INTERNATIONAL BUSINESS
Tuesday, May 18, 2004
Siemens to invest ?1 bn in China
PTI
SHANGHAI: Siemens AG plans to invest ?1 billion ($1.19 billion) in China, as Germany's largest engineering company tries to catch up with Nokia and Motorola in the world's biggest mobile-phone market by users.
Siemens will increase handset production by two-fifths and double China sales within the next five years, chief executive Heinrich von Pierer said in Shanghai.
Siemens is betting that demand for telecommunications, power equipment and transport in China will boost earnings growth as sales decline in Europe and other markets.
The Munich-based company this month formed a power venture in Henan province and signed a mobile-phone distribution agreement with Ningbo Bird, China's biggest domestic handset maker.
Siemens, the world's fourth-biggest mobile-phone maker, ranks ninth in China, according to state-backed researcher CCID Consulting. The German company has an overall handset market share of 4 per cent to 5 per cent, which it aims to double within three years, von Pierer said.
Nokia has 15 per cent of China's handset market, followed by Motorola with 14 per cent. Siemens plans to increase capacity in Shanghai to 20 million handsets from 14 million by 2005, von Pierer said.
The accord signed with Ningbo Bird will allow Siemens's IC Mobile unit to use Bird's network of 30,000 mobile-phone shops. The companies will also develop mobiles under the Bird brand.
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