Zung Fu (仁孚) and 65 Years of Mercedes in Hong Kong

  1. York Lo: Zung Fu (仁孚) and 65 Years of Mercedes in Hong Kong

Zung Fu And 65 Years Of Mercedes In Hong Kong Image 1 York Lo

Left: Zung Fu’s Mercedes showroom at Tower Court in Causeway Bay; Right: Zung Fu Industrial Building in Quarry Bay

Since introducing Mercedes Benz to the HK market in 1954, its exclusive distributor Zung Fu has been synonymous with the highly popular European luxury car brand. Founded by four dynamic partners with diverse backgrounds and member of the Jardines group since 1975, Zung Fu was also involved in the distribution of Audi, Renault and Standard-Triumph automobiles and was a listed diversified industrial group with interests in industrial trading (electric generators, ship engines and marine supplies), electronics, mining equipment, real estate and computers in addition to automotive.   

Zung Fu (1954-1969):  the Early years

Zung Fu was originally founded in Shanghai in 1938 as a trading firm and by the time it introduced Mercedes to HK in 1954, it was a partnership with four partners: Kho Chee-seng (許志笙, 1899-1969), a Filipino Chinese merchant; the brothers Chee-foo Chao (趙桂, also spelled Che-Fuh Chao, 1900-1987) and Kwei-tek Chao (趙桂) and a young executive of German Jewish descent by the name of Walter Martin Sulke OBE JP (蘇偉澤,1923-1994). A native of Fukien province, Kho was a director of the Chinese Chamber of Commerce in Manila and was a friend of fellow Filipino Chinese leaders Kui Wah-san (桂華山,owner of Astor Hotel in HK) and Yu Yi-tong (于以同), founder of the Chinese Commercial News. During the War, he was involved in relief effort in his native Fukien and established Overseas Chinese Development Corporation with fellow Fukienese merchants such as the Tiger Balm king Aw Boon-haw. After the War, he shifted his base to Hong Kong but also had business interests in Singapore where he served on the board of Overseas Union Enterprise, the affiliate of Overseas Union Bank which developed the Mandarin Hotel on Orchard Road. Little information is available about the Chao brothers but based on their names they were likely from Shanghai. Born in Berlin, Sulke fled Germany at a young age after the Nazis came to power and received his education in Italy, Norway and the UK. According to TVB’s first advertising sales manager Stephen Li who counted Sulke as a client, Sulke’s father was a business partner of the Chao brothers. 

According to the German trading firm Jebsen, it was the agent for Daimler-Benz in the region in the 1930s – it is unclear how much of a presence Mercedes had in HK before the War but there were no records of its trademark being registered and government reports in 1939 indicated that Daimler-Benz was one of the German firms being liquidated in HK under the Alien Enemies (Winding Up) Ordinance. The first Mercedes model Zung Fu introduced to the HK market was the 180 and later in the decade the 300 was also introduced and became the most sought-after model. In 1954, Sulke the racecar enthusiast drove the Mercedes 220 at the Macau Grand Prix (unfortunately retired in the final lap due to tire puncture) and began four decades of Mercedes participation in the race. While Zung Fu’s corporate website mentioned that its first showroom was opened in 1955, a newspaper article stated that the showroom in Tower Court (崇明大廈) on Hysan Avenue in Causeway Bay was opened in June 1956. (WKYP, 1956-6-17)

Zung Fu And 65 Years Of Mercedes In Hong Kong Image 2 York LoLeft: Zung Fu’s ad for D.K.W. ( in 1958. The ad read please look right, left and right before crossing the streets as the award winning D.K.W. is very quiet. (WKYP, 1958-7-17); Right: Zung Fu’s ad for Mercedes-Benz diesel engines for taxis, trains and boats in 1963 (WKYP, 1963-5-15)

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Walter Sulke presenting a souvenir to Lam Wing-kum of Dollar Taxi in 1965 (WKYP, 1965-7-29) 

One of the market segments which Zung Fu focused on from inception was taxicab and the firm was successful in landing deals with major taxicab companies early on. In 1959, Zung Fu and Benz awarded medals to 16 taxi drivers for driving Benz cabs for over 200,000 miles without any accidents. (WKYP, 1959-4-14) In 1965, Zung Fu celebrated the tenth anniversary of 21 Mercedes diesel taxicabs (each average over 1 million in mileage) – of this Star Taxi had 12, Dollar had 5, Shanghai and Express each had 2 (see the two articles on taxicab companies for detailed profiles of these firms) (KSDN, 1965-7-29))

In 1958, Z.F. Garages Ltd (仁孚汽車修理廠) was incorporated to provide maintenance and repair services. 

