Background
Lu Guanqiu was born in 1945, Xiaoshan, Zhejiang Province.
冠球 鲁
Lu Guanqiu was born in 1945, Xiaoshan, Zhejiang Province.
Lu Guanqiu left school at the age of 15 and worked for three years as an apprentice in a blacksmith’s shop.
In 1965 he established a small repair shop for agricultural machinery, producing items such as ploughs, harrows, universal joints and so on. In 1969, Lu started his own operation, which later became the Wangxiang Group. By 1979, he had realized that his small workshop would never have chance to grow if it remained in the same business. At that time, with a strong belief in the huge potential market for automobiles in China, Lu strategically reorganized his business towards the production of automobile and industrial bearings, and the company was renamed after its main product, ‘Wanxiangjie’ (joint drive shaft). In 1983, Lu took a mortgage on his property and signed a three-year contract with the commune to run the universal joint factory.
In the 1980s, Lu excelled in manufacture and management of the company. During those years, despite the fact that the cost of steel more than doubled, Lu managed to keep the price of his products unchanged, while achieving an average annual growth rate of about 40 percent and a six-fold increase in employee compensation.
In 1988, Lu Guanqiu bought out shares of the universal joint factory from the local government with RMB15 million. He started to acquire smaller factories and combine them into a group. In two years he had acquired eight enterprises through buying shares, or through mergers and acquisitions, and in 1990 Lu founded the Wanxiang Group, which was officially approved by the Zhejiang provincial government. The new Wanxiang Group focused mainly on developing the product lines of Cardan-type U-joints, constant velocity drive shafts, transmission shafts, bearings, needle rollers, and oil seals for both the OEM and after-market sectors.
In December 1992, the group reorganized its leadership team, with Lu Guanqiu as the chairman and general manager, and made its affiliated companies independent legal entities. In November 1994, Wanxiang Qianchao Holding Limited, an affiliate of Wanxiang Group, launched its IPO on the Shenzhen stock exchange. In the same year Wanxiang America Inc. was established in Chicago. In a relatively short time, Wanxiang became a global market player because of its large international orientation and numerous spin-offs in the 1990s. In 1996, when the Wanxiang Group went through another restructuring, Qianchao acquired 60 percent shares in seven auto parts and components companies. In 1997, Wanxiang Europe and Wanxiang South America were founded. In the same year, Wanxiang received an order from General Motors (GM) in the USA, making it the first Chinese auto parts supplier for first-class whole-car manufacturers.
In total, the Wangxiang Group incorporated over 30 subsidiaries by joint ventures and mergers andacquisitions. Wangxiang is themajority shareholder in Universal Automotive Industries in Alsip, Illinois, which produces components for brakes. The group is also majority stakeholder of Rockford Powertrain Inc. in Lovepark, Illinois, which also produces universal joints. Furthermore, Wanxiang maintains strategic alliances with technical licensing partners to establish a global distribution network. Its main products have a 70 percent market share in China, and it supplies both GM and Ford.
Wanxiang Group Company is well diversified. In addition to the automotive market, Wanxiang is also involved in largescale agriculture, aquaculture, real estate development, infrastructure development, and a unique China Bridge program to aid US companies doing business in China. Today the group has about 40 000 employees and an annual turnover of US$4.2 billion. Since 1996 Wanxiang has registered 42 new patents and mass-produces more than 300 products.