Webasto is not your typical Chinese maker of auto parts. Technically, it is a German exporter of quality sun roofs and roofing systems, but its success and its future is being defined in China, where every third Volkswagen and every fifth BMW car is sold.
The small family firm based in southern Germany makes roof systems for autos – sun roofs and retractable roofs for convertibles – and has a sales volume of €2.5 billion ($3.3 billion). Thanks in large part to demand from China, Webasto aims to double its sales over the next few years.
The auto market is expanding rapidly in China and buyers want all the latest accessories from leather seats to sound systems to convertibles and cars with sun roofs. “Sun roofs and panorama roofs are a must-have in China,” said Holger Engelmann, Webasto’s chief executive. By 2018, he expects €1 billion in sales to come from the Chinese market. “We have the orders to motor that growth,” he said. “Now we just have to deliver.”
Sunroofs have expanded to become a big business for Webasto, which started out making clothing hangers and metal car wheels. Many newer auto models now have roofs made entirely of glass. The industry rule of thumb is, the larger the car, the more glass in the roof.
Holger Engelmann sees strong potential for sales of Webasto’s glass roofs and has plans to illuminate roofs with different colors in the future. He believes electric-lit roofs will sell well in Asia.
For SUV drivers, sun roofs give a sense of light and brightness. Chinese auto buyers like larger interiors in their vehicles and an open view of the sky. Many sedans and SUVs sold there are extra-long or extra-large, providing more space for glass in the roof.
Webasto also makes retractable roofs for convertibles. But the market for convertibles is shrinking due to the crisis in southern Europe. And this area of the business is less successful in China because of the heavy smog in the major cities.
Mr. Engelmann sees strong potential for sales of Webasto’s glass roofs and has plans to illuminate roofs with different colors in the future. He believes electric-lit roofs will sell well in Asia.
Webasto is in the process of replacing some of the heavier roof glass with lighter polycarbonate. The roof costs more but would pay for itself through fuel savings by being 30 kilograms lighter. Mr. Engelmann is not concerned that his lighting and other innovations might be copied in China. “It’s easy to copy one roof. But it’s very hard to copy 10 million roofs,” he said.
The Chinese market for passenger vehicles is growing at an annual 26 percent, according to a McKinsey study from 2013. Every fifth BMW and every third VW is manufactured and sold there.
Now, German auto makers see opportunities in alternative drive vehicles in the region. The Chinese government is creating a tax break for environmentally friendly autos that takes effect in September.
If the smog ever clears up, car drivers might get some mileage out of those panoramic roofs.