Survey: Many mechanical engineering companies are rethinking their China strategy
According to a survey, many German mechanical engineering companies are currently rethinking their China strategy. In a survey conducted by the industry association VDMA, almost half (45 percent) of the 304 participating member companies stated this. The main reasons for this were a more difficult business situation on the ground, the intensification of geopolitical tensions and the pressure on Chinese companies to give preference to local suppliers and products, the German Engineering Federation (VDMA) announced in Frankfurt.
"We are observing a significant increase in the competitiveness of local companies due to increased product quality and technology, but also increased industrial policy intervention by the state," explained VDMA foreign trade expert Ulrich Ackermann. One starting point could be a diversification of sales markets and supply chains, among other things: "For many companies, this currently means a stronger focus on the US market and - in addition to China - possibly examining additional opportunities in India, for example."
However, according to the survey, 86 percent of VDMA member companies surveyed in Germany and China still have confidence in the Chinese market. Accordingly, 42 percent intend to expand their activities in the country in the near future, while 25 percent are undecided.
Given the economic challenges faced by mechanical engineering companies in China and the increased competitiveness of local companies, some firms are considering diversifying their sales markets and supply chains, potentially focusing more on the US market and exploring opportunities in other countries like India. Meanwhile, despite these challenges, the majority of surveyed mechanical engineering companies, both in Germany and China, still express confidence in the Chinese market, with 42% planning to expand their activities there in the near future.
Source: www.dpa.com
