​Industrial Automation Industry: Inward Competition Dilemma, Seeking Solutions Overseas

Background Introduction:  In the field of industrial control, many enterprises have actively expanded overseas markets and participated in international competition by establishing production bases, conducting cross-border mergers and acquisitions, building sales networks, initiating foreign investments, and transferring technologies. This has gradually brought "Made in China" to the global stage.

As China's demographic dividend gradually fades and the domestic market approaches saturation, going global has become a crucial strategic move for enterprises seeking new growth opportunities. Compared to the domestic industrial control market, the overseas market is significantly larger. In 2023, the global industrial automation market is expected to exceed RMB 1 trillion, with China's industrial control market accounting for approximately one-quarter of the global market. This presents a vast opportunity for Chinese brands to expand overseas.

In the field of industrial control, numerous enterprises have taken active measures to expand their presence in overseas markets and engage in international competition. They have done so by establishing production bases, conducting cross-border mergers and acquisitions, building sales networks, initiating foreign investments, and transferring technologies. These efforts have gradually brought Chinese manufacturing onto the global stage.

Inovance Group  

As a company with a global vision and forward-thinking approach, internationalization has always been a core strategy for Inovance Group 's development. As early as 2012, the company began its international expansion, successively establishing subsidiaries such as Hong Kong Inovance Group and India Inovance Group to serve markets in Southeast Asia and Korea. After a decade of growth, Inovance Group 's overseas services have covered more than 20 countries, and its overseas market team has exceeded 200 employees.

To align with the company's internationalization process and meet the increasing demand for localized supply from international clients, Inovance Group officially established its first European production base in Hungary in 2022. Currently, the Hungarian factory serves as Inovance Group 's logistics hub in Europe and has already begun trial production of some elevator electrical products. It is expected to achieve mass production and delivery by the end of 2023.

In Southeast Asian markets such as Vietnam and Thailand, Inovance Group 's overseas team has provided clients with high-stability and energy-efficient solutions tailored to industry trends, market capacity, and technological requirements. This has effectively met the diverse needs of clients.

Supcon Technology Co., Ltd.

Supcon Technology has continuously strengthened its market presence and expansion in overseas regions such as Southeast Asia, the Middle East, Africa, and Eurasia. It has established subsidiaries in countries including Singapore, Saudi Arabia, Japan, the Netherlands, India, Malaysia, and Indonesia to enhance its localized operational capabilities and provide better services to overseas customers. As a result, the company has successfully promoted its core products to over 50 countries.

Supcon's overseas projects often follow a strategy of initially establishing a foothold through individual projects and gradually expanding its presence through benchmark projects. Currently, the company has been included in the A-list supplier directories of several large overseas customers, validating the strength of its products and services. In the future, Supcon expects to further penetrate these markets, leading to gradual increases in its gross profit margin and net profit margin. Currently, overseas revenue accounts for only 4% of the company's total revenue. In 2022, the company signed new contracts worth RMB 518 million and generated revenue of RMB 250 million. In the first half of 2023, it signed new contracts worth RMB 304 million, representing a year-on-year increase of 109.6%.

Invt Electric Co., Ltd.

In recent years, Invt Electric has successfully expanded into several international markets, including Australia, France, and Italy. This expansion has significantly increased its market share and influence, laying a solid foundation for its leadership position in the global photovoltaic industry. The company has achieved remarkable success in overseas markets.

In the first half of 2023, the company achieved overseas revenue of RMB 761 million, representing a year-on-year increase of 61.48%. Its overseas revenue accounted for 26.3%, 27.6%, and 34.5% of its total revenue in 2021, 2022, and the first half of 2023, respectively, indicating rapid growth. According to the company's 2023 interim report, this growth was primarily driven by strong sales of industrial automation products, UPS systems, and photovoltaic inverters in overseas markets, particularly in emerging markets, the Commonwealth of Independent States, Africa, and the Americas. In terms of gross profit margin for overseas business, the company achieved 31.1%, 38.1%, and 41.4% in 2021, 2022, and the first half of 2023, respectively, indicating a continuous improvement in its overseas profitability.

Megmeet Corporation

Megmeet has a global presence, with operations spanning over 40 countries and regions. The company has established overseas research institutes in Germany and Sweden, production bases in Thailand and India, and overseas marketing and service resources in the United States, Japan, Russia, Germany, Poland, Romania, Turkey, and India. Its R&D institutions collaborate closely through multisite integration, focused development, and cooperation to achieve effective allocation of research and development resources.

At the end of October, Megmeet held a groundbreaking ceremony for its production base in the Thai-Chinese Rayong Industrial Zone in Rayong, Thailand. The project will construct 15 SMT production lines and supporting PCBA assembly lines, with an expected annual output value of RMB 2 billion once fully operational.

VEICHI  Electric Co., Ltd.

VEICHI  Electric has established an Indian subsidiary overseas and operates five warehousing centers in Suzhou, Dongguan, Shijiazhuang, Zhengzhou, and India. As of June 2023, the company had 248 domestic dealers and 41 overseas dealers.

In the first half of 2023, VEICHI  Electric's overseas market performance was impressive, with a year-on-year increase of 173.88% in overseas revenue. As of June 2023, the company had 248 domestic dealers and 41 overseas dealers. From 2020 to 2022, the company's overseas revenue was RMB 47.99 million, RMB 71.36 million, and RMB 203 million, respectively, accounting for 8.39%, 8.71%, and 22.39% of its total revenue. The proportion of overseas revenue has been continuously increasing, with the company's overseas customers mainly located in developing countries and regions along the Belt and Road.

Haozhi Electromechanical Co., Ltd.

In 2021, Haozhi Electromechanical established an international business unit under its marketing department, participated in overseas industry exhibitions, and established business relationships with overseas distributors. Through high-quality overseas distributors, the company has opened up overseas markets.

To meet overseas market demand, Haozhi Electromechanical showcased several star products at the EMO exhibition in Germany, including machining center spindle motors, torque motor heads, precision DD turntables, air-floating ultraprecision spindle motors, large-thrust linear motors, harmonic reducers, robot joint modules, and six-dimension torque sensors. Additionally, the company displayed high-end products from the Infranor Group, such as control systems, servo drives, and servo motors.

From the perspective of overseas markets, emerging markets such as Southeast Asia and India are experiencing rapid growth. Domestic manufacturing companies are accelerating their expansion into these markets, and domestic industrial control brands are highly competitive in terms of cost-effectiveness, making them well-positioned to replicate their domestic growth path. Domestic industrial control enterprises can leverage customization, rapid response, and price advantages to gain a foothold in these markets.

It's worth noting that developed markets in Europe and the United States have high standards for product quality and technology. Domestic industrial control enterprises can enter these markets by establishing local R&D centers and building channels to reach high-end customers. Leading companies in the industrial control sector are expected to make breakthroughs in these markets first.

Source：www.chuandong.com