"Tangerines born in Huainan are oranges, and those born in Huaibei are oranges." Those business logics that are effective around the world may not be unimpeded in the Chinese market. Vestas, the world's number one wind power manufacturer, is facing such a dilemma.
This enterprise founded by blacksmith Hansen in 1898 has created countless glory in a hundred years. Vestas has always held the top position of the global wind turbine manufacturer; it has manufactured nearly 50,000 windmills for the world, and its comprehensive technical capabilities have made countless competitors coveted and coveted.
But it is such an awesome player who has fallen into a situation where he is almost at a loss in the world's largest wind power market with the most opportunities - China.
Vestas is like a mirror, which reflects the fact that during the rapid development of wind power in China in the past ten years, foreign wind turbine manufacturers have taken the lead in the past, and have become more successful, and then gradually become marginalized. While the installed capacity of the Chinese market is soaring, the market share of foreign wind turbine manufacturers, which once dominated the world, has plummeted, from a high of 75% to less than 10% today. Little Brothers" - a local Chinese manufacturer.
What happened to the Vestas?
As a company specializing in the production of windmills, Vestas ranks first in the world with General Electric of the United States in the field of onshore windmills, and ranks second in the world after Siemens of Germany in the field of offshore windmills. It has a vertically integrated system from development to manufacturing and sales, from technology to operation, Vestas adheres to the "pure-bred principle" of self-reliance. It is precisely because of its strong technical strength and rich experience in mature markets around the world that Vestas had almost no advantages in the Chinese market.
The contact between Vestas and the Chinese market began in 1986. In the following 20 years, Vestas has few competitors in the Chinese market. The challenge started after 2005. With the rise of local manufacturers such as Goldwind and Sinovel, Vestas began to feel the impact. After that, the influx of a large amount of capital gave birth to a large number of local enterprises that grow wildly; the sudden emergence of local forces has gradually broken the pattern of foreign enterprises occupying a dominant market share.
There are many reasons behind the impact, but the most important one is undoubtedly the cost-effective advantage of local companies. With the continuous emergence and doubling of wind power manufacturers in China, the domestic wind turbine market is highly competitive and overcapacity, and the price of the complete wind turbine has dropped from 6,500 yuan/kW in 2008 to about 3,500 yuan/kW later. Vestas still insists on the offer of 5,000 yuan/kW. With such a large gap, the choice of most customers can be imagined.
Although many international giants, including Vestas and Gamesa, have also tried various changes, and tried to win back the favor of the market through value-added services and operation and maintenance. However, by 2007, the newly added wind power capacity of China's domestic-funded wind power enterprises still exceeded that of foreign investment; by 2008, the cumulative installed capacity of domestic-funded enterprises had even reached more than 75%.
The help of relevant policies has become an indispensable "second leg" to accelerate the rise of local enterprises.
In order to reduce the investment cost of wind power and promote the development of the local wind turbine manufacturing industry, the state requires that the localization rate of wind power concession project facilities must reach 70%. And this policy is considered to have contributed to the first time that the share of local enterprises surpassed foreign enterprises. By 2010, Vestas had dropped to sixth in the newly installed capacity in the Chinese market, and eighth in 2011; and by 2013, it had dropped to 11th, accounting for only 3.2% of the installed capacity; the gold ranked first. Fengke accounted for 23.3% of the market, and the top five manufacturers accounted for 54.1% of the market.
So far, it is hard to find any trace of foreign capital in the list of the top ten companies with newly installed capacity.
A major turning point occurred in 2012, when Vestas China merged with Asia Pacific; the Hohhot project, which had been in operation for nearly 4 years, was forced to terminate. Vestas announced the termination of the production of kilowatt-level wind turbines in the Chinese market. As a result, the production of two major products, V52-850 kW and V60-850 kW fans, was discontinued across the board. This was the first time the company had developed a product for a specific market and was designed based on the needs of Chinese customers and partners.
The V52-850 was once considered a classic model launched by Vestas in the Chinese market, and was very popular in the early stages of production. But few people could have thought at the time that this was an important mistake for Vestas in the Chinese market. When domestic manufacturers see the scarcity of wind power resources and the booming prospects of China's wind power market, foreign capital is hesitant; when everyone is developing large-scale wind turbines above the megawatt level, foreign capital sticks to small wind turbines and falls behind again. When Vestas turned back and prepared to participate in the competition of large wind turbines, he found that the market had been carved up.
If international giants such as Vestas entered the megawatt-level wind turbine market directly in China, the situation in recent days may be very different.
"Change" and "unchanged" are better or worse, which is a paradox in business law. But what is certain is that extremes will reverse, and excessive adherence is likely to become "stubborn". Vestas has said that he has never lost money on any project, and "we will not do anything without commercial interests." But emerging regional markets are far more complex than one might imagine.
In addition to the supply of models, the key to Vestas' unwillingness to respond to the Chinese market with a more flexible price strategy (mainly "price reduction") is that the company has a set of global pricing strategies. Supplier transportation costs, etc., are not directly determined by the management in China.
The growth of China's local wind power companies may not only be a challenge to foreign companies such as Vestas.
According to the report of independent consulting firm MAKE, Vestas still maintains its position as the world leader in wind power, with a global wind turbine market share of 13.2%, and its power generation is 28% higher than the second place. Vestas leadership called 2013 the first year Vestas emerged from the crisis.
And with the installation of the world's largest 8MW wind turbine and the formation of a joint venture with Mitsubishi Heavy Industries for offshore wind turbines, it seems that Vestas has basically bid farewell to the difficulties in recent years. But obviously, it has become more and more difficult to maintain the global leading position for a long time. Because Chinese companies are making breakthroughs in clusters and are approaching their positions.
With the recovery of the domestic market, in 2013, Chinese enterprises again appeared in clusters on the global wind power enterprise rankings. Among the top 15 rankings, Goldwind Technology, United Power, Mingyang Wind Power, Xiangdian Wind Power, Envision Energy, Dongfang Power Co., Ltd. Eight companies including China Electric, Sinovel and Shanghai Electric were listed. Goldwind Technology, which ranked second, has a global market share of 10.30%, which is close to Vestas' 13.20%.
In the foreseeable three to five years, the market position and global market share of Chinese enterprises will be further improved. This is due to the recovery of the domestic market and the development of the international market. The two promote each other and transform each other. of. In the research and development of 5-8MW wind turbines, domestic enterprises may be three years behind as a whole, but in the research and development of super-large wind turbines of 10MW and above, everyone is basically on the same starting line.
If foreign manufacturers do not transform or take other measures to adjust their strategies in a timely manner, it will be difficult to win in the current global economic downturn and China's overcapacity of wind power equipment.