Shanghai Sanden Behr Automotive Air Conditioning Co., Ltd. (hereinafter referred to as “the SSB”), the original SEGM (Shanghai Ek Chor General Machinery Co., Ltd) is a Sino-Japanese-German joint venture.  With total investment of $ 74.6 million and registered capital of $ 29.84 million, it is the largest supplier specializing in serial products of auto A/C system and compressor in China.

The company was co-funded with the Grand Group in Thailand in 1990.  On the basis of the innovation in science, technology and management, the company has set up the management concept of “Human is the base, everyone could be a manager” in order to make full use of foreign funds and their advanced techniques. The SD5 and V5 series A/C compressor manufacturing technologies introduced from Sanden Japan and from Delphi U.S.A. respectively have set up a solid foundation of the company.  SSB makes use of international resources to optimize that of its own under the guidance of “Expanding profit with mass production, upholding scientific and technical innovation, raising competitive ability by minimum cost and taking credit as business base”. It successfully realized the asset regoup on the basis of the former SEGM—a Sino-Thai joint venture, among four parties: Shanghai Automobile Stock Company, Shanghai Long-hua Industry Company, Japan Sanden Co., Ltd. and German Behr Co., Ltd., the last of which were new shareholders. After that it became an automobile heating system enterprise with integration technique, systematic development, package set and modular supply. It has an internationally advanced and Chinese high-level auto A/C R&D center as well as an environment simulation lab which has the ability to self-design and make new products. It also enjoys the car market share of 70% in China.  Its national sales network has covered more than 1000 places through China and international sales market has reached over 30 countries and it has set up a perfect sales network of both home and abroad.  As a result, the company’s comprehensive competitiveness leaps to a higher level.

Mass profit

SSB was just a small factory before.  With the penetration of reform and opening-up, under the market-oriented economic effect and in pursuit of self-development, it entered into partnership for the first time in 1990, making full use of foreign funds, adjusting productive structure and introducing A/C compressor manufacturing technology from Japan Sanden and Delphi U.S.A.  Especially from 1998 when the management idea of “Human is the base, everyone could be a manager” was carried out, it has undergone an explosive management reform, optimizing its resources from time to time, increasing resource utilization ratio, making great changes and gaining economic benefit.  The sales income is 15 times as much as before and the profit is 550 times, even when the staff number was decreasing.  In 2003, its yearly sales volume reached ￥ 1.61 billion (per captita 1.6327 million) and its net fixed asset increased from ￥3.46 million in 1990 to the present over $30 million, almost a 100 times’ increase, which is quite rare in the machinery industry of China.  With the expansion of the company, its structure changed a lot.  The affiliated companies increased from 4 in 1990 to 20 recently, the yearly compressor output from 100 thousand to 1.6million.  Its market share has extended from the top three car bases in China, i.e., SAIC, FAW and Wuhan Citroen, to over 20 main engine factories.   The A/C compressor’s market share in Chinese automobile market has reached to 70%.  The maintenance network has covered over 1000 places throughout China.  Recently, SSB has seen a great increase in its overseas market.  The sales amount was $8 million with a sales volume of more than 800 thousand.  Its products are exported to U.S.A, Canada, Germany, Sweden, Italy, Spain, India, Korea, etc, over 30 countries, and it has more than 30 agencies in different countries such as U.S.A, Italy, Spain, Korea and Singapore.  After its asset regroup in 2004, the company further implemented the strategies of “grasping the opportunity, exerting pressures on the opponents and ” and “extending into overseas market” in order to fulfill the goal of “being larger, stronger and more developed”.  By the flexible productive method of “high quality, low cost, multiple variety, small amount and large scale ”, its products have stepped into first class of the same kind in the world and its sales network was further extended into more places both home and abroad. It became one of the Top 8 of all the counterparts of the world before its own prediction. 

