Part of the investment will go to its new headquarters in Beijing, while the remainder will mostly be used to expand Siemen's various business subsidiaries, as well as to beef up research and manufacturing facilities in China, the firm said in a statement.
"As part of this strategy, the company will double the number of regional offices from the current 28 to 60 in order to ensure a presence in all of the country's provinces," Siemens said.
In addition, the firm plans to ramp up the production of mobile handsets at its Shanghai plant from 14 million to 20 million units annually. Earlier this month, Siemens appointed local handset manufacturer Ningbo Bird as the main distributor of its phones in China and the two companies also agreed to jointly develop products for domestic and international markets.
Beyond its cellular phone division, Siemens said other business units specializing in areas like power generation, transportation, lighting and medical systems, would also be strengthened.
According to Siemen's chief executive Heinrich von Pierer, the billion-dollar boost is expected to lift the company’s sales in China from $4 billion euros (US$4.8 billion) last year to $8 billion euros (US$9.6 billion) in the near future.
"We see good chances of doubling today's sales volume in the next three to five years, von Pierer said.”We would thus grow faster than the Chinese market. And we would increase China's share of our worldwide business."
Besides being a sales stronghold, China will also serve as an important procurement base for Siemen's global operations. The firm said it aims to triple the value of its procurement activities in the country to $5 billion euros (US$6 billion) by 2004.
Siemens currently owns 45 companies and joint ventures and employs around 30,000 workers in the mainland.
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I buy the fact that Siemens can use China as a procurement base. I also agree that China is a market for Siemens medical technology and for the business units power generation and power distribution where China does not have comparable products. In contrast to Chinese manufacturers, Siemens has a strong technological advance in these fields. But mobile phones? As far as I read in the press statements, Siemens' share in the Chinese phones market has just dropped by 50% last year, and the Chines emarket is in the hands of national manufacturers like Haier, Huawei, Konka, TCL and Lenovo. How does Siemens want to compete with these companies that have access to the whole country. By teaming up with another manufacturer like Ningbo who is essentially a competitor to Siemens? It remains to be seen whether this strategy works in the future. I predict that it's going to be tough in the mobile phones market for Siemens in China, as well as for other Western enterprises.
Posted by anonymous on Friday, May 21 2004 10:33 PM