Modest Beijing Auto Show Presence Belies Harman's Gains In China

Apr 25 2014, 10:54pm CDT | by

At China auto shows, it’s usually companies with the biggest displays, sleekest cars and attractive female models that get the most attention.  A relatively modest showing by U.S. acoustics and auto entertainment electronics supplier Harman at the Beijing Auto Show this week belies the success it’s been having in the China market.

The Stamford, Connecticut-based company’s China sales have increased from less than $50 million a year to $500 million in the past five years to customers that include BMW, Toyota, Hyundai and GM. It expects growth in the country to continue to outperform China’s gains in GDP in the coming years, chairman Dinesh Paliwal explained to me at the fair this week.   “China has been a great growth story for us,” Paliwal said. “It didn’t happen by accident.”

How did it happen? First, Paliwal knows something about China because he resided in the country himself relatively early in its reform period. He lived in Beijing in 1994-98, when he opened global industrial firm ABB’s China operation and built up the business before being transferred to its headquarters in Switzerland.

Under Paliwal, who became CEO of Harman in 2007, Harman has expanded in China quickly in part because it has successfully localized.  It hired a China hand, American David Jin, to run the business. Then, it poured some $100 million into local production lines and research centers in Shanghai and Chengdu. It also has a design center in Shenzhen.

 “In China, you cannot operate from the outside,” Paliwal said. Manufacturers want ready supplies from local plants. “They aren’t interested in shipping from the U.S. or Germany.” Harman differentiates itself because of the breadth of that is can offer locally, Paliwal. “A lot of our competitors are not doing the whole value chain here.”  

Of course, it also helps to be in an expanding industry in an economy that boasts the world’s largest population. That growth has make China’s the world’s largest auto market in the past several years. “There is still a lot of mismatch between supply and demand,” Paliwal said.

Yet there’s a big difference between seeing a lot of potential demand for your products in China, and creating the operation to prudently win business. Harman has apparently managed to find a way.

– Follow me on Twitter @rflannerychina

 
 

Don't miss ...

 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

IPad Air Giveaway 2014 is Online
IPad Air Giveaway 2014 is Online
Our sister site I4U News is giving away a brand new iPad Air or if you can wait an iPad Air 2. This is an $499 value.
 
 
Your Parent Or Kid Moved In: Are You Covered?
A record 57 million Americans now live in multigenerational family households — double the number in 1980, according to a new Pew Research Center study. And I bet many of them have the wrong homeowner’s or renters...
 
 
Pandora Looks to Challenge Terrestrial Radio's Dominance in Cars
Pandora Media is one of the largest Internet radio providers in the U.S. with more than 75 million active users. While the company’s active user count has increased at a robust pace historically, it is likely to slow...
 
 
Are General Manager Salaries About To Skyrocket? Will There Be A Front Office Salary Cap?
Are General Manager Salaries About To Skyrocket? Will There Be A Front Office Salary Cap?
It’s January 2026. New York Yankees owner Hal Steinbrenner gets out of his driverless car and triumphantly marches before the gathered press to introduce his prized new free agent. It’s a record-breaking contract—over...
 
 
 

Latest from the Network

US urges peaceful transition of power in Burkina Faso
Washington, Nov 1 (IANS) The US Friday called for a "peaceful" transition of power in Burkina Faso, but refused to label the military's take-over as a coup. "We underscored our commitment to peaceful transitions of...
Read more on Politics Balla
 
'Interstellar' about bonds of love: Jessica Chastain
Los Angeles, Nov 1 (IANS) Actress Jessica Chastain says that her forthcoming science fiction "Interstellar" is also about fathers and the bonds of love. In the movie, she plays Matthew McConaughey's character's...
Read more on Celebrity Balla
 
Chinese unmanned lunar orbiter returns home
Beijing, Nov 1 (IANS) China succeeded Saturday in the world's first mission to the Moon and back, becoming the third nation to do so after the former Soviet Union and the US. The test lunar orbiter, nicknamed "Xiaofei...
Read more on Business Balla
 
Avril Lavigne feels 'a bit lost'
Avril Lavigne feels ''a bit lost'' amid rumors her marriage to Chad Kroeger is on the rocks. The 'Here's to Never Growing Up' singer, who recently celebrated her 30th birthday without her husband, reportedly thinks her...
Read more on Celebrity Balla
 
Scott Disick is battling severe anxiety
Scott Disick admits his anxiety makes him ''literally want to jump out of my skin.'' The 31-year-old reality TV star - whose longtime girlfriend Kourtney Kardashian is set to give birth to their third child in December...
Read more on Celebrity Balla
 
Demi Lovato wants to be 'sexier' this Halloween
Demi Lovato says working out has boosted her confidence. The 22-year-old singer, who sought treatment for a number of issues, including an eating disorder, in rehab in late 2010, is planning to wear a ''sexier''...
Read more on Celebrity Balla
 
Usher's son is his toughest critic
Usher's son doesn't think he's a great singer. The 'She Came To Give It To You' hitmaker admits his youngest child, Nayvid, five, is very critical of his performances. The 36-year-old star said: ''He doesn't care about...
Read more on Celebrity Balla
 
Rogen may star in Steve Jobs biopic
Los Angeles, Nov 1 (IANS) Actor Seth Rogen is reportedly in talks with Sony studio to star as Apple co-founder Steve Wozniak in their upcoming Steve Jobs biopic. "Zero Dark Thirty" star Jessica Chastain is also being...
Read more on Celebrity Balla
 
Lindsay Lohan denies dating Tom Cruise
London, Nov 1 (IANS) Actress Lindsay Lohan has denied she's secretly dating actor Tom Cruise. The duo reportedly swapped numbers here recently, and have been meeting up since. But now Lohan's representative said the...
Read more on Celebrity Balla
 
Three Iraqis arrested on terror charges in Switzerland
Geneva, Nov 1 (IANS) Swiss authorities Friday said they arrested three Iraqi nationals suspected of planning a terrorist attack in Europe. The office of the attorney general of Switzerland said in a statement that the...
Read more on Politics Balla