Science and technology innovation

SSB aims at improving the ability to self-design and management quality to meet the customers’ requirement and to embrace challenges.  In accordance with the market’s demand, new products are successfully made in a united, leading and self-designed way.  Meanwhile, great efforts are made on the commercialization and market-orientation of new products

As competition is becoming more fiercely in the A/C compressor’s market, SSB aims to make its new products internationally advanced by introducing and keeping pace with the latest products and technologies, in spite of the fact that it is one of the earliest enterprises designing and producing auto A/C compressors in China. Besides that, in order to develop products independently with advanced level abroad but of its own IPR, the company integrated its R&D institute and absorbed a great amount of scientific research workers including 16 advanced professionals, 2 doctors and 21 graduates. They are incited to perfect the company’s R&D system. Now every designer is using CAD. E-files are effectively managed by PDM, main products are 3D modeled by using US, and SOLICE EDGE. 3D models are used to CAE and CAM.  The designing platform should be constructed at same pace of whole car factories to insure the figure and information can be transferred reliably and punctually, so that the company can be equipped with a team adaptable to the market change.

In addition, with a big investment, the company set up the first internationally advanced compressor environment simulation lab in China, equipped with 80 durability test-beds and 2 all-round test machines.  It has also an advanced laboratory shop with multistand and vortex machining centers and fine measuring instruments including 3 coordinate measuring machines, and full automatic metallomicroscope, all of which have guaranteed the company’s development ability.

By now, the SE5H14, SE10B15 and V5 series compressors have passed the mass production appraisal.  They have received good feedback from the clients that their technical performance has measured up to world top level.  The key technologies are patentized to have autonomous IPR.  The company has invested a lot to broaden its productive field by developing new promising products, 60% of which are pointing to overseas market.  These new products, including electric auto A/C compressor, vortex compressor and CO2 compressor, have already come to fruition and are developed with the international pace.  Now, the product line of the company has expanded into four series, over 150 varieties and 400 specifications, containing the main auto A/C compressor products of the world.

Low cost strategy

For the last decades, due to all staff’s effort, the company called for management innovation, following the idea of “total cost precedes strategy”, introducing market campaign mechanism into the intranet and initiating “manager” activities.  The microeconomic entity was refined and the appliance of profit chart and balance sheet is extended to teams and groups to ensure the economic responsibility. On the one hand, technical innovation is advocated to lay stress on material domesticalization and reduction of cost, on the other hand, market is vigorously expanded under the guidance of “being larger, stronger and more developed.” and emphasis is laid on gains-to-scale.  Satisfactory effects were seen after all the above methods were carried out.

Intranet cost accounting system was established by thinning the finance accounting unit. Series means such as replacing the traditional “proportion share method” by “standard cost method” and the improvement of predictability and decision-making ability of balance sheets both macro economically and micro economically ensured a yearly 8-10% reduction of cost within 8 years when the company’s sales income enjoyed a yearly 10% increase. Especially in the recent years, nearly ￥70 million price reduction lost was slaked every year and the company has realized a zero growth of depreciation fee as well as a negative growth of personnel within a whole year.  The price of its A/C compressor, the company’s staple commodity, is 25% lower than the international FOB price.  Starting from refined plan, supple and punctual production, value project and double reform, SSB expands its scale by low cost and by integrating global resources.  Thus, it becomes internationally competitive.

Business credit

As credit is one of the two pillars in economic market, SSB pursues the confidence from both its clients and the society in the spirit of advancing with time and being responsible to the society.   It regards the product brand as the banner, systematic management as the outline and process controlling as the center in order to put into practice an all-round quality management. In accordance with the change and development of market, clients and environment, its quality guideline is timely made and modified.  The former guideline, Q (quality brand), S (satisfactory service), T (timely delivery), C (considerable price) ---- EkChor General wholeheartedly provides product to its customers all over the world, has been changed to Q (quality), S (Service), T (timely delivery), C (cost), E (environment), S (security), B (business), H (health).  The change and improvement of quality policy has shown the successive pursuit of excellence and the transformation from quality check up to quality management, from quality as the bottom-line to value maximization.

