German veteran Dehen motor (brand Hanning) in Shenzhen manufacturing stronghold Longgang District set up factories production after 20 years, announced that the end of January will be packed away, relocated to India. This is the end of last year, following the U.S. precision manufacturing Stanley Baird, Japanese electronics factory Murata Manufacturing shut down the plant after the dissolution of another leading foreign capital to withdraw from the manufacturing capital of Shenzhen.
Dehen motor Shenzhen plant issued a notice, revealing that the reason for the closure of the plant is due to the mainland trade policy and supplier multiple reasons, resulting in cost growth, so the product line will be packaged from the Shenzhen plant all, relocated to India factory. Nearly 1,000 workers in the Shenzhen plant will be laid off on site.
With a history of 80 years, headquartered in Germany, Dehen Electric is a giant in the field of Home appliances, industrial automation motor manufacturing, customers around the world, only in Europe, China, India set up four branches.
In 2011, it set up a wholly-owned manufacturing plant in Shenzhen, mainly producing BLDC inverter motors and drive pump products.
Dehen Electric declared to move the plant in order to save costs, employees believe that although the mainland labor wages are not high, but India is cheaper.
The Securities Times reported that the real reason behind the withdrawal of foreign investment from Shenzhen, I am afraid that the disappearance of comparative cost advantages is an important factor.
Prior to the announcement of the closure of the factory at the end of January, Japan’s well-known electronic parts manufacturer Murata Manufacturing closed its Shenzhen subsidiary, Shenglong Technology, in December 2020.
Regrettably, Shenglong Technology has been in Shenzhen for 15 years and is half a witness to the rise of Shenzhen for 40 years. 2019 revenue of RMB 99.6 billion and net profit of RMB 13.1 billion. Each year can net tens of billions of RMB, still can not stop the operating pressure and shut down the plant.
A month before the shutdown of Shenglong Technology, the U.S. firm Stanley Baxter Precision Manufacturing (Shenzhen) announced a complete shutdown on October 26, 2020, disbanding the production line in advance. The Shenzhen plant is a wholly owned subsidiary of Stanley Patel set up in China, also announced the lights out after 11 years of setting up production.
Earlier, the precision optics factory Olympus (Shenzhen) shut down in 2018, in addition to Philips, Samsung Electronics, Epson, Honeywell, etc., also pulled up roots from Shenzhen to withdraw.
According to Qixinbao statistics, from 2015 onwards, the annual number of registered enterprises in the manufacturing industry in Shenzhen has been declining year by year, from 34,000 in 2015 to a total of 16,696 registered in 2020. Conversion of the current number of manufacturing industry in Shenzhen registered only about one-third of five years ago.
Market participants lamented that ten years ago, the manufacturing province of Guangdong in Dongguan launched the strategy of cage for birds, the current Shenzhen actually also step into the process of gradual transformation and upgrading of the manufacturing industry.
In recent years, Shenzhen plant rentals continue to rise, pushing up manufacturing-related costs. In addition to high housing prices, coupled with a significant increase in labor costs, coupled with the accelerated transformation and upgrading of the manufacturing industry, squeezing corporate profits, many foreign-funded enterprises to accelerate the withdrawal of Shenzhen.
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