â€śChinese consumers are demanding higher-quality products across the board, from electronics, to cars, to medical equipment. A study we carried out recently confirmed this trend, showing that the low-end segment in our industry is shrinking. Since our solutions are used for high-quality applications, this is positive for us. However, growth in the premium segment is not really accelerating. To grow in our industry, you have to push into the mid-tech market. We are looking into expanding our product portfolio in this direction. The key decision is how low are we willing to go in terms of performance and cost.â€ť
â€śThe injection molding industry is changing and our product is slowly becoming commoditised. Chinese competitors are quickly upgrading their performance. They might still need a few years, but they are approaching our level across our entire portfolio. Our advantage is our system competence. We donâ€™t just sell injection molding machines, we also provide the whole system and services around it. This is our differentiation as a European supplier. In the future, digital services and technologies around â€śIndustrie 4.0â€ť will be an even more important source of income. Machine suppliers have to be prepared to provide this know-how to customers.â€ť
â€śWe are implementing a â€śglobal engineering footprintâ€ť program where R&D teams from, say, China, Slovakia, and Munich work together on a project. In the process, all sides learn from each other. On the one hand, our German team is learning from the Chinese mindset, which is more relaxed and risk-taking. This leads to shorter processes and a faster speed-to-market. On the other hand, the program means giving our Chinese team full access to our data and know-how. As a high-tech company, we initially had our doubts about this. But we have seen China shift from a country of copycats to one of developers, and until now we have had a positive experience.â€ť
â€śIn January 2016 ChemChina became the main shareholder of KraussMaffei. Being part of the ChemChina family has broadened our growth opportunities in China, giving us access to new customers, including state-owned companies which usually see European suppliers as high-end. It also enables us to have a longer-term strategy compared to our previous 15 years under private equity. For ChemChina, one advantage is that we are helping to globalise the mechanical engineering companies in their portfolio. In a few years, seeing Chinese firms competing in the US and European markets will be much more common.â€ť
Contact us at firstname.lastname@example.org for competitive industry insights, commercial strategy, and M&A in Greater China.
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