Xizhou, a small town in Xiangshan County, Ningbo City, Zhejiang Province, is home to a big dream come true.

It’s the headquarters of auto-parts supplier Huaxiang, a name that translates as “soaring China,” a small business that has grown into a global leader in vehicle interior and exterior trim, including world-class walnut car panels for luxury brands like BMW.

To explore the grassroots power underpinning China’s local auto industry, Shanghai Daily recently talked with Huaxiang Group Chairman and founder Zhou Cimei. Following his interview are comments from two of the company’s foreign executives.

Zhou Cimei

Q: Huaxiang is among the top 500 auto parts suppliers in the world now. To what do you think the company owes its success?

A: Last year, we pulled in nearly 16 billion yuan (US$2.6 billion) in revenue, up 19 percent from 2013. It was a very impressive figure considering the slowdown of China’s economic growth and auto industry sales expansion, which were both in single digits. I have confidence that our strong momentum will continue this year, with revenue of 20 billion yuan and profit of 1.5 billion yuan.

We are able to withstand the volatile market climate because of our mindset of always staying ahead of the game.

We ventured into the auto-parts supply by making air-conditioning parts for Volkswagen Santana. It was the first joint-venture sedan ever made in China, and our product was the first localized offer of that kind. It was not our invention, but it was a good imitation.

Thus, we had a very good start in the mid- to high end of the market, and we kept sinking our roots deeper. That is a better place than the low end of the market for us to have pursued our technologies and brand reputation. Huaxiang has never bothered to explore the low end.

Cheaper prices give China a big advantage in auto-parts manufacturing. But that is not always the name of the game. Quality, service and innovation are becoming more important than ever.

We set aside 3 to 4 percent of revenue for investment in research and development every year. One of our focuses is on lightweight materials to replace wood for interior trim, such carbon fiber made from bamboo, a plant in abundance in Xizhou.

I always bear in mind where I come from. Huaxiang started as a private enterprise from a humble background. We are on our own, which gives us more flexibility and allows more initiative than state-owned enterprises. We are willing to learn, to try, and to recognize and fix our mistakes. We are a firm believer in the market economy.

Q: Back in the early 2000s, Huaxiang expanded into vehicle making, but that didn’t last long. The SUV segment it explored then has become a big money spinner today for many carmakers. Do you regret your decision to exit that market?

A: Not really. We were far from ready to make cars at the time, though we did manage to put some into production.

What we made was similar to the Toyota Prado SUV, at only one-third of its price. We even conducted test drives across the country, but I eventually called the project off.

The name of the game among domestic carmakers at that time, and even now, is price. Great products with no big names backing their reputation have very little room for profit. I decided it was too risky to continue and I should stick to what I know best.

Though Huaxiang doesn’t make cars anymore, it has a stronger presence than ever in the auto-manufacturing world. In almost every major car model, there are Huaxiang products, be they air-conditioning parts, walnut trim, instrument panels, liquid tanks, front carriers, exterior parts, air ducts, interior trim, door sills, seat shields, wheel covers, sun roofs, spoilers or ABC pillar trim panels.

Q: You seem very laid back as the head of such a big company. How would you describe your management style and your corporate vision?

A: A company exists because of all the people working there. I have always thought a lot about how to harness their talent and bring out the best in Huaxiang.

The bigger a company becomes, the smaller the role of a single person. One can stretch oneself only so far. And I am already over 70.

I was happy to see Huaxiang expanding its footprint across China — to Changchun, Wuhan, Chongqing, Chengdu and Guangzhou — following the expansion of carmakers, and eventually to other continents through mergers and acquisitions.

We now operate factories in Europe, mainly Germany and the UK, and in the US. To run a company with such international presence, I had to hire foreign experts and rely on English-speaking Chinese as my way of communication. I myself don’t speak English.

I have two sons, Zhou Minfeng and Zhou Xiaofeng, who are in their 40s. They have been working at Huaxiang since the 1990s, starting at the ground level. They are now my best right-hand men. They each lead one public company of Huaxiang Group: Huazhong Holdings Co, listed in Hong Kong, and Ningbo Huaxiang Electronic Co, listed in Shenzhen. The three of us run different plants together as a family.

