Identifying Trends in China
Jack Perkowski is the chairman and chief executive officer of ASIMCO Technologies, one of the most important players in China's automotive components industry. He founded the company in February 1994, after spending three years investigating opportunities in Asia and China and before others recognized the significant role that China would play in the global economy. With seventeen factories in eight provinces and fifty-two sales offices located in every corner of the country, ASIMCO Technologies is unique because it functions as a foreign-invested company built to specifically to serve the Chinese market. Under Perkowski's leadership, ASIMCO has gained a reputation for developing local management and integrating a broad-based China operation into the global economy. In 2005, ASIMCO was named one of the "Ten Best Employers in China," ranking third in a survey conducted by Hewitt Associates and 21st-Century Business Herald.
Jack’s new book Managing the Dragon: How I’m Building a Billion Dollar Business in China (Crown Business; March 18, 2008) discusses Jack’s experiences building ASIMCO from the ground up and the lessons he learned in developing the company’s local management team. The book also covers a wide range of topics such as decentralization; China’s different cost perspective and how it creates two markets for any product; intellectual property concerns; and practical advice on how to start a business in the country.
Jack Perkowski: Our biggest customers are the top 8 diesel engine companies in China. If you go to China and you see a truck or a bus that’s running on a diesel engine, chances are 25% of the parts for that engine come from our factories, and we’ve got a very strong position in that marketplace. So the top 8 diesel engine companies which account for two-thirds of diesel engines made in China and 98% of the bigger 6-cylinder engines, those are our customers. Of those top 8, there’s only one foreign invested company [Dong Feng] which is a joint venture and [Cummins] and a local company in China. The rest are all local companies, companies that nobody here has ever heard of. But yet, [Yuchai] which is the largest of that group, this year will do 500,000 engines. [Cummins] which is a global leader does 890,000. So here’s a company in China that nobody’s ever heard of that’s already getting very close to [Cummins] size in terms of the number of engines.
So to answer your question, when I talked to the CEOs of those companies, see I get a very good insight into what they’re doing. When I talked to them and some of them are state-owned enterprises or part of the state-owned enterprises. So I not only hear what they’re thinking about for their company, I hear what the government is thinking about, I know where they’re headed, with their businesses, so that gives me a very good clue.
And then, and a lot of those lessons that I learned from talking to them can be extrapolated to other industries. And then, of course, it doesn’t take long to start looking at other industries and see the same kinds of patterns developing. So there’re plenty of examples there to give you the hint as to what’s coming down the [pipe] if you have the time and have the access to take them and to see those hints.
Recorded on: September 22, 2008
If you see diesel truck on the road in China, it most likely came from Perkowski’s company.
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