The 18th edition of Automechanika Shanghai – a show focused on the aftermarket side of the industry, but increasingly leaning towards more OE and emerging tech – was held last month.
Fuel systems and aftermarket parts supplier Phinia was among the exhibitors there. In an interview with Just Auto, Kevin Price, Global brand communication director, Phinia Inc, highlighted the opportunities – from an aftermarket perspective.
JA: Why did Phinia exhibit at Automechanika Shanghai? What’s the nature of the opportunity you are targeting?
KP: This is the first time we had been to Automechanika in about four years. Phinia is a spin-off of BorgWarner for the fuel systems and aftermarket side of the business. BorgWarner’s charging forward strategy is focused on developing their product portfolio, mainly targeting the EV market.
The fuel systems and aftermarket business are more focused on internal combustion, so our strategies somewhat diverge. The decision was made by BorgWarner management to merge our fuel systems and aftermarket divisions and spin them off into an independent business. That’s what formed Phinia.
We are a USD3.4bn (2022) turnover business and that’s both OE and aftermarket business.
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On the fuel systems side, we sell fuel injection and fuel delivery modules; ECUs to major vehicle manufacturers, primarily in the commercial vehicle sector. Additionally, our aftermarket business caters to a significant amount of commercial vehicle business as well as propulsion agnostics, regardless of the propulsion system – be it EV, hybrid, gasoline, or diesel.
We offer products such as braking, steering and suspension, which now constitute a single business unit.
There is a strong relationship between OE and the aftermarket, providing us with strength. This marks our first event as a new independent company.
While the booth was highly Phinia-branded, we also aimed to emphasise our go-to-market brands (Delphi, Delco Remy and Hartridge). We want to give our customers confidence of continuity – so our message is: yes, we are a new independent business, but our go-to-market brands remain strong and continue to represent us. They serve as our key link back to our customers, strengthening our relationships, while also being part of a larger organisation that can support that.
We chose to participate in Automechanika Shanghai as the initial platform for several reasons. Firstly, the timing was particularly good, and this market is crucial for our growth strategy. It is essential that we engage with customers in these markets. It’s not just the Chinese market; there are also Indian, Korean, and Oceania customers, making it an excellent hub for our customer contacts, and this segment is performing exceptionally well for us.
Furthermore, it is a key component of our forward strategy. We have manufacturing plants here, so it’s not solely aftermarket; some of our OE business is also based here. This market offers many opportunities, making the show an ideal launch platform for our new corporate brand.
The Chinese commercial vehicle (CV) market is particularly important?
Yes. Most of our business is actually focused on the CV market, which means there has been great growth for us here. Our business has grown with the rise in GDP of the country over a long period, so it’s being doing very well. The market in China, as we see it, has grown both on the CV and passenger car (PC) side. It’s been growing where other markets have been slowing down, making it a really strong business growth area in general, not just for us and our products.
And e-mobility is advancing quickly in China, more rapidly than elsewhere – so that provides early aftermarket business insights for EVs?
Yes, it does.
One thing that is slightly different about the China market is the rapid proliferation of EVs over the past two years, even though that is more on the PC side. From an aftermarket perspective, it’s going to provide real insight into how that develops across different markets later on.
The China market is certainly one to keep an eye on, to observe how it develops and how the service industry looks from an aftermarket perspective.
I think the aftermarket in China is still quite young; the vehicle park is young. In contrast, across Europe, the average age of a vehicle is about 10-12 years, whereas it’s very much younger here, indicating that it’s not quite developed yet. This means that all these vehicles still under warranty or relatively new haven’t necessarily entered the service phase that the aftermarket is going to capture.
We are just at that tipping point, so it’s a very exciting time to be in this market. It’s important to be out in front of customers and to really understand what they need from us as a Tier-1 supplier to service the vehicles that are just beginning to appear in the workshops.
The show was busy – I was quite surprised by just how busy it was. It is the first time I have been to the show personally. I believe that the individuals we were meeting, the workshops, and the customers are genuinely interested in all aspects of technology offerings and service applications. There is a thirst for training, knowledge, and understanding, perhaps due to the ongoing transition to EVs and other emerging advanced technologies.
People also want to discuss alternative fuels, such as hydrogen and other sustainability options. While EVs have been a hot topic for a number of years, there is also much interest in alternative fuels – such as hydrogen – which aren’t just about current battery/electric tech. I think there is a thirst for knowledge about these because perhaps people are not familiar with them.
As the market for these fuels is still in an early phase, people are eager to ensure they have the necessary knowledge and technology to move forward. I’ve been really impressed by the engagement at the show and there is a genuine appetite for information.
Other snapshots from Automechanika Shanghai 2023:
- In terms of participation, the turnout of visitors at the Shanghai fairground broke an all-time record set at the previous 15th edition, growing by 16% to reach a total of 185,284.
- Ms Li Zhang, General Manager of China National Machinery Industry International Co Ltd, remarked on the coverage of world-class exhibits: “We recognise that market players will use the global innovations at Automechanika Shanghai to advance the automotive industry further. In the Chinese market, we expect to see another leap in NEV production and sales of over 13 million units1 as the country’s charging infrastructure and supportive government policies accelerate the adoption. Moreover, the rapid progress of AI, sensor technology, and connectivity is charting a course towards enhanced vehicle autonomy, safety, and efficiency. Moving forward, we will assume more responsibility in promoting the advanced development of the automotive industry by continuing to provide better trade fair services.”
- Hydrogen tech was present. Companies such as Ambarella, Nanyue, VIE, and Fulin Precision displayed hydrogen-related products, automotive chips, new energy vehicle power systems, raw materials for power batteries, and wireless charging. In addition, the Future Mobility Area featured advancements in NEVs, hydrogen technology, advanced connectivity, and autonomous driving, which Dongfeng Huashen, Dongshi, Hyvitech and Youkong presented.
- “Automechanika Shanghai is a prime gathering to summarise the financial year as well as look for future business opportunities. It provides a valuable opportunity to speak with both current and potential customers, facilitating discussions about our product development. This year, we met with visitors from the Middle East and South America, some of whom placed orders on the spot.” Ms Jenny Shen, Sales Director, Shandong Juncheng Metal Technology Co Ltd (Tyres & Wheels)
- The next edition of Automechanika Shanghai will take place from 2 to 5 December 2024. The event is organised by Messe Frankfurt (Shanghai) Co Ltd and the China National Machinery Industry International Co Ltd (Sinomachint).