Q: What about the future? Manufacturing seems quite an old-fashioned business to the children of founders. In China, the next generation of entrepreneurs prefers to pursue careers in the Internet and finance.

A: That’s true not only in China, but also in the US. The American Northern Engraving Group, an over 100-year-old specialist in nameplates and trims with Tesla on customer list, agreed to a takeover by Huaxiang in 2011 because its owner had trouble finding heirs to his business.

What happens if my grandchildren are not interested in carrying on Huaxiang’s business? I won’t force my will upon my descendants. I will always tell them to go follow their hearts.

I hope that by growing up with Huaxiang, they will see the value of manufacturing. It is the foundation and hope of our country.

I believe in the ancient saying that no prairie fire can destroy the grass. The shoots reappear in the springtime.

Karsten Brast

German-born Karsten Brast, general manager of Ningbo Huaxiang Automotive Research & Development Co, last year won China’s Friendship Award for foreign experts who contribute to the country’s economic and social progress.

Brast joined Huaxiang in 2011, where he was a motivating force behind the company’s development of lightweight materials, such as carbon fiber interior trim.

“I was drawn by Huaxiang’s willingness to aim for a global market. It was a challenging yet exciting task,” said Brast, who helped up the Ningbo Huaxiang Automotive Research & Development Co, four years ago.

“We are also setting up smaller R&D centers outside of China to support Huaxiang businesses in North America and Germany,” he said.

Huaxiang started pursuing its overseas ambitions by buying the British company Lawrence Automotive, an over 100-year-old manufacturer of wood veneer panels in 2007.

At first, it was hard for Huaxiang, which had limited experience outside of China, Brast said. Integrating with a foreign business meant learning to deal with Western labor unions, for one.

“Huaxiang has a lot of good staff, but not enough people with the international exposure to run a multinational company,” Brast said.

Huaxiang group now has over 2,300 foreign workers and executives.

It has set up training programs, including language courses, for senior Chinese managers at develop their global perspective at overseas branches, Brast said.

Many of their visits are paid to Germany, where the company has acquired several companies, including HIB Trim Part Solutions Group, which supplies carbon fiber interior trim to BMW, Daimler and Volkswagen.

Richard Zychowicz

French-born Richard Zychowicz has been working since 2012, based in Xizhou, as finance manager of Huaxiang’s joint-venture plant in Chongqing with SMR, a leading producer of exterior mirrors.

Though his Chinese language skills are still quite limited, he has tried to assimilate into the local community by renting his own house instead of staying in Huaxiang’s self-run hotel.

The biggest difference between working here and in Europe is mindset, he said.

Coming from a mechanical engineering background, Zychowicz was a financial controller for the Western business of SMR before it underwent restructuring and sent him to China to supervise a new branch of its joint venture with Huaxiang in Chongqing.

“Chinese people are very keen to learn,” he said. “They are interested in new things. In the US or Europe, when you need to change something, the first reaction might be, ‘What we do now is much better,’” Zychowicz said.

The joint venture where he now works for is the most profitable in the SMR group, making world-class products not only for the Chinese market but also for export to Japan.

“The profit of a company is the lifeblood of its employees,” he said.

He said a company has to be wary of technology for technology’s sake. Often times, there is no market for something new. People spend a lot of time searching for perfect solutions, only to find they usually don’t last for more than five years, Zychowicz said.

In emerging markets like China and India, people never think they are done. The market is constantly evolving, he said.

Huaxiang and SMR’s joint venture is aiming to take 30 percent of China’s car mirror market in the next two years. The strategy is based on cost. The joint venture is trying to localize parts made overseas and apply innovative materials.Though budget-conscious as a finance controller, Zychowicz doesn’t flinch at splashing out funds on promising technologies. Maybe one day, car mirrors may become screens, a trend portended by futuristic motorbike helmets and Google glass.

“This is something we need to prepare for in advance,” Zychowicz said.