As early as 1887, when “Made in Germany” label has been the UK as inferior products, and now people talk about “Made in Germany” will recognize it represents the first-class quality products. In addition to “craftsman spirit” of our commonplace, but behind the rise of the German manufacturing industry as well as the kind of impetus? The question worth considering, this paper attempts to analyze Germany’s largest IPO by the company in 2018 – to answer the answer Knorr’s upbringing, on this issue. I think that, through in-depth analysis of these German manufacturing sector counterparts, to our understanding of long-term development of China’s manufacturing , can see around corners, a lot of inspiration. Invisible Champion this year, October 12, German brake system manufacturer Knorr-Bremse (Knorr-Bremse) in Frankfurt, Germany, stock exchange, which has become in recent years, Germany’s largest IPO project, by the renowned investment bank Deutsche Bank, JP Morgan and Morgan Stanley underwriting. After a short time the market value of listed Knorr exceeded 100 billion yuan. After the 2008 global financial crisis, Knorr-Bremse to maintain steady growth. In 2009-2017, the annual compound growth rate of 11% in revenues in 2017 revenue up 6.2 billion euros (equivalent to about 48 billion yuan), while the railway industry worldwide 2010 – only about 2% compound annual growth rate of 2016, company performance far exceeding the industry growth rate; gross profit compound annual growth rate of 11%; while net profit grew more pronounced, 2009 – 2017 CAGR of 28% in 2017 net profit of 660 million euros (equivalent to about 5.1 billion yuan). Knorr-Bremse’s main business sectors in which the growth rate is not high, its growth rate far exceeding the industry has made, and indeed heart admiration. From a profitability point of view, Knorr-Bremse is the leader in the manufacturing industry. 2009-2017, the company’s gross margin remained at a relatively stable level, basically in the range of 25% -28%; while net profit margin to maintain the upward trend, in 2009 net profit margin of only 3.3%, while the basic 2016, 11 in 2017 %nearby. In the global manufacturing sector, 11% of the net profit margin of belonging to a higher level, also reflects Knorr products with high technical barriers from the side. But even this year, Germany’s largest IPO, and by the famous investment bank underwriting, market capitalization of $ 100 billion breakMark, the hidden champions of the manufacturing market, the same as its previous obscurity, did not attract much attention of domestic investors.
 the basic situation of Knorr-Bremse Group, headquartered in the industrial city of Munich, Germany, was founded in 1905, has over 100 years of history. Today, Knorr has grown to be reckoned with multinational corporations. In the world with approximately 28,000 employees, its subsidiaries located in more than 100 areas in over 30 countries around the world, with 36 service centers, 80 per cent of the company opened outside Germany. Since 1985 began to develop the Asia Pacific region, Knorr-Bremse Group’s business in the Asia Pacific has expanded to more than 20 regions, with more than 6,000 employees in China, Korea, Japan, India, Southeast Asia and Australia and other countries, the number of employees accounted for 21% of the global total Knorr-Bremse Group. From the income distribution, the Asia-Pacific region has become constitute a very important contribution revenue reached 41%, with China accounting for up to 20%.
 business case Knorr-Bremse is the world’s leading manufacturer of rail vehicles and commercial vehicle braking systems. As a pioneer of technological development , as early as the beginning of the establishment 110 years ago, began to engage in the development, production and marketing of the train braking system, relying on technological innovation and perseverance, Knorr become train system the absolute leader in dynamic systems CONTROL ENGINEERING China Copyright , its braking system KE 1955 invention became the new standard of the international Union of Railway, first-class enterprises to develop standards, Knorr-Bremse enough to see the train system action status field. In 1985, when the company is facing development bottlenecks, Heinz Hermann Thiele acquired a majority stake in the company CONTROL ENGINEERING China Copyright , the company will be divided into rail brake systems sector and commercial vehicle braking systems sector . In 2017, the company’s in-orbit delivery of parts revenue of € 3.26 billion, accounting for 53%, commercial vehicle spare parts in the field of revenue was 28.9 billion euros, accounting for 47%; currently, in the field of rail slightly higher than the profitability of commercial vehicles field.
