MOTEG wagt den Schritt nach China! Nach intensiver Vorbereitung und enger Zusammenarbeit mit der Jiangning Development Zone hat MOTEG sein neues Headquarter in Nanjing eröffnet. In der Xinhua Daily spricht Vertriebsleiter Fan Mu über die strategischen Chancen, technologische Innovationen und die Rolle von MOTEG als Vorbild für deutsche Mittelständler in China.
“Small but Delicate”, this German Company, with a 3-year Preparation, Invested to Set up their Headquarter in China. The Foreign Investment in Nanjing Booms in a Huge Number.
Reporter Xiang Dong, Correspondent Yang Liu, Xinhua Daily newspaper
After more than half a year, after joint efforts by Nanjing investment and promotion departments, Moteg, an electric drive equipment manufacturer from Germany, finally made the decision to cross the ocean. In early July, the company invested and established the Moteg Electrical Engineering (Nanjing) Co., Ltd. in the Jiangning Economic and Technological Development Zone, the regional managing director Mr. Mu, Fan believes this move is of great significance. “This investment in Nanjing is our first step to enter the Chinese market!” he said.
Small but delicate, specialized and refined, is a vivid portrayal of Germany’s innovative SMEs (small and medium-sized enterprises), many subdivided fields of cutting-edge technology, hidden in the scale of only a few dozen innovative enterprises. Moteg, for example, is one of only five companies in Germany funded by the European Green Deal and one of the few motor manufacturers with aviation certification (EN 9100)，and can be described as the “sweeping monks*” with unique and powerful techniques.
The electric air compressor, which weighs only 29 kg with a volume of just 35 L, has made a name for itself in the European market with its lightweight design. Moteg is advancing technology iteration at a three-year cycle, and its third-generation motor will be unveiled at the Hannover Motor Show in Germany in this September. Remarkably, the first generation of the product, launched in 2017, is still operational today, demonstrates impressive stability and reliability.
However, the “sweeping monks” often face challenges. Despite their technical prowess, many remain small in scale, with relatively limited risk resistance. When their operations in Germany and Europe already guarantee stable profits, they tend to be cautious about overseas expansions, particularly regarding investments in China. “Whether we have target customers, the size of the niche market, and how receptive customers will be to our products–these are crucial factors influencing our investment decisions,” Mu Fan explained.
What they didn’t expect was that Nanjing welcomed this „small enterprise“ from an industrial power with open arms. “From a macro perspective, the manufacturing volume of the Development Zone is indeed supported by pillar large enterprises, but we do not have a ‘scale theory’, especially for such innovative SMEs that have mastered core technology, they can quickly integrate into the industrial ecology of the Development Zone, supplement and extend the chain for the intelligent manufacturing industry, and our industrial system and innovation elements can also empower the enterprise, bring partners, high-quality customers and top-tier talents, and promote the accelerated development and growth of Chinese companies, which is the huge explosive force behind the project.” Lu Youkang, director of the Third Bureau of Investment Promotion of Jiangning Development Zone, said.
In November last year, the investment promotion delegation composed of Nanjing Investment Promotion Bureau and Jiangning Development Zone went straight to Flensburg, Germany, to visit and exchange at Moteg’s headquarter.
Given the significant nature of overseas investments, Moteg’s leadership initially hesitated to engage in detailed discussions, only requesting assistance in finding potential partners in Nanjing. After comprehensively sorting out the enterprises in the area, Jiangning Development Zone recommended two companies in the same industrial chain to Moteg.
They are both potential partners and validators of technical value. Through initial business discussions and product experience, the two companies quickly realized the advanced and scarce nature of Moteg’s core technology, and fed back the results to the Development Zone, which strengthened the determination to strive for the implementation of the project.
The investment promotion strategy has also changed considering the small scale of Moteg and the fact that it is new to the Chinese market, a period of transition is inevitable. Therefore, instead of choosing the traditional “VAM (valuation-adjustment mechanism) agreement”, the Development Zone has tailored a full-cycle support plan for enterprises to match incentive policies at different stages of technological development.
In the following six months, Moteg’s executives made multiple visits to Nanjing to inspect facilities, assess the industrial estate, and visit potential partners. With each visit, their confidence grew. “The amount of the initial investment is not large, but it equals nearly the total profit of Moteg in the past three years, which is enough to represent our attention and determination to develop in Nanjing and explore the Chinese market.” Mu Fan emphasized.
“The scale of this investment is not outstanding in terms of direct contribution to investment indicators and performance.” Lu Youkang believes that the greater significance of spending great effort to attract the project is to create a successful case for Germany SMEs investing in Nanjing, dispel the concerns of German enterprises to invest overseas, form a demonstration effect, and attract more high-tech enterprises to come across the ocean.
In April this year, the Germany SME Innovation Cooperation Matchmaking Conference, jointly sponsored by the Nanjing Science and Technology Bureau, the Nanjing Investment Promotion Bureau and the Gulou District People’s Government, was held in Nanjing. The BVMW (German association for small and medium-sized businesses), which gathers one-third of Germany’s „hidden champions“, inaugurated the Nanjing Service Center in Gulou District.
“Affected by multiple factors such as the energy crisis, Germany’s SMEs are generally facing problems such as rising costs, and they are also seeking new development space abroad. The Chinese markets, particularly in Jiangsu Province, offers substantial potential.” Tang Zhihong, head of the Nanjing Service Center, said that by expanding the cooperation network, building a cooperation platform and establishing an industrial fund, it will build a “bridgehead” for Germany SMEs to invest in Nanjing.
Moteg, which is shouldering the important task of “model room”, is rapidly embarking on a new development track. “Conduct in-depth market research first, use the research results to guide the new company to establish a new product system suitable for Chinese customers.” Mu Fan revealed that the company also intends to explore opportunities in the aerospace engines sector, potentially collaborating with aerospace manufacturers in the Jiangning Development Zone to integrate German technology with emerging productive forces. In the next 2-3 years, Chinese companies should gradually set up administrative, R&D, production and sales departments, and strive to create a more three-dimensional, more comprehensive and localized “Chinese version of Moteg”.
This coincides with the thinking of the investment promotion department. “Germany’s SMEs investing in China is the trend of the times. Whoever can take the lead in creating the most scientific, smoothest and most high-quality attraction and service system will be able to set up a ‘golden signboard’ and be favored by more Germany enterprises going overseas. We must seize the current initial development stage, which is the best opportunity for Jiangning Development Zone.” Lu Youkang concluded.
* Sweeping monks is a metaphor from Chinese culture, referring to individuals who are low-profile but highly skilled.