CHONGQING (CQNEWS) -- Nestled behind an old residential area at No. 125, Hanyu Road, Yubei District, this German factory – Mahle Engine Components (Chongqing) Co., Ltd. (known as Mahle Chongqing), boasts an annual output value of nearly 200 million yuan.

There's a saying in the industry: "One out of every two cars in the world is equipped with Mahle components." It might surprise some to learn that this globally renowned automotive parts manufacturer has made a substantial mark in Chongqing. The company's products have benefited a variety of sectors, including general and garden machinery, and reached worldwide, including North America, Europe, and Japan.

What’s the story behind Mahle Chongqing’s success?

By chance, the company entered Chongqing through the acquisition of a similar type of factory.

According to Shen Zhengjun, General Manager of Mahle Chongqing, the company’s entry into this vibrant market was a perfect blend of opportunity, timing, and strategic location.

Chongqing's automotive sector was booming in the early 2000s, driven by local and joint venture brands like Changan, Qingling, Changan Suzuki, Changan Ford, and Changan Mazda.

Mahle Group, based in Stuttgart, Germany, has already established itself globally as a leader in the automotive components sector after over 80 years of development, providing piston systems and cylinder components to major automobile brands worldwide.

"Mahle entered China in 1997 and established piston factories in Jiangsu’s Nanjing and Liaoning’s Yingkou. With a commitment to expanding its foothold in the Chinese automotive parts market, Mahle was keenly interested in Chongqing," Shen explained.

Chongqing's burgeoning automotive and motorcycle market was attractive, thanks to its comprehensive industrial and supply chain networks and promising growth prospects. Additionally, as the only municipality directly under the Central Government in the central-western region of China, it was becoming increasingly appealing to foreign enterprises.

At that time, Mahle found a strategic opportunity in a Sino-Japanese joint venture called Chongqing Changjiang Izumi Piston Industry Co., Ltd. "This company had been operating successfully for nearly a decade. However, its leadership recognized the potential for growth by integrating Mahle’s advanced technology and management practices," Shen noted.

After several rounds of negotiations, Mahle Group decided to acquire Changjiang Izumi in 2004, transforming it into Mahle Chongqing and expanding its production into both automotive and non-automotive engine parts.

Approximately 80% of the company's annual revenue now comes from product exports after the company made a strategic shift.

In its early years, Mahle Chongqing enjoyed steady growth in domestic and international markets.

However, the 2008 global financial crisis posed significant challenges. As demand plummeted, an oversupply of automotive components led to a nearly 50% drop in business, putting Mahle Chongqing in a difficult position.

In response to these difficulties, Mahle Chongqing adapted its strategy, reducing its focus on automotive parts by over 50% and channeling resources into manufacturing non-automotive engine components for general machinery, motorcycles, and garden equipment. By 2011, the company was back on a path of stable growth.

"Our products have gained a strong reputation in overseas markets," Shen shared. In North America, where hurricanes and snowstorms frequently disrupt power, the demand for household generators surged. As a result, Mahle Chongqing established itself as a parts supplier for numerous well-known general machinery companies in the region.

Today, approximately 80% of Mahle Chongqing's annual revenue, which stands at 200 million yuan, comes from exports. Its products have reached markets in North America, South America, Europe, India, and Japan.

Mahle Chongqing was one of the first companies to benefit from the China-Europe Railway Express (Chongqing).

"The business environment in Chongqing has improved significantly over the years," Shen remarked, noting that for export-oriented enterprises like Mahle Chongqing, having multiple export channels has been crucial. Mahle Chongqing is one of the first companies to feel the speed of the China-Europe Railway Express (Chongqing).

Shen illustrated this with a calculation: Mahle Chongqing exports about 30 million yuan worth of goods to Europe annually. Previously, goods were shipped via the Yangtze River waterway to Shanghai or Ningbo, taking nearly two months to reach customers. However, with the advent of the China Railway Express (Chongqing-Xinjiang-Europe), goods can now arrive in Europe in just half a month, significantly improving cash flow and operational efficiency.

Moreover, the variety of application scenarios for Mahle's products has expanded. "We have seen remarkable success in the non-automotive sector,” said Shen. Concurrently, Chongqing’s automotive and motorcycle industries are thriving, featuring renowned brands like Changan, SERES, Loncin, and Zongshen. In response, Mahle Chongqing is increasingly focusing on the research and development of large-displacement motorcycle parts to meet the growing demand. (Translated by Yuki, Fathom Language Limited)