Under the Hood

Whenever a destination is reached, the engine that powered the journey is usually celebrated for its effort. Often unsung are the individual components that comprise that engine, the absence of which would have made the achievement impossible.

It’s a familiar tale in the business world, where team efforts, while commonplace, rarely result in shared glory. But that doesn’t mean those moving parts were any less crucial.

And then there’s MAHLE, the German-based automotive parts manufacturer that straddles both worlds. Engines and thermal management and electrification businesses from all over the world benefit from its output, which has made the company one of the largest suppliers of its kind.

In 1997, as MAHLE was rapidly approaching its 80th anniversary, the company first made inroads into China. Today, MAHLE China enjoys more than 30 production sites and two modern R&D centers across 20 cities as its footprint, as well as partnerships with a variety of Chinese companies.

MAHLE’s entry into the Chinese market coincided with the beginning of the nation’s journey into the automotive market, and Lydia Shen’s career also grew with it. In the past 27 years, she has had profound experience in the automotive and electronics industry, from engineering, R&D, sales, operations to business unit management.

In the engineering sector, she worked with a team applying global technology in a local market. With the R&D team, she helped create innovations for local demands. Within sales, she built up a strong, long-term connection network in the auto industry, while the operations field grew her knowledge of lean manufacturing and cost efficiency.

This accumulated experience allowed Shen to become a high-performing executive leader, achieving topline growth and profitability improvement.

The auto industry’s relative youth means that many of its best and brightest have worked together at some point. When Shen joined MAHLE China as President, she found herself surrounded by familiar people.

“I feel like I’ve been here a lot longer than I actually have,” she says. “The atmosphere here is good, the people care. Since I joined I’ve been working to enhance the company mindset, to improve our earning power. To change and prepare for the future, we as a unit need to grow together as a team with the same mindset. Together, we can make a difference.”

Changing Times

A decade ago, China’s automotive industry was in a golden era.

“Whatever you wanted, you could order,” Shen says. “But now, no longer. You have to be extremely outstanding in terms of competition, costs, technology, fast response and everything. The team needed to change the way it approached this new landscape, and that’s what I worked to do in my first year.”

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“MAHLE Group considers Shanghai Huafon Aluminium Corporation an excellent supplier. Together we’ve been committed to innovation and R&D for many years, and will jointly meet the opportunities and challenges in the future to achieve continued success.” – Guozhen Chen, Chairman, Shanghai Huafon Aluminium Corporation

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Another of Shen’s rolling start initiatives was the creation of strategic working schemes designed to align MAHLE China’s various units and functions. The result was a company-wide strategy focused on three key areas.

“Electrification is the obvious one, given the way the industry is going,” she explains. “Then there’s thermal management and solutions for internal combustion engines. We’ve worked with combustion engines for so long that it makes sense to continue to take advantage of our expertise in that area.”

By improving the efficiency of MAHLE China’s departments, Shen believes it allows the company to stay focused.

“Too many product lines and you lose focus, so now we have this overall group vision to realize by 2030,” she says.

So far, Shen’s approach is working. “The data speaks for itself. In terms of profit, we’ve actually quadrupled what we made last year,” she reveals. “You can see by just changing the way we work, changing our mindset and changing the focus, the results are there.

“If people can focus all their efforts toward one direction, then we can get the benefit from one source. It is just like water – though it is soft, it can cut through steel plates once highly pressurized.”

Transformation

However, as profits continue to grow, so do the company’s responsibilities.

“That’s something I want my team to keep in mind, which isn’t always easy in a company as experienced as ours,” Shen says.

“There are synergies vertically and horizontally. One business unit can make products for another while yet another makes the external purchases. That’s when we’re working together for what I call one team, one target, one future. Every business unit has its own target, but at the end of the day we’re serving the same market.”

The future Shen speaks of is the sustainably focused automotive industry of tomorrow.

“If we want to have a sustainable future, we need to promote and implement ESG actions,” she points out. “When I joined the company, ESG was not foundational to the region strategy.”

That’s no longer the case. In November 2023, MAHLE China took home the ESG Performance award at that year’s More Than A Market Awards, a showcase of the best corporate social responsibility initiatives by German enterprises in China.

“It’s not about our capability, it’s about the mindset. It’s about if we want to do it or not,” Shen insists. “When I arrived I said we needed to build a company where employees will achieve their dreams and the next generation will also want to join. Sustainability isn’t just about the environment, after all.”

MAHLE China has come a long way under Shen’s guidance, particularly in the way it works with customers, suppliers and partners. As a supplier itself, the company has a unique understanding of how to get the best results from its relationships.

“We learn from each other,” she confirms. “We rely on our partnerships to deliver the best solutions for the market. Supply wise, we’re all in the same boat, so keeping strong relationships is vital for everyone’s success.”

The automotive industry is on the move. What the destination will look like remains unclear, but Shen says that for MAHLE China, it’s all about the journey.

“With customers, suppliers and partners, together we will build a successful future.”