EMAG bullish on business in China market

EMAG Group, a German machine tool manufacturer, anticipates a doubling of delivery volumes from Chinese factories within the next three to four years, with several million euros of investment in the pipeline, said its executives.

"This is the strategy we are implementing — continuous investment in China. We express our confidence in the Chinese market through action," said Mathias Klein, chief sales officer of EMAG Group.

Markus Clement, global CEO of EMAG Group, said the group is also considering establishing a research and development center in China, noting the country's evolving position in becoming a major player in global automotive manufacturing.

"China is playing an increasingly significant role in supporting EMAG's global structure, particularly amid the challenges posed by the COVID-19 pandemic. We are confident in further collaboration with Chinese customers as they expand globally," Clement said.

The remarks came after Chinese automakers, the downstream industry of machine tool manufacturing, are facing critical challenges including the European Union's anti-subsidy investigation into Chinese-made electric vehicles and United States' subsidies for the production and sale of clean energy power facilities in the region to support the development of local enterprises.

"EMAG is poised to support its Chinese partners not only within China, but also across international markets, including Europe and emerging regions like Southeast Asia," Clement said.

EMAG saw about 152 million euros ($161 million) in net sales in China in 2022, a surge of nearly 54 percent from the previous year.

The group's commitment to investing in China resonates with broader trends among German companies, as indicated by a recent survey conducted by the German Chamber of Commerce in China. The survey revealed that nearly 80 percent of German companies plan to maintain their current investment levels in China, recognizing its critical role in staying competitive both domestically and globally.

While currently only 5 percent of respondents perceive Chinese companies as innovation leaders, a significant 46 percent anticipate their ascendancy within the next five years. This underscores the growing recognition of China's innovation capabilities and its potential to lead in various industries.

German companies' strong interest in investing in China was demonstrated by German Chancellor Olaf Scholz's visit to China this week — his second such visit in 17 months — as he arrived with a large number of business leaders from across different sectors.

Maximilian Butek, the East China executive director of the German Chamber of Commerce in China, underscored German companies' interest in leveraging China's innovation ecosystem to drive growth and maintain their competitive advantage. Sectors such as electric vehicle batteries and autonomous driving present significant opportunities for collaboration.

The latest statistics from the Ministry of Commerce further corroborate this sentiment, with German investment in China surging by 19.8 percent year-on-year in the first two months.