Volkswagen Group China and its required partner FAW have invested €10.9 million (100 million RMB or $15.8 million) in rebuilding facilities at Dalian.
The Volkswagen Group opened an engine rebuilding plant in China over the weekend, its largest sales market. About 15,000 engines per year will be refurbished at a plant in Dalian. The rebuilt engines will be about 50% less expensive then new ones since roughly 70% of the materials used in an engine can be reworked or recycled.
While all major automakers are scrambling to establish and maintain new vehicle manufacturing and sales in China, the so-called aftermarket is not being pursued with the same vigor, repeating the same mistake U.S. automakers made as their home market expanded 100 years ago.
Virtually all U.S. vehicle owners go to the aftermarket for repairs unless it is covered by warranty, resulting in a ~$295 billion a year business for independent shops and parts makers who control about 70% of the business.
The VW rebuilding plant in China is the Group’s first reprocessing facility outside Germany. The next step will be the expansion of activities at Dalian to include other engine models as well as transmissions. In addition, a test center for engines and transmissions looking at Chinese driving habits will be established shortly.
Notable in its pursuit of the Chinese aftermarket is Robert Bosch, the German auto parts maker. Bosch has been a major presence in China for many years now: The very first Bosch service shop based in China was opened in Shanghai in 1926. Since then, the workshop network in China has been extended consistently, as it has globally.
The first Chinese Car Service center, which replaced Bosch Services, began operations in 1998. By 2007, 500 workshops were adopted to the Bosch workshop concept due to the growing number of vehicle owners in China. During the last four years the number of Bosch Car Service centers in China doubling to 1,000 in the world’s largest car market.
(See also Bosch Car Service Opens 1,000th Shop in China as part of World’s Largest Independent Repair Network and Fight for Auto Repair Dollars Heats up at Ford and GM and AAA Asks Congress Yet Again to Pass “Right to Repair Act”)
