A fast growing auto sector in China is prompting injection machine builders both foreign-invested and local to take a closer look at their product portfolios. The auto sector typically employs mid- to large-size machines, which offer machine suppliers better margins than for smaller machines where they face more competition from local suppliers.
Early on in the company's local manufacturing presence in China, Demag Plastics Group affiliate Demag Plastics Machinery (Ningbo) Co. focused primarily on small machines for the then booming export-oriented telecommunications segment. Machine shipments to this market segment accounted for around 60% of revenue versus 20% each for automotive and packaging. Recent years, however, have seen a switch in emphasis to the profitable auto sector, with 60% of annual machine production now delivered to processors active in this market segment. Meanwhile, the telecom sector's contribution has shrunk to just 10%....