⑴ railCross-section in the rail plate product company fortune in the braking system, now we have a complete spectrum of products, including brake systems, door systems, HVAC system (the HVAC), an auxiliary power supply, the control element, the wiper system, friction materials, steering frame diagnostic systems, driver assistance device and driving simulation equipment, etc. these products are widely used in high-speed rail, train wagons, locomotives, passenger trains and city subways. At present, the company is in the brake system, door systems and HVAC products are in three major world market share position. According to company estimates, in 2017, Knorr-Bremse rail vehicle in the world with sales of braking systems for about 50% market share, this market segment is the largest supplier, followed by the United States and Pennsylvania Will Mo Ding County Wabitaike companies account for only about 15% of the market share (in the company in 2016 to gain control of Fa Weili transportation company, hereinafter referred to as: Wabitaike / Fa Weili company). From a regional perspective, Knorr-Bremse is the number one supplier in Europe, the Americas and rail vehicle braking system Asia-Australia region, accounting for about 50% of the three regions of the rail vehicle manufacturing system market share, respectively, in 2017, 45% and 45 %, ahead of all major competitors Wabitaike / Fa Weili company. In addition to the advantages of traditional old company took the lead in the brake system products, the company’s other rail products are doing well. For example, door rail system also has the highest global market share of 25%, second place Wabitaike / Fa Weili market share is only 20%; HVAC systems Knorr-Bremse’s market share has reached 15%, the same ranking World number one.
⑵ commercial vehicle sector Knorr-Bremse is also a leading supplier to the global commercial vehicle braking systems and control systems for all major commercial vehicle manufacturers worldwide delivery. Specifically, commercial products involves many sectors, including the brake system, shock absorber, a compressor, a gas engine management system, an air purification device, transmission systems, brake chamber, the system tools and diagnostics. Different from the rail sector product by the accumulation of independent research and development, commercial vehicle sector business also rely on acquisitions to expand. In 1985 the company’s business is divided into formal mass transit brake systems sector and commercial vehicle braking systems sector. In 1999 the company acquired the Robert Bosch GmbH commercial vehicle braking department, the company make up for shortcomings in the electronic brake control, and in 2002 acquired theBendix Commercial Vehicle Systems, this enterprise is the air brake anti-lock braking system, the nation’s leading manufacturers of commercial vehicles. Segmentation systems, the braking and control systems, Knorr-Bremse global market share of 23%, the power assist system market share of 40%, combustion efficiency system market share of 23%, is an industry first place . In addition, commercial products in the company’s income share increased slightly in recent years, is now close to 50%.
growth trajectory  start-up and development (1905-1944) In 1900, founder George Knorr successfully developed a brake system K1 effectively reduces the braking distance train and solve the problem of braking the train shaking. In 1916, the company developed Kunze-Knorr truck brake systems that enable manufacturers to become Europe’s first braking system. In 1922, the company developed the first set of commercial vehicle air brake system and patented. 1931 ~ 1939, the company’s Hildebrand-Knorr (Kunze-Knorr system upgrade) train brake system has become the standard brake 17 countries. In addition, as of 1939, 90% are equipped with Knorr-Bremse braking device in all German truck 7-16 t’s.  post-war reconstruction and the re-emergence (1945-1984) In 1945, after World War II, the company’s Berlin plant confiscated and demolished, after the company moved its headquarters to Munich in the Bavarian. 1945 to 1953. The company will set a new site in Munich, re-development and manufacture of braking equipment in West Germany, leading the company to resume in the rail and commercial vehicle braking systems field, and invented a new brake system KE in 1955, it became the new international Railway Union standards. 1960-1980, with the AAR DB-60 valve for rail vehicles open the US market.  grown into a global enterprise (1985-2017) in 1985, when the company is facing development bottlenecks, Heinz Hermann Thiele acquired a majority stake in the company CONTROL ENGINEERING China Copyright , the company divisionBraking system for the rail transport sector plate and brake systems for commercial vehicles. Since the 1990s, the company enhances commercial areas of strength through mergers and acquisitions, and carry out large-scale international expansion. In 1999, the company acquired the commercial vehicle braking department Robert Bosch GmbH, the company to make up for shortcomings in the electronic brake control. In 2002, the company acquired Bendix Commercial Vehicle Systems, air brake anti-lock braking system, the nation’s leading manufacturers of commercial vehicles. In 2010, the company’s strategic acquisition of Sigma Coachair Group, to strengthen its capabilities in the field of air-conditioning; In addition the company also set up factories in the Czech Republic and Hungary. In 2014, the company acquired the rail auxiliary power supply manufacturer Transtechnik GmbH & Co. KG, PCS Power Converter Solutions GmbH and Selectron Systems AG, to expand into the field of rail vehicle control. By 2015, the company created 110 years. Joint ventures in emerging markets such as China and Russia. The final special allocations and Services Company and Guangdong Knorr-Brehm-State Equipment Co., Ltd. cooperation braking system of railway vehicle systems, HVAC and door systems, enhance the company’s products in China and service network. Proposed train control and monitoring systems Selectron Systems AG Switzerland Aires cooperation with automation solutions, will expand into the rail vehicle control, diagnostic and automation components and subsystem solutions for rail vehicles. 