictate how something is to be 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 all of this mean for a boss?
Engelmann: The key is diverse teams, people from different backgrounds and experiences. A purely Chinese or German-dominated occupation does not work on its own. The Germans are more structured, but sometimes too slow. When you combine this with the Chinese work culture, you get the perfect blend. And, in my experience, the cultural differences are not as great as is often assumed.
But it’s hard to imagine you’ve never had any problems. For example on the subject of intellectual property.
Engelmann: There is only one way out: you have to be quick. As soon as someone copies something from you, you need to prepare for the next innovations. Whoever stops will be caught. So far, we haven’t had any major issues with the topic in China. And it’s not enough to copy a product, but rather: can you do it four million times with the same quality?
Is Webasto seen 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 concentration.
Have you ever received takeover bids from Chinese investors?
Engelmann: In good companies, there is always desire (laughs), it must be said clearly. And there was certainly also an interest in creating a joint venture with us. But we said we would prefer to remain independent.
This is perhaps not at all wrong at a time when there is talk of a new cold war between the United States and China. How should a company like Webasto position itself there?
Engelmann: Global free trade is the best for everyone’s prosperity, and that falls apart when global trade is restricted. A globalized industry with globally interconnected production and supply chains needs open markets.
Xi Jinping certainly wouldn’t contradict that. Except that the Chinese president, who is currently building a new Silk Road and securing spheres of influence everywhere, may define global free trade differently from the boss of Webasto.
Engelmann: Webasto is already strongly positioned regionally in the world, and this also applies to China. But we must be prepared for the fact that in the future everything will be a little 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 is a great strategic task.
You would roll 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 policy, should therefore do everything possible to avoid an extreme conflict between China and the United States.
Presumably, the pressure on Europe and Germany to make a decision will increase.
Engelmann: It would be a very difficult decision. We have very strong trade relations with China and the United States. It is important to have a uniform and strong European position vis-à-vis the two countries.
And yet, US President Joe Biden may one day ask you, “Which side are you on?”
Engelmann: Ultimately, we have to represent our own interests, neither Washington nor Beijing. There cannot be “black or white” here. We are all too dependent on each other for this. And we have to accept that things can be seen differently in other parts of the world than in Europe.
Should we accept that hundreds of thousands of people in the Chinese province of Xinjiang are detained in re-education camps because they belong to the Uyghur minority? Should we accept if China threatens Taiwan?
Engelmann: I am not a politician. As Webasto, we can only see that we live our own values in China – and we do. I think a calm but very precise strategy, as the Chancellor has 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 a lot of raw materials and tiny components in the components that we get. Understanding where exactly this or that material comes from is incredibly difficult. Sustainability – also from a social point of view – is of great importance to us as a traditional family business. 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 between Europe and China. How can the problems be solved?
Roy-Jiang: The Chinese I know have a very positive attitude towards the Germans and the Europeans. The role that Germany and the German economy can play as foreign policy mediators should therefore not be underestimated. It’s like in everyday work: we shouldn’t discuss the differences too theoretically, but should approach things specifically as much as possible.
Is it even possible to tackle the problems concretely?
Engelmann: Very good. When dealing with authorities and colleagues there, I can speak to them openly. However, you need to do it in a way that others wouldn’t perceive as hurtful because of their culture.
Yanni du Roy-Jiang, 41, has worked 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 at the head of the automotive supplier since 2013. He has been with the company since 2007.