German companies gear up for larger China market share

TIANJIN, Jan. 12 (Xinhua) -- In an automotive factory in north China's Tianjin Municipality, automobile chassis and body-structure parts roll off the assembly lines one after another.

The factory belongs to BENTELER Automotive Component (Tianjin) Co., Ltd., one of BENTELER Group's 16 plants in China, manufacturing automotive components and modules for high-end car companies.

Klaus Hansmeier, the company's launch manager, who has been working in China for 11 years, said that the company had invested 260 million yuan (about 36.6 million U.S. dollars) in Tianjin to build new production lines as of March 2023, with an additional 100 million yuan of investment at the site in 2023.

"The overall sales in 2023 have doubled compared with the previous year," said Hansmeier, adding that the company plans to invest another 300 million yuan before 2027 to upgrade the production lines.

"We see the Asia-Pacific business as the backbone of our group's development, and China is the heart," said Hansmeier.

The company is one of a cluster of more than 10 German companies in the Tianjin Beichen Economic and Technological Development Area (BEDA), covering an area of about 50 square km.

Also located in the BEDA is mechanical drive systems supplier Flender that has launched the 10th phase of its capital increase and expansion project for upgrading the production line structure of its Tianjin enterprise.

"We know that half of the world's wind turbine market is here in China. That requires even more investment," said Martin Kaufung, director and CFO of Flender Ltd., China. "The localization rate of our company has reached more than 90 percent, and the indicator continues to rise."

The China subsidiary has become Flender's largest gearbox manufacturing base outside Germany, according to Kaufung.

Not far from Flender's Tianjin enterprise lies Leybold Vacuum Equipment (Tianjin) Co., Ltd., which has been developing rapidly since it entered the Chinese market in 1997.

"After entering China, our annual sales growth peaked at 52 percent. For more than 20 years, our average annual sales growth rate has remained about 10 percent," said Cho Yun-soo, the company's general manager.

In the near future, the company plans to increase the proportion of local support equipment to more than 92 percent. Thanks to China's industrial and logistics systems, this goal is not difficult to achieve, Cho said.

German company Big Dutchman, one of the world's largest suppliers of feeding systems and housing equipment for modern pig and poultry production, has a 12,000-square-meter manufacturing plant in the BEDA, and it is in full swing.

As the company's only production base and logistics center in China, the Tianjin facility, founded in 1997, is involved in marketing, production, services, procurement and logistics.

After 30 years of development in China, Big Dutchman's business in China is on the up-and-up, with an average annual output value of around 1 billion yuan, contributing one-eighth of the company's total global output.

"China is a pillar market for the company's business growth. We still have great development potential in China in the future," said Walter Benz, president of Big Dutchman China.

In the next five years, the company is looking forward to increasing its output value in China to 1.5 billion yuan and will continue to share the growth potential of the Chinese market, Benz added.

Wang Yongping, deputy general manager of the BEDA Co., Ltd., said China's advantages, such as complete industrial chains and ample technical talent, enable many foreign enterprises to enjoy long-term development in China.

According to statistics from the Tianjin municipal bureau of commerce, as of October 2023, Tianjin had 481 German-invested enterprises in the fields of equipment manufacturing, automobile manufacturing, and electrical and mechanical manufacturing.

Nationwide, Germany's actual investment in China increased by 21 percent year on year in the first eight months of 2023, according to statistics from China's Ministry of Commerce. Meanwhile, the actual investment of German enterprises in China in the fields of motor equipment manufacturing and chemical manufacturing increased by 172 percent and 91 percent, respectively.

According to a survey released by the German Chamber of Commerce in China in 2023, more than half of the 288 German companies surveyed planned to increase their investment in China in the next two years.