A production workshop of Chongqing Qiutian Gear Co Ltd. (Photo/Liu Yi)
Chongqing - Thirty years ago, Fu Zhongqiu embarked on an entrepreneurial journey with his 10,000 yuan ($1,405.62) savings, producing motorcycle gears and turning Chongqing Qiutian Gear Co Ltd into a well-known private enterprise in Chongqing.
Thirteen years ago, Fu Zhongqiu's son-in-law, Liu Yi, took the baton to begin writing a new chapter. Today, one in every five motorcycles produced globally is equipped with Qiutian gears.
Raising one’s child to become a business's successor can take decades. So what gave Fu Zhongqiu the confidence to entrust the family business to someone with no blood relation?
In 2005, at the age of 54, Fu has transformed Qiutian Gear into the largest motorcycle gear company in China. However, the company seemed to have hit the industry's ceiling, and to seek further development, it had to explore a new path and implement diversification.
At that time, numerous motorcycle companies in Chongqing, such as Loncin, Lifan, and Zonsen, were thriving in the real estate and related industries. Fu happened to come across a related industry upstream in real estate—building materials.
At the end of 2005, Fu Zhongqiu invested in acquiring a nearly bankrupt building materials company.
Fu spent a lot of time thinking about who could help him manage this new business. In the end, he thought his son-in-law Liu Yi was a good choice.
At that time, Liu was only 24 years old and was already the regional manager for Yunnan Baiyao E-commerce Co Ltd in Chongqing. With his efforts, Liu successfully placed Yunnan Baiyao toothpaste on the shelves of major supermarkets in Chongqing in a short period, impressing his father-in-law.
When Fu extended the olive branch to Liu, Liu felt some hesitation—his successful career left him with no need to take on this company nearly in bankruptcy. However, in the early 21st century, with innovation and entrepreneurship booming, Liu also felt it was time to step out of his comfort zone and face the challenges of the market.
At that time, the entire company had fewer than 20 employees. Liu constantly visited various building material markets with his products, and he was often met with indifference.
The other day, Liu and his subordinates visited the owner of a well-known chain of building material stores in the Wanzhou District of Chongqing. As soon as they arrived at the office, the owner glanced at him and said coldly, "We only sell branded goods here. What are you selling?"
"We can offer the same quality products at a lower price," Liu replied. He knew that the higher the other party's attitude, the more he needed to find a way to break through their psychological defense, even using price as the point of entry.
In fact, Liu Yi learned the technique of persistently persuading customers with an indomitable spirit from his father-in-law.
In June 1993, Fu Zhongqiu took out his family's only savings of 10,000 yuan and rented the mold-making unit of the Chongqing Medical Equipment Factory. He began producing motorcycle gears by leading a few workers and using several old machines, thus embarking on his entrepreneurial journey.
Initially, Qiutian Gears mainly did contract manufacturing, taking on small, low-priced orders that others were unwilling to accept. To find orders, Fu became a salesman himself, carrying samples door-to-door every day to promote them.
He was often met with rejection, but Fu never got discouraged. He kept promoting his products. Finally, a company owner was moved by Fu's sincerity and perseverance and agreed to test his products. Afterward, the products successfully sold, and Fu Zhongqiu earned his first significant profit.
Inspired by Fu's example, Liu Yi worked tirelessly without taking any days off during the first six months of taking over the new business. During the week, he visited clients, and on weekends, he was at the factory refining products with his team. A year later, the building materials company turned profitable, and within three years, the company had opened more than a dozen direct and franchise stores across various districts and counties in Chongqing.
In his early twenties, Liu revived a building materials company on the verge of bankruptcy, which filled Fu Zhongqiu with pride.
Fu had been quietly observing for the past few years, assessing whether his son-in-law could take over the family business. After this success, Fu's confidence in Liu Yi grew significantly, and he decided to keep Liu close for further training.
In 2011, Liu officially joined Qiutian Gears as an assistant general manager responsible for company procurement.
Qiutian Gears had hundreds of upstream suppliers at that time, but Liu discovered that despite spending money on procurement, "we couldn’t even get the materials?"
When a supplier responsible for providing blanks to Qiutian Gears significantly delayed delivering the goods, Liu took employees to the factory to expedite the order. He was shocked by what he saw: no one was working on the production line at all.
If a supplier couldn't deliver on time, it would cause production delays at Qiutian Gears, increasing costs, leading to missed deadlines for their clients, and ultimately damaging the company's reputation. Liu realized that the integration and upgrade of their partner suppliers could no longer be delayed.
However, adjusting the partnerships was a large, systemic undertaking. Liu knew it would be impossible to push through without his father-in-law's support. How could he gain Fu's approval? And how would he convince the owners of the partner factories? Liu decided to adopt a "strategic detour" approach.
