The Qingdao YTE plant in Huangdao

Qingdao YTE Special Product Co, part of the TRF-owned York group, has found its place in the China sun by building bonds with customers, employees and government institutions

You have to respect China and its culture before you can learn anything about either,” says Manoj Gupta with a belief born of experience. The country head of Qingdao YTE Special Product Co, the China arm of the global York group, recognises how crucial the respect factor is in ensuring that the enterprise he heads realises its objectives and potential.

“That old prejudice about China being low on cost and, hence, low on quality does not hold true ... the reality is far, far different.”

Manoj Gupta, country head, Qingdao YTE

An acute understanding of China and its business landscape has been a valuable enabler for Qingdao YTE, one of the two factory facilities of York, which makes and markets axles, suspensions and other accessories for truck trailers. The Tata link with York was cemented in 2007, when Tata Steel subsidiary TRF acquired a 51% stake in York Singapore. It was sealed in 2012 after TRF purchased the remaining 49% stake.

Headquartered in Singapore, York has manufacturing plants in China, through Qingdao YTE, and in Pune in India. It also has a presence in Australia, Thailand, South Africa and Turkey. With an employee count of 220 and revenues of about $55 million in 2016-17, York is among the top three truck trailer brands in Asia and it is a leader in the heavy-duty mining and heavy equipment transportation segments.

Qingdao YTE is a standout component in the business spread crafted by York, which got started in China in 1994 as Qingdao YTE Special Products in the city of Qingdao. The China engagement was enhanced in 2012, when York Transport Equipment (Shanghai) was set up. These two businesses were merged in late 2015 to create Qingdao YTE, with a brand new facility in the Huangdao district.

The sailing has been smooth for Qingdao YTE in the time since. With a product range of axles and suspensions for the 9-to-25 tonne class, it services the international and domestic markets and also sources axle components and trailer parts from China for York’s other enterprises around the world. Qingdao YTE has ensured that it stays on an even keel by paying extra attention to the relationships aspect of business, be it with customers, employees or government bodies.

RAPPORT WITH OFFICIALS

“This is especially important when interacting with government institutions,” explains Mr Gupta. “There are so many changes in rules and regulations — and some of these can happen overnight — that you need to have a close rapport with local officials. They are an integral part of the business and they are inclined to support us. Being part of the Tata group is a big help in the context; they are always ready to back you.”

About 80% of Qingdao YTE’s products are exported and that’s where the pressure to perform is highest. “There are challenges, for sure,” says Mr Gupta. “Some of our export markets are saturated, the demands of trailer manufacturers keep fluctuating, and there are other issues as well. We have been able to handle these without too much discomfort.”

In the domestic market Qingdao YTE — which recently upped its capacity to 50,000 axles a year — has been betting on the region where it is located, the north of China. “We don’t go after every lead; the country is too vast for that, so we concentrate on the biggest customers,” says Mr Gupta. “The demand for trailers is flattening out, but we are on track to enhance our business in the northern regions. That’s where the requirement is, that’s where our customers are, and that’s where we are known.”

Mr Gupta has been in China for just over two years, enough time to reach conclusions on facets of the country that continue to be misread abroad. “That old prejudice about China being low on cost and, hence, low on quality does not hold true. You could be forgiven for thinking along those lines if you’re outside China, but the reality is far, far different. Quality here is as good as anywhere in the world and costs are no longer on the lower side. We’ve had to rethink our approach due to this.”

It is the team at his disposal that has galvanised Qingdao YTE, of that Mr Gupta is certain. “We have 78 employees in China — 14 of them female — and I’m the sole non-Chinese among them. The way I see it, all of us are Chinese. I’ve come to feel as Chinese as any of my people. I don’t really speak the language but I can communicate with my workers through gestures, body language and the bit of Chinese that I know.”

Combining the two previous operations to form the freshly minted Qingdao YTE posed organisational difficulties, and here again Mr Gupta credits the employees under his care for their response. “We had to get many of our people to relocate from Shanghai to Huangdao and that taught me a lot about the Chinese people and how to communicate with them. Being a Tata person, you carry the values of the group in you and that was a huge advantage in sorting out issues here. The merger going off smoothly was an immense success for York.”

Qingdao YTE recorded sales of $14.2 million in 2016-17 and it expects to touch $35 million by 2022. Mr Gupta has no doubts the business will get there and beyond. “The Tata Business Excellence Model has and will be our guide in this mission. We have a hardworking, cooperative and always positive workforce and that gives me hope. The prospects are great.”