Dialogue?|?Gasgoo CEO, Information Chief Editor?Zhou Xiaoying
Written by?|?Gasgoo Editor?Ren Huijuan
In recent years, with the development of industry regulations With the tightening of regulations and the increasing attention of consumers, global automotive safety systems are developing rapidly. According to analysis and predictions by relevant institutions, overall sales are expected to exceed US$25 billion by 2025. The good market prospects will inevitably lead to more intense competition in the industry. ?
Recently, Mr. Shan Jinhui, Global Executive Vice President and China President of Joyson Automotive Safety Systems (hereinafter referred to as "Joyson Safety"), the world's second largest automotive safety system supplier, accepted the Automobile said in an interview: "Joyson Safety currently accounts for about 30% of the global market share. The company plans to reach about 40% of the market share in the future, and China is expected to achieve this goal ahead of schedule." Auto safety has always been The market concentration in this field is relatively high, with the top three currently accounting for more than 85% of the market share. Joyson safely set this flag, which undoubtedly shows its determination to keep sprinting forward.
Image source: Joyson Safety
In fact, in recent years, Joyson Safety has been subverting the market structure in the automotive safety field. In just three years from 2016 to 2018, it will The high-quality assets of Bailide and Takata, which were among the top five companies in the industry, were acquired from scratch. They grew from scratch to large and ranked second in the industry. This has become a key research case in the capital market. So, what are the core driving forces and supporting points behind the rapid rise of this industry “dark horse”? Facing the increasing fluctuations and uncertainties in the global auto market, how will the goal of reaching 40% be achieved in the future? In addition, how will we respond to the new development situation in the automotive industry? In response to the above issues, Gasgoo Automobile had an in-depth exchange with Mr. Shan Jinhui.
Shan Jinhui, Global Executive Vice President of Joyson Security and President of China; Image source: Joyson Security
3 years, a short-term success from 0 to 2
Joyson Electronics' success in overseas mergers and acquisitions has always been a "textbook" level. Coupled with its market acumen and international operation capabilities, the company has achieved active and passive safety business expansion in just three years. 0 to 2nd place in the world in short track.
“No matter how the automobile industry changes, safety components will always be indispensable. This is also the core of Joyson Electronics’ development of automobile safety business through acquisitions.” Shan Jinhui said. As for the reasons why Joyson Security can avoid market risks in M&A operations and achieve success, Shan Jinhui summarized the following points:
1. The acquired company’s huge customer base and mature production , technical system has laid a solid foundation for the rapid development of Joyson Safety.
According to reports, Baili De was originally ranked fourth in the world in the field of automobile safety. In addition to having strong influence in the local market in the United States, it also has a strong customer base among independent brands in Europe and China. Its main customers include Most global automobile manufacturing companies and Chinese local OEMs. Takata was once a leading company in the field of automotive safety. It has 56 production bases in 20 countries, which can promptly alleviate the problem of insufficient production capacity of KSS (ie, Baili De). In addition, Takata’s Japanese customer resources make up for KSS’s customer shortcomings. After completing the acquisition, Joyson Electronics merged and reorganized Takata's high-quality assets and the original safety business in April 2018, naming it Joyson Automotive Safety Systems. The company's safety business revenue increased from 7.3 billion yuan in 2016 to 4.29 billion yuan. billion and ranked second in global security market share.
2. Learn from others’ strengths and gather international management talents. "Generally speaking, an enterprise can go as far as it has a large structure. Joyson is a company that operates globally, so it draws on the strengths of others in terms of talents, absorbs many managers with international backgrounds, and gives them sufficient rights. For For many professional managers, there is no longer a ceiling, and everyone will focus more on how to better improve their business and how to make operations more efficient," said Shan Jinhui.
3. Integration of values ??and unified management philosophy. In Shan Jinhui’s view, the integration of corporate philosophy and values ??played a very important role in the Joyson merger and acquisition.
"Joyson Electronics respects the regional culture of the integrated company very much, but will also clearly explain the company's general values ??and concepts in advance so that everyone can understand what should be done and what should not be done, or that everyone agrees What kind of goals should be achieved to facilitate more efficient management? ”
5 years, a breakthrough from 2 to 1
Although we already have a certain foundation, we are facing a fierce market. With competition and many uncertainties in the auto market, it is not easy to achieve a 10% share increase in five years.
