Vestas Says Chinese Market Shifting to Higher Quality Turbines

China’s wind park developers are increasingly seeking higher-quality turbines rather than just picking the cheapest machines, Vestas Wind Systems A/S (VWS) said.

Morten Albaek, the chief marketing officer for the world’s biggest wind turbine maker, said China’s leading developer of the facilities, China Longyuan Power Group Corp. (916) has said it’s focusing on quality as it picks from 70 domestic suppliers.

“Chinese customers are becoming more demanding and insightful,” Albaek said in an interview in London today. “Customers have started focusing not only on the price, but also the long-term profitability of the investment, which depends on quality.”

Vestas last year took 3.8 percent of the Chinese wind market and has 5.7 percent of the total installed wind capacity in the nation. Gains by Chinese manufacturers have trimmed prices across the industry, squeezing margins for European manufacturers.

Now, even the Chinese manufacturers are “challenged” by falling profitability, said Albaek.

Xinjiang Goldwind Science & Technology Co., China’s biggest maker of wind turbines by market share, on Aug. 24 said first- half profit fell 83 percent because competition intensified. Sinovel Wind Group Co., the second-biggest, two days later said first-half profit declined 96 percent.

“If you look at the reports from Goldwind, Sinovel and other large manufacturers, you can see they are challenged like the rest of the global wind industry,” Albaek said. “Their earnings are dropping. Whether you’re a Chinese company or not, It’s unsustainable not to earn money.”

To contact the reporter on this story: Alex Morales in London at amorales2@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

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