Attention: Chinese wind power manufacturers! We know that you are eyeing the West. Speaking last week to a house full of Chinese business and trade journalists at The Switch media business luncheon in Beijing, Celia Sun from MAKE consulting company listed a few approaches and risks you may want to consider when entering new markets.
According to MAKE’s Chief Representative in China, regulatory and technical barriers in mature markets may become a hindrance to the overseas business development plans of Chinese companies. To a large extent, this is true. However, as we at The Switch know very well, some of the Chinese wind turbines are already ‘powered by’ Western technologies, such as The Switch’s permanent-magnet generators (PMG) and full-power converters (FPC). This kind of partnering will prove successful for many Chinese companies, as suppliers like The Switch are familiar with European and American requirements and market mechanisms. In addition, The Switch’s unique network-based business approach and our Model Factory production concept can easily support localization processes.
Another factor that may make the Chinese overseas entry more difficult is that the quality of Chinese wind turbines is questionable, due to a limited overseas track record. The reliability of a domestic Chinese track record, no matter how remarkable, is not recognized in many overseas markets because of the non-transparency of data. This is also true, but can be overcome by choosing a Western component supplier. Not only have The Switch PMGs and FPCs proven their worth as top-quality technologies in extreme Chinese conditions, but also many European manufacturers have chosen our pioneering power generating solutions to be used in their turbines.
Celia Sun also noted that many of the major wind power markets are being dominated by leading global competitors that have established relations and market share despite patent and entry barriers, which makes market penetration difficult for new Chinese entrants. Until recently, this has been very much the case. GE has dominated the US market; Repower and Enercon have conquered Germany; and Gamesa is a household name in Spain.
Still, there is no question when it comes to Chinese wind power manufacturers’ volumes – which may be changing the status quo faster than expected!
Carlo Cecchi, Business Development Director at The Switch China
