European Wind Giant Aims for Bigger Piece of the Action in China
(Bloomberg) -- Vestas Wind Systems A/S, one of the world’s top wind turbine makers, is seeking to increase its footprint in China as the largest market prepares for a resurgence in demand.
The Denmark-based supplier aims to win as much as 10% of China’s wind market, according to Thomas Keller, chief executive officer of Vestas China. The company sold nearly 1.5 gigawatts of wind turbines in the country last year, making up less than 3% of total installations.
China’s wind market is expected to see demand pick up again after a slowdown from a record pace last year, when companies rushed to install projects before the expiration of government subsidies.
Beijing is pushing to accelerate the construction of large-scale wind power as it races to meet its climate goals, with President Xi Jinping earlier this month announcing massive renewable projects in the west of China. The heads of China’s two leading turbine makers, Xinjiang Goldwind Science & Technology Co. and Envision Group, both expect installations to recover soon.
Keller acknowledged the difficulties of the Chinese wind market, which is highly fragmented with at least 21 companies competing. “We are not No. 1 in China. It’s also a very hard aspiration to do,” he said in an interview Thursday.
Facing rising commodity costs and declining turbine prices, Chinese wind manufacturers have endured shrinking margins in order to compete. Vestas does not intend to join the price war.
“We are not currently looking into a very low cost turbine, because it’s not our preferred DNA,” Keller said. Vestas will aim to increase market share by focusing on delivering high performance and quality, he said.
Vestas merged its Chinese and other Asian units into one business region earlier this month as it seeks to expand across the region. Keller said the move will place China as a main supply center for the company’s global markets.
©2021 Bloomberg L.P.