Cisco is ‘very optimistic’ about its expanding business with China EVs

by | Jun 25, 2024 | Financial

Cisco established operations in China in 1994.Sopa Images | Lightrocket | Getty ImagesDALIAN, China — Cisco is “very optimistic” about its growing business with Chinese electric car companies as they expand overseas, the company’s Greater China head told CNBC on Tuesday.The EV segment is the U.S. tech giant’s second-largest for the region — Cisco generates most of its revenue in Greater China from manufacturing companies, and within that, electric cars form the largest category, said Ming Wong, vice president and CEO of Cisco Greater China.Chinese EV-makers have ramped up their global expansion in the last year as domestic competition intensified.However, trade tensions have escalated, with the U.S. and likely the European Union, increasing tariffs on imports of Chinese electric cars.That doesn’t necessarily restrict their growth. Chinese automakers, such as BYD, are investing in local factories.Cisco, which provides networking equipment and software for businesses, is working with at least 10 electric car customers as they build factories, offices and research and development centers overseas, according to Wong. “At least as of now, we don’t hear anything from the [EV] customers saying that, ‘Oh, because of this, we need to stop investing, or we need to slow down,'” he added.”It’s actually the other way around. A lot of things happening. They will keep pushing, going forward, and we’ll see how this will evolve.”It’s unclear how much spending such business expansion will generate, said Shiv Shivaraman, Asia region leader, and partner and managing director at consulting firm AlixPartners.”But you should expect that there is going to be manufacturing-related capex as well as office-related capex,” he said. “And I think tariffs will definitely accelerate, if not increase it.”Getting China businesses back to growthThe U.S.-based tech company has run into challenges in the China market as the two countries increasingly rely on domestic players in the name of national security.Cisco CEO Chuck Robbins told analysts in 2019 that the U.S.-China trade war resulted in a “significant impact” on its business in China.The company’s revenue in the country fell by 25% on an annualized basis in the quarter ended late Jul …

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[mwai_chat context=”Let’s have a discussion about this article:nnCisco established operations in China in 1994.Sopa Images | Lightrocket | Getty ImagesDALIAN, China — Cisco is “very optimistic” about its growing business with Chinese electric car companies as they expand overseas, the company’s Greater China head told CNBC on Tuesday.The EV segment is the U.S. tech giant’s second-largest for the region — Cisco generates most of its revenue in Greater China from manufacturing companies, and within that, electric cars form the largest category, said Ming Wong, vice president and CEO of Cisco Greater China.Chinese EV-makers have ramped up their global expansion in the last year as domestic competition intensified.However, trade tensions have escalated, with the U.S. and likely the European Union, increasing tariffs on imports of Chinese electric cars.That doesn’t necessarily restrict their growth. Chinese automakers, such as BYD, are investing in local factories.Cisco, which provides networking equipment and software for businesses, is working with at least 10 electric car customers as they build factories, offices and research and development centers overseas, according to Wong. “At least as of now, we don’t hear anything from the [EV] customers saying that, ‘Oh, because of this, we need to stop investing, or we need to slow down,'” he added.”It’s actually the other way around. A lot of things happening. They will keep pushing, going forward, and we’ll see how this will evolve.”It’s unclear how much spending such business expansion will generate, said Shiv Shivaraman, Asia region leader, and partner and managing director at consulting firm AlixPartners.”But you should expect that there is going to be manufacturing-related capex as well as office-related capex,” he said. “And I think tariffs will definitely accelerate, if not increase it.”Getting China businesses back to growthThe U.S.-based tech company has run into challenges in the China market as the two countries increasingly rely on domestic players in the name of national security.Cisco CEO Chuck Robbins told analysts in 2019 that the U.S.-China trade war resulted in a “significant impact” on its business in China.The company’s revenue in the country fell by 25% on an annualized basis in the quarter ended late Jul …nnDiscussion:nn” ai_name=”RocketNews AI: ” start_sentence=”Can I tell you more about this article?” text_input_placeholder=”Type ‘Yes'”]
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