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Left: Walter Sulke of Zung Fu (left) and St Paul’s College Alumni Association president Tse Yu-chuen presenting the key of a Triumph vehicle to the winner of the charity raffle for construction of new school building to Au Kwok-yin, the wife of the founder of Red A plastic products maker Star Industrial (WKYP, 1961-11-17); Right: Zung Fu’s ad celebrating 75th anniversary of Mercedes in 1964  

In 1964, Zung Fu was incorporated in HK with Sulke as managing director and Kho and the Chao brothers as directors. The same year, it introduced a brand of Austrian off-road all-terrain vehicle to the HK market. The jeep, which was selling for $13000 each, could go up hill as steep as 75 degrees and travel in rough terrain and was marketed to the fire and agricultural departments, construction industry and the military. (KSDN, 1964-12-11) Other products represented by Zung Fu include Audi, Renault, Standard-Triumph automobiles, Becker car radios, Beru Verkaufs spark plugs, Hella lamps and bulbs and Alfred Teves brake parts. 

In 1965, Zung Fu launched its used car trade-in program to take advantage of the high resale value of Mercedes vehicles. The same year, Sulke competed in the Macau Grand Prix driving a custom-built Triumph Spitfire. 

Sales and marketing played a key role in the success of Zung Fu. For sales, Sulke hired a team of diverse group of individuals and sales reps were sent to Europe to visit Benz and Renault factories to improve their technical knowledge. In the 1960s and early 1970s, the head of sales at Zung Fu was S.L. Au (區錫鎏), the son of famous Cantonese opera actor Chin Lei Kui (千里駒, 1886-1936, original name Au Ka-kui 區家駒) and as a result, Au maintained close ties to the entertainment industry and was a pallbearer for the famous Cantonese opera actress Yam Kim-fai.  A graduate of King’s College in HK and Lingnan University in Canton, Au entered the auto industry after the War and joined Zung Fu as sales manager in 1961. He was supported by Richard Grimsy Lee, S.Y. Lee (李昇仁) and Y.K. Mok(莫汝功). Zung Fu was probably the first auto dealer in HK to hire female salespersons and its top salesperson in 1971 was Mrs. C.K. Chiu Ma (馬趙質君)who sold a total of 103 Benz that year (WKYP, 1972-1-8) For marketing, in addition to the Grand Prix, Zung Fu spent a lot of money on print advertising and was one of the pioneers in the TV advertising in HK. According to TVB’s Stephen Li, Zung Fu was one of the first major advertisers for its Pearl English channel when it was launched in 1967. As Sulke himself was an oil painter and poet (e.g. in 1977 he composed “Hong Kong – an Unfinished Symphony for 5 Million Instruments”), he had Zung Fu sponsored broadcast of programs such as NBC’s program about Renaissance masters and the 1969 BBC documentary ”Civilisation” by Sir Kenneth Clark and insisted on not having commercial interruptions, only announcing Zung Fu and Mercedes’ sponsorship at the end to be considerate of the firm’s affluent clients.  

By 1969, Zung Fu had grown from 60 staff at its inception in 1950 to over 260 staff and a celebration with 400 guests was held at the Ying King restaurant in Wanchai where staff who had worked for over a decade received honors from Mrs. Sulke and Mrs. Kho (WKYP, 1969-4-5)

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The first Zung Fu auto show at the Ocean Terminal in 1969. Sulke (second from left) and racing champion Albert Poon (third from left) and other Zung Fu executives in front of Audi model (WKYP, 1969-5-24) 

In May 1969, Zung Fu held its first Zung Fu motor show at the Ocean Terminal featuring Mercedes, Audi, Renault and Triumph automobiles, including the Mercedes 300 (No. 51) driven by Erich Waxenberger which won the Macau Grand Prix that year. Sadly, Zung Fu co-founder Kho Chee-sang passed away within two weeks of the event in early June 1969 in HK due to heart conditions at the age of 70 and was buried in the Chinese Christian Cemetery in Pokfulam. (WKYP, 1969-6-5) His widow Chiu Bi-ke (周美閨) served on the board of Zung Fu and the successor firm Jardine International Motors from 1965 until 2000 and controlled two securities firm and a garment factory. Outside of business, Mrs. Kho was chair of the Western District Women’s Association, vice chair of the Eastern District Women’s Association and Chinese Women’s Association, lead director of Po Leung Kuk and supporter of many charitable causes. (WKYP, 1975-11-27) Mrs. Kho made the headlines in 1980 when she was robbed by a young man who offered to drive her from Causeway Bay to Central as she was unable to catch a cab at the Lee Garden hotel and lost her diamond ring which was worth over HK$100,000. (WKYP, 1980-5-24) Her daughter Josephine Kho Piac-Suat (許白雪) was also a director of Zung Fu and succeeded her father’s board seat at Overseas Union Enterprise in Singapore.  