2016, with the German Bayer Leverkusen TMD, by virtue of the friction shoe, friction brake pads and other friction materials rail transportation industry reinforces Knorr dominance as the system supplier. In cooperation with the British GT Group Peterlee, to achieve engine parts, exhaust gas recirculation valve for an exhaust brake and thermal expansion valve management and commercial vehicle driveline business development into new business areas and enhance the company in Europe and the status of the North American market. Cooperation with Thailand, Germany and Germany, revolutionized the automotive steering technology. Microlise together with the development of telematics and logistics system, the introduction of Knorr-Bremse Truck service even ProFleetThen used to provide a range of security features, better travel planning site design also designed for the driver remedial classes. Pamplona, Spain Icer Rail and co-developed railway organic and sintered brake friction material (friction and brake shoe friction pad). 2017, the company added rail and commercial vehicle traction technology enables the production portfolio has been expanded, the successful expansion of the potential synergies between the rail vehicle systems and commercial systems. Bosch plants in cooperation with the Japan World societies, improve the systems and components for the Asian Highway commercial vehicles manual and automatic transmission, dual clutch transmission highway commercial vehicle exhaust and brake products for the independent aftermarket enhance the company’s automatic transmission product availability, especially in the fast-growing Chinese market demand.  listed to open a new journey (2018-) in 2018, and FAW Car Company to achieve strategic cooperation in commercial vehicle braking system, AMT and AMT calibration products and automotive chassis components, steering systems in other areas, intelligent driving, etc. . HAD cooperation with Continental Automotive Systems and Components Limited, a leading supplier of commercial vehicle market HAD system. Won the friction brake materials used in rail vehicles and industrial use of R & D and production patent, the company achieved a strategic move to expand the area of investment brake friction material rail vehicle.
The secret of success  – led research and development Knorr performance in the field of innovation has never been in the spotlight more often unknown to promote social progress. Knorr implementation of independent research and development and innovation is not only able to provide customers a convenient, enhance customer satisfaction, and even the definition of R & D can lead the development of an industry. Throughout the history of Knorr-Bremse it is a process of continuous innovation, relying on independent research and innovation shorten the product development cycle, the most effective way to maintain market leadership of Knorr-Bremse. For example, the early 19th century, there is a problem deeply troubled European authorities, that is, how overloaded truck safety brake. Therefore, the beginning of the decade the company was founded Knorr, Georg Knorr spent a lot of effort to develop new truck braking system, in 1916, after years of poverty, the company has finally developed a revolutionary Kunze-Knorr truck brake system, with this became the first European manufacturer of braking systems. In 1922, the company developed the first set of commercial vehicle air brake systemEC and applied for a patent. The fruits of numerous innovations: 1931 – 1939, the company’s Hildebrand-Knorr (Kunze-Knorr system upgrade) train brake system has become the standard brake 17 countries. In addition, as of 1939, 90% are equipped with Knorr-Bremse braking device in all German truck 7-16 t’s. In fiscal year 2017, Knorr-Bremse will be 360 million euros, accounting for 5.8% of total revenue into R & D activities. Of which 210 million euros, ie 6.2% of revenue related products to be put into mass transit system product development, another 5.2% of 150 million euros related product revenue that is being put to commercial vehicle sector product development. As of December 2017, the company a total of more than 3,700 R & D staff (including engineers, technicians, retailers).  multiple concentric strategy to break the curse of the ceiling in the capital market industry, spare parts for the company in addition to the core technology, the second question we are most concerned about is the industry ceiling. Since most of the parts industry market segments the company will be faced with the problem of low capacity, to become the biggest stumbling block to long-term investors to hold parts company. The Knorr-Bremse “unknown” to grow into a exceeded 100 billion company, the key lies in its own strength after compaction, by “concentric diversification” strategy to independent research and innovation as the core, actively carry out strategic cooperation in related fields, industry continue to break the ceiling to solve the continuity and growth of the industry cyclical problem. From the beginning to make the rail brake system to expand door systems, HVAC, etc., corresponding to the market space to expand from about 4 billion euros to 12 billion euros to expand three times. Also extends the company’s business from the field of rail products to the commercial vehicle industry, market space corresponding to approximately 60 billion euros. So far, the company’s products correspond to the current market there are 18 billion euros (equivalent to 140 billion yuan), enough to prop up the company’s valuation of one hundred billion yuan.
