Schmitz Cargobull, Germany’s largest trailer manufacturer, has opened a new facility in Wuhan, China, and is now producing trailers there in a $120 million investment.
"We are exactly on schedule," says Board Member Andreas Schmitz. He had been in China since the middle of 2013, coordinating setting up the production line, selecting the suppliers and the personnel management. "We will have approximately 250 employees in Wuhan by the end of the year."
When it reaches full capacity, up to 40,000 units per year can be manufactured at the plant in Wuhan.
The new plant is part of a collaborative effort with Dongfeng Motor Group, one of China’s largest manufacturers. Dongfeng is headquartered in Wuhan, a city of 8 million with a developing automotive-related manufacturing zone. More and more automotive companies are establishing sites in Wuhan, Schmitz says, as a result of its favorable location between Shanghai, Beijing and Hong Kong.
"We are using Chinese suppliers and, in some cases, suppliers whom we also work with in Germany," reports Schmitz.
The new structure was completed at the end of June, and production began ramping up in September. Employment is approximately 250 people, including four employees from Germany who are now permanent members of the management team in Wuhan. In addition, Chinese managers are also being trained for the management team.
The employees in China receive similar training to their colleagues in Europe to prepare them for their new roles. Before the start of production in particular, intensive training covered the entire value chain from sales to development and order processing to production. In the process, Chinese employees have received several weeks of training in Germany. In addition, the core German team underwent several phases of intercultural training.
A number of competitors from Europe and the United States have announced plans to expand into China, Schmitz says.
"From our own experience, we know that entering the market requires a long period of preparation," Schmitz says. “The management intends to use the several-year head start to expand the market share.”