SSB had an early start on the establishment of a perfect quality guarantee system, fixing its eye on a high level and a wide range.  Early in 1993, it become the earliest auto company of an international standard after it had obtained ISO9001 system of quality certification approved by the German TUV company, which assured its products enter the international market.  After that, it obtained S9000、VDA6.1 and ISO/TS16949 system of quality certification in succession.  In the middle of the 1990’s, it gained ISO10012 measurement checkout system and ISO/IEC17025 laboratory certification, which are a further guarantee of the product quality.  In the later 1990’s, it has passed the approval of ISO14000 environment system and GB/T24001 occupational safety and health administrative system, which had strengthened both its responsibility toward the society and its staff and trust from the clients.

Following the tenet of “centered on customers ”, “user-satisfactory project” were carried out together with taking the measures “beyond clients’ expectation” to win customers’ satisfaction and trust.  Examples are like uniting working groups with mainframe teams, joining the developing, assembly and after-service process of products, involved in training and visiting service across the maintenance stations in China, organizing “send coolness to summer and warmth to winter” activities for taxi clients, visiting over 500 clients every year and solving over 200 technological transformation projects, etc. Over 90% clients are satisfied with SSB’s service. No serious quality complaints have occurred for a long time.

Due to the reliable product quality, advanced technology and thoughtful service, our brand has received an obviously higher reputation.  We have been enjoying the “Excellent Supplier” title for several years, the same as SAIC, FAW and Wuhan Citroen.  We were entitled “China AAAAA enterprise” by China Marketing/enterprise Development Center. SSB A/C compressor was selected “Chinese Famous Brand” by Brand Promotion Committee of China.

While SSB is making great profit, all its staff members insist on being honest to customers.  After over ten years’ effort, they have erected an excellent SSB brand image.

At present, the company has won honorable titles such as “Certificate for May First Labor in China”, “Advanced Enterprise with High Quality and Profit in China”, the “First Modernized management enterprise of mechanical industry in China”, “Advanced Enterprise in the Contentment Project for users in China ”, “Advanced unit for democratic management in China”, the “AAA Enterprise with Credit in Quality and Service in China ”, the “PR-A Grade for Evaluation of Profit and Success”, the “Excellent Enterprise in Shanghai Industry” and “Shanghai Civilized Enterprise”.

In addition, the company ranks among 2001` TOP 500 for joint ventures in China, among TOP 500 for joint ventures with largest sale, among Shanghai TOP 100 in 2002 and TOP 500 of mechanical industry in China, among 2004’ TOP 100 for unified competitiveness in Chinese auto components and parts companies awarded by China Mechanical Industry Administration Community.  Also in 2004, it won the honorable “Golden Medal for Auto A/C (the only one of the industry)”. The compressor product has won successively “user-satisfactory product in China” for two times and “Shanghai TOP 100 famous brand” for six times, as well as “the user-satisfactory products in Shanghai” and “Chinese famous brand”.

What’s more, the company gained AAA credit of the People’s Bank and A-level credit taxpayer.

Long-term development of the company

According to the analysis and research of Chinese macro economy, of the development trend of international and domestic product technique, of the market both home and abroad, of the main opponents and of the inner and outer environment, the company has made a right orientation as well as its development plan, guidance and strategic goal by combing all the advantages, disadvantages, chances and challenges of its competitiveness.  It takes the lead in the industry by “high technology and multiple variety”, expands the market by “and siege”, creates complementary relationship by uniting with strong opponents, divides the market, follows “centered by customers” and complements the “overseas penetration” strategy.

The company will concentrate on the goal of “being larger, stronger and more developed”, rely on the innovation in science, technology and management, insist on the management concept of “Human is the base, everyone could be a manager”, welcome new opportunities and challenges, follow the idea of “Expanding profit with mass production, upholding scientific and technical innovation, raising competitive ability by minimum cost and taking credit as business base.”, grasp the opportunity to adjust the stock holding ratio, consolidate the domestic market and expand international market. The goal of the SSB is to be one of the first class suppliers for auto air-conditioner in the world.