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Mrs. Kho Chee-seng (Chiu Bi-ke) and socialite friends during rehearsal for a charity show for the Women’s Associations in 1977. Standing Left to right: Brenda Chau, Mrs. Shiu Hon Keung, Mrs. Kho, Mrs. HC Tang, Eunice Lam (WKYP 1977-7-19); Mrs. Kho Chee-seng (left) receiving a souvenir from the wife of Secretary for Home Affairs Donald Luddington for Cantonese opera fundraiser organized by the Eastern District Women’s Association in 1972 (KSEN, 1972-5-29) 

Zung Fu (1970-1990): Going Public, Diversification and New Ownership  

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Zung Fu’s management presenting awards to 5 top sales persons in 1970. Right to left: S.K. Au, K.T. Chao, M.C. Leung, Y.K. Mok, C.K. Chiu, Walter Sulke, S.Y. Lee, C.F. Chao, Law Keung (WKYP, 1970-5-3) 

In May 1970, Zung Fu went public on the HK Stock Exchange. The same year, Zung Fu opened its first showroom in Kowloon at the Ocean Terminal. For the year 1970, the firm’s car sales were up 60% while boat engine sales were up 70%.

In early 1971, Zung Fu opened the 15-story Zung Fu Industrial Building at 1067 King’s Road in Quarry Bay with Hsin Chong Construction (see article) as the contractor. The first three floors (total space of 75000 sq ft) housed one of the largest car service facility in HK and Southeast Asia while the remaining 12 floors were office space for Zung Fu and other tenants (KSDN, 1970-8-20) To support its growth, Zung Fu bought land in Aberdeen and hired the architect Ng Fei to design another building – the Zung Fu Aberdeen Garage Building for testing and assembly of vehicles (WKYP, 1970-12-19) 

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Mrs. Kho and Mrs. Sulke handing out raffle prizes at the annual gathering of Zung Fu staff in 1972 at the Metropole restaurant in North Point. (WKYP, 1972-4-4) 

In May 1972, Zung Fu acquired H. and S. Enterprises Ltd through the issuance of 302,198 new shares. H and S controlled a 200-space parking lot on Leighton Road with the group floor being leased to Caltex gas station and Metro-Dodwell showroom (WKYP, 1972-5-23). Metro-Dodwell as a result later closed this showroom and expanded its Kings Road showroom in 1974. (see article) 

In August 1972, Zung Fu made two acquisitions which expanded the group into electronics and mining equipment. It acquired 45% of Arvin (HK) Ltd, the Hong Kong subsidiary of American electronics firm Arvin Industries which manufactured radios, telephones and other audio equipment. Jardine also bought 15% of Arvin HK as part of the deal while Arvin retained the remaining 40% stake. (KSDN, 1972-8-2) Arvin HK also owned 25% of Data Magnetics (HK) Ltd, a manufacturer of magnetic disk drive for computers. The same month, Zung Fu through a newly established subsidiary ZF Australia Pty Ltd acquire 51% of Brookeades, a manufacturer of testing and mining equipment based in Perth, Australia through the issuance of 63447 shares. The firm counted 60% of its sales from markets outside of Australia such as South Africa, Japan and Southeast Asia (including HK and Indonesia). (WKYP, 1972-8-15) In December, Jardine Securities bought an additional 500,000 shares of Zung Fu, raising its stake in the firm to 15%.  (KSEN, 1972-12-16) 

For the fiscal year ending December 1972, Zung Fu recorded after-tax profits of $8 million, a 51% increase from the prior year. Its properties were valued at HK$25 million (WKYP, 1973-4-5) Of its various lines of business, car sales were up only 8% due to government’s new traffic regulations, ship engine business doubled, parts sales were up 35%, auto insurance sales up 30% and machinery sales was up 50%. The group was the agent of generators made by the German firms of MTU, Schottel, AEG and Lips which counted HK Yaumatei Ferry as one of its biggest clients and represented Rodriguez hydrofoils from Italy, which were used by the HK Macao Hydrofoil Company (see article). Zung Fu also teamed up with German and French firms to bid for the mass transit system in HK with bridging technology provided by German firm. In late 1973, Zung Fu bought an additional 40% of Arvin HK, raising its stake to 85% (KSEN, 1973-10-17) 

In June 1975, Jardine increased its stake in Zung Fu to 75%, turning the firm into subsidiary although Sulke remained in control as chairman of the firm with Richard G. Lee as managing director. (Straits Times, 1975-6-17) The same year, the Zung Fu Motor Show had record attendance with motor enthusiasts flocking to see the antique SSK 1927.

