German machinery makers are taking steps to deal with growing competition from China."We have to be vigilant," festger, President of the German association of machinery manufacturers, told ReutersCompanies have to innovate to distance themselves from Asian competitors."Festger stressed that German companies must always maintain their advantages.At the same time, middle - and low-priced products should be added to further expand local production.The President of the association of machinery manufacturing industries said there would be no large-scale wave of German companies buying Chinese companies or Chinese people buying machinery manufacturing companies in Germany. 

China is already the third largest exporter of machinery

Three-quarters of German machinery is exported abroad.China, the us, France and Russia are its biggest markets.But for years, China's machinery products have been strong in the world market.In 2012, China surpassed Japan as the world's third largest machinery exporter, with a market share of 11%, according to a survey by the German association of machinery manufacturers.Germany's machinery products in the international market accounted for 16.1%, is the world's largest exporter of machinery and equipment, the United States accounted for 12.1% of the international market, the world's second. 

German machinery makers typically invest 4.5% of their profits in new product development and technical improvements, Mr. Festger said.But quality alone is no guarantee of a successful international market."We also have to find the right mix of products that customers at all levels can afford," festger says.This can be achieved through cooperation with local manufacturers.In addition, manufacturers can build protective walls for their high-end products by providing simple mechanical equipment. 

Festger, 67, took over as President of the German association of machinery manufacturers in mid-october.The federation represents about 3,100 German manufacturers.Germany's machinery industry is mostly small and medium-sized, with 1m employees and an annual turnover of €200bn.Large listed companies such as thyssen-krupp, kyie or demajisen are also members. 

There will be no wave of corporate mergers

The German association of machinery manufacturers reckons that global turnover will grow by 5% in 2014.China also plays an important role.China's machinery industry alone is expected to grow by 7%.However, festger believes that German companies in China mergers and acquisitions will be only a few cases.Trumpf, a German machinery maker, recently bought a majority stake in jinfangyuan, a Chinese company based in jiangsu province, after two years of talks.Festger says Chinese companies often have large Numbers of employees but lack new technology, which makes them unattractive to investors.There are about 200 German machinery manufacturers wholly owned by China, and three times as many sales and after-sales companies.As a result, Germany invests more in China than China does in Germany. 

In recent years, more and more Chinese companies have come to buy German companies.For example, xugong group acquired German concrete pump manufacturer Schwing, sany heavy industry (600031) acquired concrete machinery manufacturer Putzmeister.Hebei lingyun industrial group took over the auto parts manufacturer Kiekert.Festus worries about this trend."I am very concerned that the Chinese are coming with a lot of money to buy German companies," he said.Family businesses that have no successors or are in financial trouble could be targeted.But festger does not expect a wave of big acquisitions.