The German Mahler entered China for seven years and is still a "zero-profit" company. All profits have turned into new investments in China.
From the world "Piston King" is busy investing, not busy making money to see multinational companies' expansion intentions.
A few days ago, the world's largest automobile "Piston King" Germany's MAHLE established the MAHLER China Technology Center in Shanghai. This is MAHLE's further expansion after setting up 8 parts manufacturing plants in Shanghai, Nanjing, Chongqing, Yingkou, Tianjin and Guangzhou. A major step in China's pace. This time the "head" was simply moved into China.
MAHLE is the world's largest piston development manufacturer. Its current annual sales revenue in China exceeds 100 million RMB. Each year, 10 million pistons are assembled in China, which are GM, Ford, Daih-Ke, Volkswagen, Nissan and Toyota. And many other domestic joint venture brands are available for supply, and the development can be described as "brilliant." However, at the press conference, Dr. Heinz Juncker, Global CEO of Mahler, revealed that Mahle, which has been developing in China for seven years, has not made any profits yet. In this regard, he explained that Mahler had converted all his profits into investments, as did the new factory, and so did the technical center now put into use. This time, the technical center invested 100 million yuan. He hopes to make profits in China in the next 3 to 5 years.
Industry insiders comment that busy with investing but not busy making money is exactly what makes Mahler really smart.
According to the WTO agreement, foreign parts manufacturers are now able to set up wholly-owned factories in China with 100%. According to report, Mahler's shares in all Chinese companies are more than 50%. For example, the factories in Nanjing and Chongqing all have 100% shares, and the joint venture factories in Shanghai hold 72.5% shares, which means that Mahle is in China. The factory can have absolute masterminds. It is through such “attacking the city†that Mahler quickly established a firm foothold in China, and then used its own technology and capital advantages to rapidly grow and develop in China. From the perspective of total investment, Mahler’s new investment in China has accounted for 10% of its new global investment, and this figure has further expanded.
In fact, in China, as the main supplier of Nissan, Volkswagen, and General Motors, in the past 4 or 5 years, Mahle's piston parts have shown an astonishing development trend in China. Currently, the market share of Mahle Pistons in China ranks No. Second, the total market share of more than 20%.
In this regard, a senior expert in the parts and components industry told the reporter that we can selectively release foreign automakers with limited “last hurdles†and have completely liberalized the spare parts sector. In this way, foreign parts giants will not only rely on themselves as the global original suppliers of a number of joint ventures to occupy the Chinese market at the first time, but also rely on their advanced technology and huge capital scale to continuously annex and eliminate relatively weaker ones. Domestic parts and components companies have established their monopoly in China.
The figures from the China Association of Automobile Manufacturers show that China’s auto industry currently has an annual demand for spare parts of around 80 billion yuan, and the annual circulation of Auto Parts and components from the primary market to the regional retailer to retailers must be at least 2400. 100 million yuan in transaction volume. At the same time, according to industry insiders, the average profit margin can reach 30% in the China's spare parts market where competition is not sufficient. It is precisely this fancy cake that Mahler pays attention to the long-term development without sacrificing his immediate profit. Behind his seven-year unprofitability, it reflects his expansion intentions. According to this development, how much domestic domestic spare parts companies can still have? This is a problem that cannot but arouse deep thoughts and wake up. According to industry insiders, the parts companies are also related to the “lifeline†of the Chinese auto industry. In this regard, local companies should continue to work hard to make themselves bigger and stronger, and whether the relevant government departments can also help?
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