In 1976, S.K. Au retired from Zung Fu after 15 years of service and immigrated to Canada. At his retirement banquet at the Metropole restaurant in North Point, he was presented a special Mercedes watch by Mrs. Sulke. (WKYP, 1976-9-23, 1969-3-3) Around this time, Zung Fu was also agent for the German computer firm Nixdorf and Sulke told the press about his goal of capturing 25% of the small and medium size computer market in HK by 1980 (Straits Times, 1976-10-12) 

In 1977, the Zung Fu Motor Show featured the experimental Mercedes C111 sports car. In 1979, Zung Fu decided to shift its focus back to autos and sold Arvin HK to Atlas Electronics (see article), the pioneer of the local electronics industry. (Business Times, 1979-1-8) 

In 1980, Hutchison Boag sold its entire motor division – comprised of six subsidiaries and one associate company – to Zung Fu as Hutchison taipan Bill Wyllie (who had driven for the Zung Fu team at the Macau Grand Prix and was former head of Harpers, see article) was busy disposing assets to rescue the group. (Business Times, 1980-8-9) For fiscal year 1981, Zung Fu recorded profits before extraordinary items of HK$70.8 million. In 1984, Zung Fu and Jardine Shipping formed a joint venture – International Marine Supplies Ltd. 

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Article about Walter Sulke’s call for halt of 1997 talks and referendum in 1984  

Aside from running Zung Fu, writing poetry and racing cars, Zung Fu head Sulke was very active in community affairs having served as chairman of the Museum of Science and Technology and Museum of Arts, the government’s Environmental Protection Advisory committee and was made justice of the peace in 1976, awarded OBE in 1979 and appointed to the Urban Council in 1981. In 1984, he received a lot of attention when he called for the Sino-British negotiations regarding the 1997 handover to halt and instead proposed to have the city’s fate determined by referendum of its own residents. In 1986, a special centenary Mercedes motor show took place at Landmark where the world’s first two automobiles developed by Gottlieb Daimler and Karl Benz were put on display. 

In 1988, the Zung Fu Car Park Building in Kowloon was completed incorporating the firm’s Hunghom service center, offices, parking and showroom. 

Zung Fu (1990 and Beyond): Integration and Expansion 

In 1990, Zung Fu was re-organized to Jardine International Motor Holdings Limited and changed its domicile from Hong Kong to Bermuda. Jardine taipan Simon Keswick became chairman of the firm and Jardine executives Anthony Nightingale and Nigel Rich became joint managing directors while Sulke became vice chairman. He died in 1994 in London and was survived by his wife Ruth, son Alfred and daughter Francesca. 

In February 1991, Zung Fu sold its industrial trading division to Jardine Engineering to focus solely on autos. In 1992, Zung Fu launched the 600SL at the Peninsula Hotel and it was the first and only car to be displayed on the Peninsula fountain. In 1993, Zung Fu expanded into the Macau market with the establishment of Zung Fu Macau and opened its first showroom in Macau. The next year, Zung Fu China was established and its first showroom in Guangzhou opened. In the late 1990s, Zung Fu launched the SLK, CLK, A-class, M-class, S-class, CL and C class lines of Mercedes in HK. 

In 2000, Jardine International Motors delisted from the Stock Exchange of HK and was renamed Jardine Motors Group Holdings Ltd. 

In the 2000s, Zung Fu added other auto brands to its lineup. In 2002, Zung Fu opened the first smart showroom in Causeway Bay. The next year the firm became the distributor of Hyundai and began importing Hyundai automobiles into HK from Korea. The firm also expanded into southern China. 

In 2012, the Zung Fu Commercial Vehicles Service Center opened in Fanling and in 2014, the first Mercedes van showroom opened in Kowloon Bay.  

In 2017, Zung Fu became one of the first Mercedes dealers in the world to incorporate the MAR 2020 retail concept featuring new exterior and interior design and improved processes. The same year, a new service point was opened in Lau Fau Shan to support commercial vehicles and the Zung Fu Aberdeen Garage Building was sold to Empire Group, the new firm started by former SHK Properties chairman Walter Kwok for HK$1.5 billion, marking the highest price paid per unit for any industrial properties in HK ever. 

In 2018, Zung Fu opened its 9-story, 440,000 sq ft new headquarters – Zung Fu House at Ka Yip Street in Chai Wan, featuring the largest car showroom in HK which is a one-stop shop for sales, service, parts, training, events and used cars. 

Sources (other what’s cited above): 

http://www.zungfu.com/en/desktop/passenger-cars/aboutus/aboutus/milestones.html

https://www.zungfu.com/en/desktop/passenger-cars/aboutus/aboutus.html

https://www.scmp.com/magazines/style/news-trends/article/2155956/mercedes-benz-opens-9-storey-brand-centre-chai-wan-hong

https://researchforfuture.hk/2018/04/04/%E8%A2%AB%E9%81%BA%E5%BF%98%E7%9A%84%E3%80%8C%E8%87%AA%E6%B1%BA%E6%B4%BE%E3%80%8D-%E8%98%87%E5%81%89%E6%BE%A4%EF%BC%88walter-m-sulke%EF%BC%89/

This article was first posted on 23rd December 2019.

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