Given the rapidly growing global solar market, 90 percent of the German PV machinery and plant manufacturers are expecting to improve their performance this year compared to 2013. They anticipate a 27 percent increase in sales in 2014, according to results of a survey presented at the recent annual meeting of the VDMA Photovoltaic Equipment trade association in Frankfurt. For the associations members, the main market remains China.
Last year, PV sales in Germanys machine and plant manufacturing sector plunged 45 percent to 700 million compared to 2012, when sales reached 1.3 billion, according to VDMA figures. The number of members in the VDMA Photovoltaic Equipment trade body part of the German Engineering Association (VDMA) likewise fell last year, from 50 to 45, according to managing director Florian Wessendorf. The machine builders that could best survive the crisis were those able to offset declining PV business with increased sales in other areas.
Despite more positive outlook for this year's PV business, the mood at annual VDMA meeting was anything but cheerful. Chinese tier 1 manufacturers, the sectors main clients, are again investing in capacity expansion and new lines, but competition from Chinese machine builders is growing and there is no simple answer as to how best to counter that development. Members reacted with skepticism to a proposal by management consultant Thomas Beducker of Simon Kucher & Partners , who recommended the PV mechanical engineers adopt a "two-product line strategy" and offer scaled-down products with reduced service for the "medium market."
Indeed, a number of companies that are operating successfully in the Chinese market. "Service, service and service again" is a key factor for success in China, stressed Axel Riethmueller, head of solar technology at Teamtechnik.
The market leader for stringer systems, based in the Baden-Württemberg city of Freiberg, has been manufacturing in Jintan, China, since 2010. The stringer systems produced in Germany are shipped to the plant in China as a kit and assembled there. The product and service quality of the installed machines in China does not differ from those manufactured entirely in Germany, Riethmueller said. However, the stringer systems Teamtechnik sells in China work with infrared technology and not with the more expensive and complex laser technology.
"In our experience, the quality awareness in China is high, but this does not mean that the products have to be over-engineered," Riethmueller added in an interview with pv magazine. One of the main reasons Teamtechnik operates a factory in China is to offer faster delivery and maintain a local presence. Its also the reason a number of other German companies, such as h.a.l.m. Electronik (which specializes in cell and module measuring instruments) and Krempel (backsheets), are present in China with their own assembly plants and offices.
Both h.a.l.m. CEO Axel Metz and Karl-Heinz Brust, head of solar material application technology at Krempel, underline the importance of quality for their Chinese customers and for this reason they sell exactly the same products in China, by far their most important market, as in Germany.
Attendees at the VDMAs annual meeting could not decide whether a "two-product line strategy" might be useful in less developed markets, such as India. However, it was clear that local production facilities in new emerging PV markets such as South Africa and Brazil could be interesting for PV equipment manufacturers can be interesting, but such endeavors also carry significant risks, they added. Wolfgang Herbst of Constance consulting company Viridis.iQ stressed that the business environment (including payment behavior) and the economic viability of smaller local assembly plants are critical in many cases. Such projects are usually quite complex and require a systematic examination and preparation, he added.
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