In this regard, Shan Jinhui said that the implementation process is indeed difficult, but judging from the current order growth, the possibility is still relatively high. Financial report data for the first half of 2020 shows that despite the spread of the global epidemic, Joyson Electronics has added approximately 25.3 billion yuan in new orders, of which Joyson Safety has added 16.4 billion yuan in new orders. cycle) totaled 210.7 billion yuan.
According to Shan Jinhui, among the new domestic orders in the first half of the year, customers include major domestic joint ventures and local OEMs, as well as new energy brands. "As the domestic auto market picks up, order volume will continue to rise in the coming months. For example, FAW-Volkswagen ID.4 CROZZ and SAIC Volkswagen ID.4 CROZZ recently completed their debut in China, and we have also received related supporting orders."
Image source: Joyson Security
As for the reasons for the continued increase in orders, Shan Jinhui believes that there are three main points:
First, benefit from the balanced Customer structure, as mentioned above, Joyson Safety's customer base covers many leading car companies in the United States, Japan, Germany, China
and so on. As the saying goes, the east is not bright but the west is bright. Take China as an example. Although the auto market has continued to decline since 2018, Japanese and German automakers are still strong. Some leading independent brand automakers have also bucked the trend and developed. This has given Joyson Seat Belt There has been a steady flow of orders.
Second, benefit from the optimization of resources and the improvement of the quality management system. After the merger, Joyson Safety immediately began to integrate various regions and functions, including establishing a new global management team, optimizing production capacity, improving production management systems, etc., such as upgrading and expanding the Miskolc automotive airbag super factory in Hungary. Preparation and completion of Joyson Safety Shanghai Lingang Factory, etc. "In 2018 and 2019, our business was still affected to a certain extent by historical issues, but with the continuous optimization of various management in the later period, we saw that customer confidence has been restored."
Third, Benefited from improved product capabilities and regulatory promotion. In recent years, with the increasing demand for electronics, Joyson Safety has taken advantage of the trend and launched a number of new safety technology products to improve the safety factor of drivers and passengers and the value of safety products on bicycles. For example, the Driver Monitoring System (DMS) can track the driver's head position and facial features in real time, identify the driver's gaze direction, and alert the driver to focus on driving. This product is currently in mass production on many Cadillac models and is in use in Promotion on domestic self-owned brand models has become one of the sources of new orders.
“In addition, the continuous improvement of safety regulations has also promoted the increase in the configuration rate of related safety products. For example, electric seat belts have now become a bonus item in crash tests; while airbags, although essentially do not cause much damage, Changes, but as collision regulations tighten and car companies have to meet relevant standards, the number of airbags will increase," said Shan Jinhui.
Image source: Joyson Security
In addition to the above, it is understood that in order to promote further development of the enterprise, Joyson Security has implemented a new organizational structure adjustment and its business is more segmented. and focus. According to Shan Jinhui, Joyson Safety has established four major product line divisions: steering wheels, airbags, seat belts and integrated safety solutions to quickly respond to customer and market needs.
“In fact, most of our new orders this year are based on the original ones, and the real rapid release will be in 2022. From the perspective of the Chinese market, as the auto market gradually improves , it is possible to achieve the 40% goal ahead of schedule," said Shan Jinhui.
Picture source: Joyson Safety
Attached is the interview transcript:
——? Company development history and operating model after mergers and acquisitions?——?
Gasgoo: Mr. Shan, please give an overview of Joyson Safety’s current business development.
Shan Jinhui: Joyson Security is one of the four major business divisions of Joyson Electronics and currently accounts for more than 75% of the overall business.
Joyson Safety's business mainly comes from the integration of high-quality assets of KSS and Takata. Its current products cover four directions: airbags, seat belts, steering wheels and integrated safety solutions.
Gasgoo: Joyson Safety can be understood as a company that has grown from nothing to big in a short period of time. In addition to increasing revenue, what is the value of the acquisitions of KSS and Takata to the subsequent development of Joyson Safety?
Shan Jinhui: No matter how the automobile industry changes, safety components will always be indispensable. This is also the core of Joyson Electronics’ development of automobile safety business through acquisitions. In the field of automotive safety, market concentration is generally high. Before Joyson's acquisition, the four major global safety component suppliers dominated the market. In 2016 and 2018, after we acquired the high-quality assets of KSS and Takata, our cumulative market share accounted for 30%, ranking second in the world.
Whether it is KSS or Takata, they already have a deep foundation in products and business. Their customers cover European, American, Japanese and Chinese independent brand car companies, which has laid a very solid foundation for our later development. . Taking China as an example, we are currently cooperating with the top 15 leading car companies, and we also have supporting companies with leading new car manufacturing forces.
