China is the world’s largest vehicle market, selling more than 28 million cars and trucks in 2016, compared with 18 million in the United States. Almost all the vehicles sold in China are made in China, supporting a diverse ecosystem of 76 component making conglomerates, and 184 vehicle assemblers, in addition to dozens of indigenous brands.
After a decade of double-digit growth, the market is now starting to mature. Most urban households have already purchased at
least one car, and, according to McKinsey & Company, half of those households are considering “trading up” to newer and better models. Meanwhile, the shape of China’s auto industry could change radically if Chinese authorities make good on their promise to eventually prohibit the sale of fossil-fuel-powered vehicles, in favor of those powered by batteries. Faced with the need to adapt, Chinese domestic auto makers are scouting the globe to buy premium brands, advanced technologies, and companies capable of conducting R&D into electric vehicles.
Shandong Longji Machinery specializes in manufacturing braking system components, including brake discs and pads. The company operates as an original equipment manufacturer for global brands such as India-based Tata Group. In 2016, more than half of its revenue came from overseas markets.
In January 2015, Shandong Longji Machinery and Germany-based SHW Automotive GmbH formed a joint venture (JV) for manufacturing brake discs. Shandong Longji will hold a 49% stake in the JV, which will operate under the name SHW Longji Brake Discs. In February 2015, Shandong Longji took another 49% in a JV formed with Germany-based Schwabische Huttenwerke Automotive GmbH to sell brake system components to Asian markets.