China Speed is Not Just a Matter of Labor Costs

Analysis China Speed is Not Just a Matter of Labor Costs

2026-03-19 From Stefanie Eckardt | Translated by AI 2 min Reading Time

Related Vendors

The automotive industry from the Middle Kingdom is known for its China speed. Here, development is approximately 25 to 30 percent faster and 20 to 30 percent cheaper. According to the consulting firm Roland Berger, this has less to do with labor and energy costs but is rather the result of a consistently integrated development approach.

The "China Speed" analysis by Roland Berger shows that the speed of development has only a limited connection with labor costs.(Image: freely licensed at Pexels) — The "China Speed" analysis by Roland Berger shows that the speed of development has only a limited connection with labor costs.
(Image: freely licensed at Pexels)

Chinese industrial companies are regarded as the benchmark in terms of development speed and costs. This is not only the case when they develop or produce in China. As the "China Speed" analysis by management consultants Roland Berger shows, the efficiency of these companies is still between 50 and 80 percent when they relocate parts of their value chain to Europe.

Not a Cultural phenomenon

Contrary to widespread belief, China's cost advantage is only partially due to lower wages. The analysis by Roland Berger shows that approximately 60 percent of the cost advantage arises from design and system decisions, such as consistent standardization, reduced variety, and "fit-for-purpose" engineering, which focuses on market-relevant performance. Other drivers include competitive supplier structures and operational efficiency, rather than primarily personnel costs. "China Speed is not a cultural phenomenon, but rather the result of clear decisions regarding product design, portfolio complexity, and the supplier base. And this is precisely why part of it is also implementable in Europe," explains Oliver Knapp, Senior Partner at Roland Berger.

The management consultancy emphasizes that the speed in China is the result of a consistently integrated development approach. What adjustments are being made here? Chinese manufacturers shorten development times primarily through:

Significantly shorter strategy and decision-making phases
A high proportion of virtual tests of up to 80 percent
Parallel development of software and hardware
Early, systematic integration of suppliers

A concrete case study from the automotive industry shows that a Chinese car manufacturer was able to reduce its development time by 14 months compared to the global reference value, mainly through organizational and procedural adjustments, without compromising on marketability or product maturity.

What Opportunities Does Europe Have?

The analysis shows that China Speed is also possible in Europe—but only in a "stripped-down version." European companies still have key strengths: deep customer knowledge, regulatory expertise, strong brands, and a high reputation for quality. However, these strengths are losing effectiveness if cost gaps and development times are not significantly reduced or shortened. European companies can selectively adopt elements of the Chinese production methods and adapt them to their own systems. This would be a sort of "China Speed-Light" version. (se)

Subscribe to the newsletter now

Don't Miss out on Our Best Content

Business E-mail

Please enter a valid mailadress.

By clicking on „Subscribe to Newsletter“ I agree to the processing and use of my data according to the consent form (please expand for details) and accept the Terms of Use. For more information, please see our Privacy Policy. The consent declaration relates, among other things, to the sending of editorial newsletters by email and to data matching for marketing purposes with selected advertising partners (e.g., LinkedIn, Google, Meta)

Date: 08.12.2025

Naturally, we always handle your personal data responsibly. Any personal data we receive from you is processed in accordance with applicable data protection legislation. For detailed information please see our privacy policy.

Consent to the use of data for promotional purposes

I hereby consent to Vogel Communications Group GmbH & Co. KG, Max-Planck-Str. 7-9, 97082 Würzburg including any affiliated companies according to §§ 15 et seq. AktG (hereafter: Vogel Communications Group) using my e-mail address to send editorial newsletters. A list of all affiliated companies can be found here

Newsletter content may include all products and services of any companies mentioned above, including for example specialist journals and books, events and fairs as well as event-related products and services, print and digital media offers and services such as additional (editorial) newsletters, raffles, lead campaigns, market research both online and offline, specialist webportals and e-learning offers. In case my personal telephone number has also been collected, it may be used for offers of aforementioned products, for services of the companies mentioned above, and market research purposes.

Additionally, my consent also includes the processing of my email address and telephone number for data matching for marketing purposes with select advertising partners such as LinkedIn, Google, and Meta. For this, Vogel Communications Group may transmit said data in hashed form to the advertising partners who then use said data to determine whether I am also a member of the mentioned advertising partner portals. Vogel Communications Group uses this feature for the purposes of re-targeting (up-selling, cross-selling, and customer loyalty), generating so-called look-alike audiences for acquisition of new customers, and as basis for exclusion for on-going advertising campaigns. Further information can be found in section “data matching for marketing purposes”.

In case I access protected data on Internet portals of Vogel Communications Group including any affiliated companies according to §§ 15 et seq. AktG, I need to provide further data in order to register for the access to such content. In return for this free access to editorial content, my data may be used in accordance with this consent for the purposes stated here. This does not apply to data matching for marketing purposes.

Right of revocation

I understand that I can revoke my consent at will. My revocation does not change the lawfulness of data processing that was conducted based on my consent leading up to my revocation. One option to declare my revocation is to use the contact form found at https://contact.vogel.de. In case I no longer wish to receive certain newsletters, I have subscribed to, I can also click on the unsubscribe link included at the end of a newsletter. Further information regarding my right of revocation and the implementation of it as well as the consequences of my revocation can be found in the data protection declaration, section editorial newsletter.