In 2012, China’s machinery sales amounted to 678 billion euros. It is the world’s largest machinery-producing country and exports 17 billion euros, making it the third-largest mechanical exporter, second only to Germany and the United States. The chief economist of the German Federation of Machinery and Equipment Manufacturers expects that China's machinery equipment sales will achieve a 7% increase in 2014.
ReinholdFestge, chairman of the German Federation of Machinery and Equipment Manufacturing, said that the German machinery manufacturing industry must take seriously the high-end equipment manufacturing policy in the 12th Five-Year Plan of China. According to surveys, Chinese customers are very much convinced of the technological content of German machinery manufacturing, but Chinese manufacturers are even better at developing mid-markets and services. This is not only a unique phenomenon in China, but should be at the core of the German company's internationalization strategy. .
In the past five years, the average Chinese competitor began to expand its export scale. The first wave of export markets was mainly in Southeast Asia and India, and the second wave after 2015 began to enter the European and American markets with mid-range products. For German machinery manufacturers, mid-range technology will provide them with greater opportunities.
German companies should not be limited to the top of the technology pyramid. ReinholdFestge believes that in view of the increasing price sensitivity of the Chinese market, Germany must formulate a "top-down strategy" based on China's "bottom-to-bottom strategy." In respect of localization services, German companies need to increase their efforts relative to their Chinese counterparts.
In October 2013, the German machine tool company TRUMPF Co., Ltd. signed a joint venture association with Jiangsu Jinfangyuan CNC Machine Tool Co., Ltd. and entered China's mid-range market as a result, and it basically focused on high-end products. The German Federation of Machinery and Equipment Manufacturers has stated that German machinery and equipment manufacturers must constantly realize that their products are “too good and have too many functions†for the most important markets. The current market with the most growth potential is the mid-end product. Camille, chief operating officer of TRUMPF Machine Tool Group, firmly believes that “sufficiently good†is a strategy for the Chinese market to continue to develop. “Chinese customers will not pay for their unneeded configurations.â€
Walter Hcki, head of Bosch's packaging technology division, believes that both small-scale machinery and solid service and high technology must be provided, and quality must be the same to achieve "German Quality Made in China." Localization production is becoming more important for German companies. PricewaterhouseCoopers China Communications Ralph Niederdrenk believes that after sales of 100 million euros, it can consider real local production. If it cannot be achieved, it will consolidate its position in the high-tech niche market. The status is more meaningful.
Oliver Wack, a foreign trade expert at the German Machinery and Equipment Manufacturers Federation, said that localized production is also becoming more difficult. China’s wages have risen and raw material prices have also increased. However, equipment manufacturer Doer Durer is still convinced that China is the best location. As the world's largest manufacturer of automotive painting equipment, Dole's 1/3 order comes from China and is locally produced; 80% of the components of spraying equipment come from China, and Export equipment to other Asian countries.
Ernst & Young’s Peter Englisch believes that the Chinese market also has its own particularities. The legal environment has improved greatly compared with 10 years ago. For joint ventures, the rules for proprietary technology transfer are more clear, but employee loyalty is lower than that of German middle-tier companies. Although there are piracy cases, the market is large and companies can develop rapidly.
Niederdrenk suggested that companies make good use of China's experience and have a profound experience. Their projects were introduced by German companies in China. The communication with local government departments and officials was effectively linked. In addition, it is very important to communicate with consultants during negotiations. Differences and market profiles. It is expected that the successful M&A will become an example. Niederdrenk believes that if companies want to open up new markets, they must reposition themselves.
On the whole, China is the most important market for German machinery and equipment, but the "Made in Germany" high technology is no longer a marketing gimmick. China needs more mid-range products and localized production.
ReinholdFestge, chairman of the German Federation of Machinery and Equipment Manufacturing, said that the German machinery manufacturing industry must take seriously the high-end equipment manufacturing policy in the 12th Five-Year Plan of China. According to surveys, Chinese customers are very much convinced of the technological content of German machinery manufacturing, but Chinese manufacturers are even better at developing mid-markets and services. This is not only a unique phenomenon in China, but should be at the core of the German company's internationalization strategy. .
In the past five years, the average Chinese competitor began to expand its export scale. The first wave of export markets was mainly in Southeast Asia and India, and the second wave after 2015 began to enter the European and American markets with mid-range products. For German machinery manufacturers, mid-range technology will provide them with greater opportunities.
German companies should not be limited to the top of the technology pyramid. ReinholdFestge believes that in view of the increasing price sensitivity of the Chinese market, Germany must formulate a "top-down strategy" based on China's "bottom-to-bottom strategy." In respect of localization services, German companies need to increase their efforts relative to their Chinese counterparts.
In October 2013, the German machine tool company TRUMPF Co., Ltd. signed a joint venture association with Jiangsu Jinfangyuan CNC Machine Tool Co., Ltd. and entered China's mid-range market as a result, and it basically focused on high-end products. The German Federation of Machinery and Equipment Manufacturers has stated that German machinery and equipment manufacturers must constantly realize that their products are “too good and have too many functions†for the most important markets. The current market with the most growth potential is the mid-end product. Camille, chief operating officer of TRUMPF Machine Tool Group, firmly believes that “sufficiently good†is a strategy for the Chinese market to continue to develop. “Chinese customers will not pay for their unneeded configurations.â€
Walter Hcki, head of Bosch's packaging technology division, believes that both small-scale machinery and solid service and high technology must be provided, and quality must be the same to achieve "German Quality Made in China." Localization production is becoming more important for German companies. PricewaterhouseCoopers China Communications Ralph Niederdrenk believes that after sales of 100 million euros, it can consider real local production. If it cannot be achieved, it will consolidate its position in the high-tech niche market. The status is more meaningful.
Oliver Wack, a foreign trade expert at the German Machinery and Equipment Manufacturers Federation, said that localized production is also becoming more difficult. China’s wages have risen and raw material prices have also increased. However, equipment manufacturer Doer Durer is still convinced that China is the best location. As the world's largest manufacturer of automotive painting equipment, Dole's 1/3 order comes from China and is locally produced; 80% of the components of spraying equipment come from China, and Export equipment to other Asian countries.
Ernst & Young’s Peter Englisch believes that the Chinese market also has its own particularities. The legal environment has improved greatly compared with 10 years ago. For joint ventures, the rules for proprietary technology transfer are more clear, but employee loyalty is lower than that of German middle-tier companies. Although there are piracy cases, the market is large and companies can develop rapidly.
Niederdrenk suggested that companies make good use of China's experience and have a profound experience. Their projects were introduced by German companies in China. The communication with local government departments and officials was effectively linked. In addition, it is very important to communicate with consultants during negotiations. Differences and market profiles. It is expected that the successful M&A will become an example. Niederdrenk believes that if companies want to open up new markets, they must reposition themselves.
On the whole, China is the most important market for German machinery and equipment, but the "Made in Germany" high technology is no longer a marketing gimmick. China needs more mid-range products and localized production.
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