Dekra Group mulls further expansion in nation
Germany’s Dekra Group plans to invest in a number of Chinese cities, such as Shanghai and Guangzhou, Guangdong province, to build bigger industrial parks and laboratories this year to sustain business growth, a senior executive said.
This decision has been driven by China’s surging export opportunities in sectors such as electric vehicles, household appliances, renewable energy and artificial intelligence-related products, coupled with the country’s efforts to attract multinational corporations to its trade in services industries.
In addition to intensifying investment in Shanghai and Guangzhou, the Stuttgart-based testing, inspection and certification (TIC) group with nearly 50,000 employees worldwide, will also expand existing facilities or build new laboratories in Suzhou, Jiangsu province and Hefei, Anhui province, this year.
“We foresee new growth drivers emerging in various sectors, particularly in technology and innovation, driven by continued reforms and opening-up policies,” said Kilian Aviles, senior vice-president for Dekra APAC and managing director of Dekra China.
Led by the development of new quality productive forces and Chinese manufacturers’ ongoing efforts to broaden their sales networks globally, Aviles said China’s ongoing commitment to advancing technologies such as artificial intelligence, 5G infrastructure, autonomous driving and renewable energy offers exciting opportunities.
Many countries enforce distinct regulations and standards for imports, making certification a critical step for access to numerous overseas markets. For Chinese exporters, securing certification from a well-regarded international TIC organization can offer substantial benefits in navigating these requirements.
According to this year’s Government Work Report, China will strive to modernize its industrial system and accelerate the development of new quality productive forces.
The country will undertake technological transformations and upgrade its manufacturing sector, create advanced manufacturing clusters, and establish national demonstration zones for new industrialization. These efforts are aimed at transforming traditional industries into high-end, intelligent and environmentally friendly ones, according to the report.
Aviles noted that China’s focus on sustainable development and environmental preservation is poised to spur demand for green technologies and services ensuring adherence to environmental standards.
“This trend aligns well with Dekra’s strategic focus areas, including future vehicles and mobility, information and cybersecurity, sustainability, artificial intelligence and advanced analytics, and remote services, presenting significant investment opportunities,” he added.
This stance is supported by recent data from the Beijing-based China Association of Automobile Manufacturers. China exported 822,000 automobiles in all, including electric vehicles, during the JanuaryFebruary period, up 30.5 percent year-on-year.
Established in 1925, Dekra has to date built a market presence in more than 60 countries and regions across the world. The company has forecast sales revenue to surpass 4 billion euros ($4.33 billion) in 2023. Supported by 2,000 employees, the German company currently runs testing facilities, laboratories and offices in 20 cities on the Chinese mainland, including Beijing, Shanghai and Hangzhou, Zhejiang province.
Highlighting the immense potential in China’s ongoing efforts to enhance its attractiveness to foreign investment, particularly through regulatory reforms, infrastructure development and market access facilitation, Aviles stressed that Dekra remains confident in the country’s ability to maintain its position as a premier destination for foreign investment.
Apart from providing TIC services to Chinese exporters, Dekra offers technical support and advisory services to help them improve their product design, manufacturing processes, and sustainability practices. This can lead to better product quality, efficiency and environmental performance, further boosting their competitiveness abroad.
Chu Xiangyin, a professor of supply chain management at the University of International Business and Economics in Beijing, said engaging with foreign TIC groups can help Chinese companies mitigate risks associated with noncompliance, such as product recalls, legal challenges or damage to brand reputation.
In the meantime, he said that the significant market demand and growth opportunities within China in areas such as new energy, digital transformation, intelligent manufacturing and e-commerce, along with the country’s extensive industrial support and integration capabilities, are prompting an increasing number of multinational companies to enhance their investments in trade in services-related businesses and expedite their research and development activities within the country.
In contrast to goods trade, trade in services refers to the sale and delivery of intangible services such as transportation, finance, tourism, technical and professional services, construction, advertising, computing and accounting.