Mexico Presents New Market for Chinese World LeaderWed, 02/19/2014 - 14:55
“Expanding operations into emerging markets in Latin America is both timely and strategic,” says Santiago Desentis, Mexico Country Manager for Yingli Solar. “Although many emerging markets, especially in Latin America and Asia, have long supported a relatively sizeable market for off-grid applications, we are beginning to see on-grid solar become more mainstream across all market segments.” The Chinese company, founded in 1998, recently hit the significant milestone of 1GW in sales to the Americas and the Caribbean. In order to be able to establish long- term partnerships with its customers and provide technical and marketing support, Yingli has corporate bases in San Francisco and New York, and offices in Mexico and Brazil. “This strategy has helped us become a more supportive and effective partner,” remarks Helena Kimball, Head of Marketing Americas at Yingli Green Energy Holding. “That is paying dividends: in the second quarter of 2013, we expanded our customer base in Latin America by 32% to more than 65 customers. Undoubtedly, having a local team in the region was a major factor in that growth.”
Mexico is a top growth market for the company and establishing a local presence was the first step towards gaining a solid market share. Yingli’s management team believes there will be a significant advantage for companies that enter the market early and develop a presence and brand awareness. “Major projects are starting to get underway and there is a concrete project pipeline, which makes this the right time to form strong partnerships in the market. We are primarily targeting large-scale projects and distributed generation projects, as these are the most attractive investment opportunities for our regional partners,” stresses Desentis.
Brand awareness is a crucial element in Yingli’s marketing strategy and the FIFA World CupTM is the perfect stage for it. “Our visibility as a sponsor is a tremendous driver for our brand awareness, especially in emerging solar markets in Latin America,” explains Kimball. “Importantly, our customers have told us that our sponsorship helps build awareness for solar energy in general, as our perimeter boards and advertisements read Yingli Solar, and much of our messaging is geared towards education concerning renewable energy.” The strategy seems to be paying off. “During the FIFA Confederations Cup this past June, the volume of inbound sales leads grew exponentially, which led to an increase in sales across the Latin American region,” Desentis adds.
Commercial, residential, and utilities are the company’s three main markets. Regarding the utility market, the size of Yingli’s operations is its biggest advantage. It has 2.45GW of nameplate manufacturing capacity and, according to Desentis, can provide the volume of modules required by large-scale projects on schedule. He also points out that the size advantage works to the company’s benefit in the commercial and residential market segments. “The fact that we have both local inventory and a dedicated local team are key differentiators from our competitors in the region. This has helped us build a deeper understanding of the local market, and given us the ability to respond quickly to changing market dynamics,” claims Desentis. Being the largest PV module manufacturer in the world allows Yingli to reduce costs, increase quality controls, bring new products to market more swiftly, and offer more competitive prices.
In order to clear up any doubts the client might have concerning the quality of the panels, the company performs rigorous in-house testing and has a comprehensive research and development strategy. Yingli also works with leading suppliers of key components such as backsheets, for which DuPont is a primary supplier, and tests new products and prototypes at three different R&D labs located around the world. If any doubts still remain regarding Yingli’s quality, its clients are offered the opportunity to visit its PV Testing Lab in San Francisco and its factories in China. Technical support is also a crucial element in providing customer’s satisfaction. “If a Mexican client was to ever experience an issue, they could send the products to our regional PV Testing Lab in California for support. This allows for a much faster turn-around time than would take place if claims were processed in China,” Kimball points out.
As the company moves forward in the Mexican solar market, some challenges remain. “The main issues we are currently looking at are on the policy side,” says Kimball. “We have to ensure that when the solar market develops, the right policies are in place for the sector to grow. Currently in Mexico, there is no policy for private companies to become deeply involved in the sector: the government is taking the leading role. We applaud the government’s virtual net metering policy, the goal to install 2GW of solar by 2025, and the plan to reduce greenhouse gas emissions by 30% before 2020. Nevertheless, we hope that policy developments that are more supportive of the market’s growth will take place.” In order to maintain its leading position, Yingli aims to continue providing affordable green energy and continue growing in the Latin American market. In Mexico, the company looks to grab 15% of the market share within one or two years, as well as to participate in many of the nation’s upcoming milestone projects.