Gasgoo: Judging from previous acquisition cases, later integration and operations are more challenging than acquisitions. In this regard, what experience does Joyson have that the industry can learn from?
Shan Jinhui: I personally joined Joyson Safety in 2018 and participated in the integration and operation of Takata’s high-quality assets after the acquisition. The biggest feeling is that a company can go as far as its structure is large. . Joyson is a company that operates globally, so it draws on the strengths of others in terms of talents, absorbs many managers with international backgrounds, and gives them sufficient rights.
In addition, it is the fusion of the company's courage and values. After acquiring relevant companies, we will clearly explain the company's general values ??and concepts in advance, so that everyone can understand what should be done and what should not be done, or what goals everyone wants to achieve together, so as to facilitate better understanding. For efficient management. Take Takata, for example. Previously, the decision-making power had always been with the headquarters, and regional management was mostly in the role of execution and obedience. After the acquisition, we gave the team certain decision-making power to respond quickly and flexibly according to local market needs and improve operational efficiency. This is what we call a conceptual change.
Another point is the integration and optimization of resources. After the acquisition of two major international companies, the Joyson Electronics team quickly integrated production, R&D and other resources. As before, the two companies had factories in Tianjin. After the integration, production capacity and personnel were optimized. From the original 7,000 The number of people was reduced to more than 5,000. In addition, improvements have been made in terms of procurement costs. In the past, most of Takata's supporting companies were Japanese. Although they were relatively stable, the prices were not necessarily the most competitive. For this reason, we re-integrated the supply chain resources. .
——? The company’s business status and expansion plan in China?——?
Gasgoo: The epidemic in 2020 has had a greater impact on the global auto market. Joyson Safety is currently How is the development going?
Shan Jinhui: As a global enterprise, our overseas business accounts for a large proportion, and it is bound to be affected to a certain extent. However, judging from the third quarter financial report, the decline has narrowed. From the perspective of Joyson Safety China alone, we outperform the market.
Despite the poor performance of the annual auto market, the company's order volume continues to grow. In the first half of the year, Joyson Safety's new orders totaled 16.4 billion yuan, and the amount of orders on hand (the entire life cycle of orders received but not yet produced) is also considerable. As the domestic auto market picks up, order volume will continue to rise. For example, the FAW-Volkswagen ID.4?CROZZ and SAIC-Volkswagen ID.4?X recently completed their debut in China, and we have also received related supporting orders.
Gasgoo: Can you give us a detailed introduction to your cooperation with Tesla and its progress? In addition, how is working with Tesla different from other customers?
Shan Jinhui: In fact, cooperation with Tesla at the global level has already begun. In February this year, we received a letter of designated production from domestic Tesla for the domestic Model 3 and Model Y. It supplies airbags, steering wheels and many other products, which are supplied by Joyson Safety's Lingang factory. Compared with other customers, working with Tesla is actually not much different, except that Tesla has very tight requirements on mass production time. For example, one of our projects has to be delivered nearly half a year earlier than originally planned.
But this is also a good thing, driving us to continuously optimize processes and improve management efficiency to respond to customer needs faster.
Gasgoo: After experiencing the test of the epidemic, will the company increase its development efforts in China?
Shan Jinhui: China is a very important market for Joyson Security and the entire Joyson Electronics team. Accordingly, we will increase investment. In addition to R&D, production and business expansion are also increasing.
In terms of research and development, we are further improving the capabilities of our localization team, hoping to be more involved in the global innovative product development process, and gradually be able to undertake the development of certain products.
In terms of production, following the completion of the upgrade and transformation of Joyson Safety’s Hungarian “Super Factory” in November 2019, Joyson Safety’s Ningbo “Super Factory” has recently passed relevant system and customer certifications and will become the company’s domestic The most advanced production base for automotive safety system products. In addition, Joyson Safety Lingang is a factory we established in 2019 and will also play an important role in future business development.
In terms of business development, in addition to increasing the number of orders from old customers on the original basis, we are also constantly working on some new customers, such as a leading domestic brand enterprise, which was previously at a high level in terms of cooperation. During the blank period, we now have more than 40% share in its security products.
In fact, we have already covered all the major customers in China. The future is to closely grasp customer needs and consumption trends and increase the market share again.
