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Kian Chue Hwa

Singapore

Growth through partnership

“I don’t think we can concentrate any more only on one industry and just one model type or just one market.” With this realization, Ivan K. H. Lin initiated an important change in strategy at the commercial vehicle spare parts dealer Kian Chue Hwa in the late 1990s. The global economic crisis in 1997/1998 had just hit the markets hard, especially in Malaysia, Indonesia, the Philippines, Singapore, South Korea and Thailand. Kian Chue Hwa escaped the subsequent recession primarily due to new business ideas. “Since then I have developed a few more industries, a few more markets within the region”, the current managing director describes what is meanwhile the very broad-based positioning of the company.

Good relationships as a base

The change in strategy of Kian Chue Hwa was only possible with the right partners. In the mid 1990s, even before the Asia crisis affected the markets, the company consolidated the distribution partnership with Diesel Technic. “With Ralf Nädtke, now Director Sales Overseas, we shared some ideas and our business with Diesel Technic actually grew tremendously”, Ivan K. H. Lin remembers today. Another big growth spurt followed in 2014 with the opening of Diesel Technic Asia Pacific Pte. Ltd. in Singapore. ”By bringing the goods closer to us, by giving us more and better logistical support, Diesel Technic actually helped us to expand the business. It has been three years since this subsidiary, including the warehouse, was set up, and I think the results show that our business is improving and fits very well to Kian Chue Hwa’s expansion plan.”

Today, some 40 years after its founding, and after the successful merger with Kian Ann Engineering in 2007, Kian Chue Hwa is the most established commercial vehicle spare-parts dealer in Singapore. The tradition of the company and the founder family goes way back. It originates from the ethnic group of the Henghua from the Chinese province of Fujian. Since the early modern period, Henghua has traditionally been active in the spare parts trade - initially for rickshaws and bicycles, now consistently for motorized vehicles. “My father started working in the spare parts business because we are Henghua, and in 1976 he had the opportunity to start a business on his own”, Ivan K. H. Lin described the founding of the company. In the early years, the commercial vehicle spare parts trade in South-east Asia was dominated by English and Japanese vehicles. At the beginning of the 1980s, Kian Chue Hwa concentrated briefly on Japanese vehicles. While other companies stayed with this, Kian Chue Hwa had already switched to the Mercedes-Benz brand in the mid-1980s. One reason for this was the flourishing forestry in Southeast Asia. “So when I joined the business in 1994, everybody knew Kian Chue Hwa as a Mercedes-Benz spare parts specialist. Now we are not only doing Mercedes-Benz, we are also doing other European made vehicles. Moreover, we are not just doing forestry. We are doing public transport and other industry like power generating, construction etc.”, Lin described the extended orientation of the spare parts dealer.

Market knowledge as a key factor

Kian Chue Hwa operates at locations in Indonesia, Thailand, Myanmar and Malaysia and would like to offer greater customer proximity with more subsidiaries in future. But how does Kian Chue Hwa manage to expand, even in economically difficult times?  Ivan K. H. Lin believes that, in addition to collaborating with the right partners, Market knowledge of the market in which one wants to offer one’s goods is important. For example, Kian Chue Hwa refrains from competing the mass market. “Why go in and compete with market leaders in those mass market products?"

And how does one recognize the right partner for one’s expansion plans? “For a few years the market has not been good, but our business with Diesel Technic is growing steadily. If I were to use a few words to describe Diesel Technic and their current team in Singapore, I would say that they are very fast, they are very cooperative, they are very effective, they are very supportive, they are very open to ideas and we appreciate their support. Speed is very important and the stock availability becomes more and more important. From my purchasing team’s perspective, they are very comfortable developing the business with Diesel Technic. From my sales team’s perspective, it is easy, because Diesel Technic has a very good range and strong product brands. Because Kian Chue Hwa is expanding in regions, we encounter a lot of new vehicle models, new products that we don’t have in our stock and Diesel Technic gives us the range of products to supply.”

“But no one is perfect, Diesel Technic has to improve continuously, as well”, says the managing director of Kian Chue Hwa. And just as the South-east Asia commercial vehicle spare parts dealer has constantly improved its business over the years, Diesel Technic is working on the continuous improvement of the partnership, so that Kian Chue Hwa and Diesel Technic can grow further – together.