 manufacturing and service both in manufacturing due to its characteristics 2B, so very high demands for quality services. Knorr never just a pure manufacturer to occupy it as an important after-sales market share of the company’s strategy to provide a complete system of after-sales service for customers, for the diverse needs of customers to provide precise depth solutions.Such as the introduction of Knorr-Bremse commercial vehicle networking, greatly enhance the product breadth of service coverage, to facilitate the timely and quickly respond to customer needs. Because of this, Knorr-Bremse makes this a hundred years old have a large number of new enterprises can not have the advantage – close and lasting customer relationships. Rail product areas: Knorr-Bremse in the world has a total of 36 company-owned service centers of rail products, these products service center to complete the repair and maintenance work in the same place. In addition, Knorr-Bremse in the world has a total of 20 located centralized customer service area of the site to provide full support to adapt to local market needs.
field of commercial vehicles: the Knorr-Bremse has Aftermarket services include about 1,600 service centers, more than 500 trucks and 17 workshops, including a warehouse. The company a total of 1100 independent aftermarket customers (not including export wholesalers and wholesale company) and 200 original equipment customers.
Implications for China manufacturing China’s fastest and largest rail equipment market as the world’s growth, but private rail parts market capitalization of no more than 10 billion, only a few state-owned enterprises more than 100 million, but in 500 below one billion. There are two main reasons, first, although most of our rail equipment replacement parts are achieved domestically (No. renaissance nearly 90% localization rate), but the high technical barriers, such as large-value accounting for the cost of the vehicle 10 % or so of the brake system according to Reich Noel still other overseas suppliers; another reason is that the rail parts companies basically no small breakthrough industry capacity issues. We use a larger perspective, look at the entire equipment manufacturing industry, Knorr-Bremse is actually a microcosm of German manufacturing. German success achieved in the context of economic globalization, more dependent on those thousands of little-known small and medium enterprises, which play a prominent role in the German economy, business is vividly called “hidden champions” . For example Bada Group, Bernard Industry Group, Böllhoff Group, Brose Group, Klas, Dürr Group, Eberspächer, Enercon, Hella Group, Gildemeister Group, Hammer, Herrenknecht , heroic, Keyi Si ……
in addition to the emphasis on research and development, business focus, artisan spirit, Knorr-Bremse’s success to the development of China’s equipment manufacturing industry there are at least some enlightenment as follows: ⑴ Chinese power equipment manufacturing industry from change to power, Germany must have a number of similar such “hidden champions” of birthStudents. In addition to often say that the state support, research integration, off to the virtual reality of these major areas, the capital of these enterprises should be given more time to back the growth process of hidden champions Germany, the tens of decades of years, although China catch up speed called for the wonders of the world (most of the domestic manufacturing company founded in 1990, after all the time, so far less than 30 years), apparently can not keep up its pace of growth capital expansion appetite. ⑵ backed by a complete industrial chain will help these small businesses bigger and stronger. For example, the development of Knorr-Bremse to catch the peak of the rapid development of European rail transport, with the rapid development of the industry has laid a leading position in the industry, the follow-up have the opportunity to break through the ceiling of internationalization and diversification. In addition, a large part of the German manufacturing industry, “hidden champions” are the automobile industry chain-related, Germany has the world’s most powerful brands Volkswagen cars, automobile plants and plant parts of these common achievements. China’s manufacturing industry, the electronics industry chain nearly 10 years we have witnessed the rise of Chinese companies are part of the Apple industry chain has become a new generation of “hidden champions.” In addition to the electronics industry chain, China has many industrial value chain volume, large domestic market characteristics Control Engineering Copyright , such as automotive, shipbuilding, appliances, rail transportation, etc., are cultivating ” invisible champion “and” cradle. ” ⑶ internationalization is the only way. Germany, grew up in a small country confederation of environmental history at any business wants to grow must be international, integrated into the international pursuit of German entrepreneurs in the blood and remains to this day. The other hand, China’s manufacturing industry, the degree of internationalization is still in its infancy, with exports accounting for over 10% of corporate revenue rare, let alone set up factories overseas, the overseas service centers. But with “all the way along” policy to promote, trade friction so that companies recognize the importance of diversification of exports, this situation is changing marginal. Since 2018, despite continued internal and external problems, but China has a strong manufacturing strength and huge accumulation of “strategic depth”, we should still have full confidence in China’s manufacturing sector. In the context of economic growth center down, and capital markets should give these equipment manufacturing enterprises, especially small market space parts enterprises more tolerance and time, allowing them to accumulate technology down to earth; at the same time, companies It should be realized that staking their claims, streets paved with goldThe extensive growth period has gone, should do a good job doing fine with a more focused attitude.