Gasgoo: The epidemic has posed great challenges to the supply chain. What measures does Joyson Safety take in terms of localization expansion of the supply chain?
Shan Jinhui: Indeed, through this epidemic, we have realized the importance of supply chain localization. Therefore, with regard to local supplier resources in China, we are actively communicating and hope that capable suppliers can enter the global procurement system through Joyson Safety China.
——?Product development strategy under the new situation?——?
Gasgoo: At present, what is the business proportion of each of the company’s four core products?
Shan Jinhui: Relatively speaking, the share of the three major passive safety products in China, airbags, seat belts and steering wheels, is roughly the same. Integrated safety products are in the market cultivation period. In the long run, we will Continue to increase market development efforts.
Gasgoo: With the development of new technologies such as electrification and intelligence, what changes have been brought to automotive safety products?
Shan Jinhui: In terms of passive safety, the basic attributes have not changed much. However, as the interior cabin layout changes and electronic requirements increase, there will be certain changes in product layout, functions, etc. For example, after the commercialization of autonomous driving, the steering wheel will be retracted into the center console. Originally, the airbag was inside the steering wheel, but in the future it may be at the top. In addition, electric seat belts are also very popular now. They have an early warning function before a collision occurs and take protective measures for the driver and passengers in advance.
In addition, we are also making some innovative attempts, such as implanting software into the steering wheel to form 3Dswitch technology, which allows customers to customize the buttons on the steering wheel. This product has received an order from General Motors. Not only that, but functions such as steering wheel heating and emergency vibration are also in demand in the market.
All of the above have promoted the value of safety products on bicycles and are conducive to our business expansion and growth.
Gasgoo: Active safety is now a focus of everyone’s attention. What plans and measures does the company have in this regard?
Shan Jinhui: For Joyson Safety, we prefer to focus on our main business and strengths, and expand our products on this basis. What we hope to do is to combine active safety with passive safety and achieve progressive changes.
Currently, we have developed related products, such as the Driver Monitoring System (DMS), which can track the driver’s head position and facial features in real time, identify the driver’s gaze direction, and warn the driver. Focusing on driving, it has been mass-produced on many Cadillac models and promoted on domestic independent brand models. In the future, we will collaborate with other business units of the group such as Bridgelux Joyson and Junlian Zhixing to develop more functions.
——?Future business development and room for improvement?——?
Gasgoo: What are the future development expectations for Joyson Safety Global?
Shan Jinhui: Our global goal is to achieve approximately 40% market share in the future. Based on the current development in China, we are expected to achieve this goal ahead of schedule globally.
Gasgoo: A 10% increase in market share is still quite large. What is the company’s confidence in proposing this goal?
Shan Jinhui: In fact, the number of orders I mentioned above are mostly from new additions on a traditional basis, because in the early stage, affected by factors such as the decline in the auto market, customer recovery, and the split of joint venture companies, the company's integration process The growth of China's business will not be too fast and there will be a certain buffer period. We expect there will be a relatively large increase in 2022. On the one hand, this is related to our stable customer structure and brand influence. On the other hand, it is related to the increase in orders for innovative products and the tightening of safety regulations, which has increased the value of products on bicycles. For example, electric safety belts, regulatory requirements are a direct boost to the assembly rate.
Gasgoo: In order to achieve its goals, what new plans and adjustments does the company have in the future?
Shan Jinhui: In order to promote further development of the company, Joyson Security has established a new organizational structure adjustment, which is to conduct BU-style management by business units according to product lines, and the business is more segmented and focused. There is also greater focus when responding to customer needs.
Overall, I personally think it is achievable to achieve 40% market share in the future. However, the entire system still needs to be continuously improved to provide customers with more comprehensive services, which not only reduces costs, but also includes development capabilities, product quality, etc., through our efforts to promote customer development.
About the "C?Talk? Strategy 2020" high-end interview series
"C?talk" is a high-end interview column strongly created by Gasgoo, which mainly invites leading car companies in the automotive industry , decision-makers and industry experts from leading supply chain companies conducted in-depth interviews and shared insights on industry hot topics, corporate strategic development, and forward-looking technology trends. In 2019, the "C?talk?Struggle 2019" series completed interviews with nearly a hundred corporate executives and industry experts from leading companies such as Porsche, Great Wall Motors, NIO, Bosch, ZF, and Valeo. In 2020, the C?talk series of interviews will continue to focus on the theme of “planning”.
This article comes from the author of Autohome Chejiahao and does not represent the views and positions of Autohome.