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The German giant Bosch-Siemens Home Appliances Co Ltd (BSH) aims to invest heavily in the Chinese market, targeting high-end consumers with two competing international brand names.
"The market is very developed and it will be a top priority for us in the coming years," said Roland Gerke, president of BSH (China).
At the sideline of the China International Consumer Electronics Show (SinoCES) in Qingdao, Gerke said that BSH would invest US$80-100 million in China in the next three years. The capital will be used to build more production facilities, bring all BSH core products to market, enhance local research and development capability and employ more people.
The company produces washing machines, refrigerators and electrical water heaters in China, and holds more than 50 percent of the high-end washing machine market.
BSH will begin production of cooking appliances in China in the next quarter, and small appliances in coming years. The business has three production facilities in Wuxi in Jiangsu Province and Chuzhou in Anhui Province, and is building a production base in Dalian in Northeast China's Liaoning Province.
Gerke said he is investigating a location for a new small appliances facility and Qingdao, where Chinese home appliance giants Haier, Hisense and Aucma are located, is one of the candidates.
The 50-50 joint venture between Siemens and Bosch will also start to establish a global purchasing centre in Nanjing, capital of Jiangsu Province, in July.
Gerke said the procurement volume of the centre will reach US$700 million to US$1 billion a year in the long-term.
Besides making new investments, the company will introduce the Bosch brand to China in December.
BSH operates two brands in Europe, but in China all products are sold with the Siemens brand.
Jack Wu, general manager of sales with BSH (China), explained that the penetration rate of the Siemens brand in China is already very high, so the introduction of internal competition between two brands would stimulate the market.
SinoCES, held from Friday to today, is the biggest consumer electronics show in China and has attracted more than 300 exhibitors, half of which are multinationals like Siemens and Philips.
Wang Ning, vice-president of China Electronics Chamber of Commerce, a major organizer of the show with the Qingdao municipal government, said they had reached a preliminary understanding with the US-based Consumer Electronics Association (CEA), organizer of the Consumer Electronics Show in Las Vegas, to host SinoCES.
Wei Jianguo, vice-minister of commerce, believed that co-operation with the world's largest consumer electronics show will help SinoCES become a major platform for the global industry.
Wang said the organizer aims to build the fair in Qingdao into the second-largest event of its kind in the world in two to three years.
(China Daily June 21, 2004)
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