At a family dinner, Liu casually remarked, "The company's procurement cycle is too long." Fu understood the underlying message in his son-in-law's words but chose not to respond.
As many of the suppliers' owners had fought alongside Fu during his early days in business, he didn't want to offend anyone.
A week later, Liu handed Fu Zhongqiu a detailed report. The report showed that Qiutian Gears had hundreds of suppliers, and the profit losses caused by delayed deliveries were already staggering.
Fu clearly understood what Liu Yi was aiming for. After a long silence, he said, "Go ahead."
News of the integration and upgrade of the supplier system quickly spread, and many of the supplier owners became anxious. They crowded into Liu's office, questioning him, "Why are you cutting orders off so suddenly?"
"Qiutian and all of you are in a mutual dependence relationship. As customers demand higher quality products, Qiutian Gears needs to control both cost and quality, which means we must promote collaborative development," Liu repeatedly explained to the crowded office.
Under Liu's leadership, the integration and upgrade of upstream suppliers began in 2012 with one clear goal: cultivating high-quality and stable core suppliers.
For those suppliers with low technical capability and poor management, Qiutian Gears gradually reduced or canceled orders, regardless of how many years the company had worked with Qiutian Gears or any personal ties with the chairman.
On the other hand, for well-managed, larger suppliers and small to medium-sized enterprises willing to keep pace with Qiutian Gears' growth, the company began to favor them with more orders and offered support in terms of technology, management, and funding.
Qiutian Gears' production efficiency increased by more than 30 percent in just two years, and some of the smaller suppliers thrived after the integration.
That same year, a motorcycle company needed to urgently manufacture a batch of new motors for a major event and desperately needed gears. After approaching several suppliers without success, they turned to Qiutian Gears and said, "You have one month to produce these gears."
"We finished the entire batch in just 20 days," Liu said. He added that Qiutian Gears might never have achieved such production efficiency without the bold steps we took earlier.
Just as Liu Yi resolved internal issues within the company, the external market began to change.
Around 2015, the structure of China's automotive and motorcycle industries began to shift. On the one hand, the costs of raw materials and labor for traditional auto parts were steadily rising; on the other hand, the rise of new energy vehicle manufacturers was gaining momentum.
The market had changed, but Qiutian Gears was still producing large volumes of motorcycle and minivan parts, relying on low-cost, low-price products to secure orders. Fu Zhongqiu and Liu Yi realized that relying on past success was no longer enough; Qiutian Gears had reached a crossroads for transformation.
In fact, several years earlier, Liu had suggested to his father-in-law that the company should quickly develop higher-value-added products like car transmission gears. By 2015, as the industry situation became more pressing, Liu Yi pushed even harder, and Fu Zhongqiu finally decided to let Liu take the lead in restructuring the product portfolio.
In 2016, a new car transmission gear project came before the company. However, the cost of taking on the project required investing in an entirely new production line and building a separate workshop.
The company's business was not thriving at that time, and cash flow was tight. Despite these challenges, with Liu Yi's strong support, Fu decided to lease land separately for the construction of a factory and to invest in a complete production line. A new workshop was established, specifically for developing and producing car transmission gears, marking the beginning of Qiutian Gears' first round of transformation and upgrading.
However, a large portion of the products remained unsold because they were not yet mature and because the market demand was overestimated. A year later, the workshop had to be shut down.
Liu faced a major setback for the first time since joining the family business. However, he understood that transformation was inevitable for a traditional supplier like Qiutian Gears.
With this belief, Liu insisted on retaining the research and development team for car transmission gears. He even pushed the team to thoroughly study manual car transmission gears, which were still relatively mainstream then, and focus on automatic car transmission gears, which were then monopolized by joint venture brands and the newly emerging electric vehicle gear products.
These new product areas offered higher added value but also required much higher precision and craftsmanship in gear manufacturing. To meet these demands, Liu Yi invested in sending the team to coastal cities to learn cutting-edge technologies.
Starting in 2016, China's automotive industry, particularly self-owned brand cars, experienced rapid development. Automatic transmissions for self-owned brand cars were gradually developed and brought to market. However, the corresponding parts supply industry struggled to keep pace, including gears. Qiutian Gears seized this opportunity, and coupled with decades of brand accumulation; its products began to gain market traction.
Between 2018 and 2019, Qiutian Gears successfully entered the supplier lists of two well-known domestic new energy vehicle brands. Since then, the company has continuously grown and is now a supplier for numerous brands, including BYD, Xpeng, Great Wall Motor, Changan, and SAIC.
Currently, the various processes in Qiutian Gears' workshops are seamlessly connected, ensuring efficient collaboration. "Orders are fully saturated, and everyone is racing to increase output," Liu said, predicting a 30 percent increase in revenue for this year.
(Qiu Xiaoya and He Saige, reporters from Chongqing Daily, contributed the Chinese version of this report.)
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