Machine Tools & Equipment Market Analysis
Machine tools and equipment manufacturers provide the industrial equipment and technology for producing machines used by many other manufacturing and service industries.Their primary function is metal working. Examples include drill presses, lathes, grinding machines and multitasking machines that combine turning, milling, grinding and material handling. Most modern machine tools are automated. The USA is one of the world’s largest markets for machinery and also one of the largest suppliers of machine tools and equipment.
Key Market Segments
Important market segments for machine tools and equipment include:
Manufacturers of agricultural machinery used to grow, process, package, transport, and distribute food and beverages. Increasing demand for agricultural produce due to global population increase and technologically advanced machinery are likely to drive the global market for agricultural machinery to $122.9 billionin the short term and thus boost the market for machine tools for this industry.
Manufacturers of construction machinery include heavy trucks, road paving and earth-moving machinery, tractors, bulldozers and cranes. Caterpillar is one of the largest construction machinery manufacturers with more than $28 billion in sales.
Mining machinery includes bulldozers and backhoes, crushers, feeders and gravel pumps and other equipment for gold mining, gemstone mining, metal mining and mineral mining. Increasing mining activities in developing countries among other factors is likely to drive the market to more than $100billion in the foreseeable future and so to increase the market for machine tools and equipment.
Manufacturing machinery coverstools and equipment that find application in manufacturing industries such as automotive, aerospace and medical devices. It includes machine tools for cutting, stamping and forming metals, plastics and rubber manufacturing machinery and a wide range of cutting tools, dies and accessories.
Regional Market Shares
The world’s largest machine tool markets based on consumption are China, the USA, Germany and other Asian countries.
China is one of the world’s largest machine tool markets, both as a producing and consuming country. Purchases of machine tools in this country exceed $31 billion. Expansion in the country’s industrial machinery and transportation equipment industries is likely to drive the market for new machine tools in the short term.
In the USA machine tools area more than $8billion industry. The USA machine tools and equipment manufacturing industries are also strong and consistent exporters to neighboring markets like Canada and Mexico.
Germany, due to increasing purchases primarily from the automotive, plastic products, and aircraft and spacecraft industries is a more than $6 billion industry, making it one of the largest markets for machine tools.
The emergence of Asian countries in terms of economic growth and their keen interest in developing local manufacturing is fuelling investments in the development of their domestic machine tool industry. As a consequence, robust growth is seen in this industry in the developing countries, particularly in Taiwan and South Korea.
Key trends in the machine tools and equipment business include:
India has ambitions to become a key player in global manufacturing and is likely to see substantial growth in machine and tools business. At present India buys more than three times its own production of machine tools and so depends on imports from Europe and neighboring Asian countries to meet more than 35% of its demand. Thus there are significant growth opportunities for Indiantoolmakers, which are complemented by the “Make in India” campaign launched by the Indian Government to encourage multinational and domestic companies to manufacture there.
“Next shoring” is a recent trend seen in the tool manufacturing space. Global manufacturers are redefining their supply chains and production. Previously attractive off-shoring production locations in the developing countriesseem to be less appealing currently due to rapid wage increases, a rise in transportation costs andproblems of quality management at great distances. These factors are encouraging many companies to relocate production nearer to home markets. For instance, General Electric (GE) and Apple have shifted a major part of their production from China back to the USA. According to the Boston Consulting Group about 30% of exports from China could be domestically produced in the USA by 2020. This trend is likely to drive the market for machine tools and equipment in the advanced countries as manufacturing expands.
Additive manufacturing is changing the way machinery is used in production. For instance GE is departing from its traditional manufacturing processes in the aviation division and is preparing to produce a fuel nozzle for a new aircraft engine by printing the part with lasers rather than casting and welding the metal. GE is pursuing this technique to produce many of the complex parts that go into everything from gas turbines to ultrasound machines. The increasing adoption of technology such as this may erode the use of machine tools and equipment to a large extent in the future.
List Of Associations
- Indian Machine Tool Manufacturers' Association
- Association for Manufacturing Technology
- Association of Equipment Manufacturers
- National Tooling and Machining Association
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