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US Machine Tools in China Market

  • December 2013
  • -
  • Freedonia
  • -
  • 253 pages

Summary

Table of Contents

INTRODUCTION

The Freedonia Group Incorporated is a leading international industry study/database company. Founded in 1985, Freedonia publishes more than 125 studies each year, covering such areas as building materials, chemicals, health care, packaging, pharmaceuticals, plastics, security, and many other industries. Studies cover entire industry sectors as well as key niche markets. Each study includes such valuable intelligence as growth markets and products, market share, product analyses and forecasts, market analyses and forecasts, and company profiles. Studies specific to China also place the industry into its international context.
This study analyzes the machine tool industry in China. The following types of machinery are covered: metal cutting machines (such as lathes, milling machines, drilling machines, boring machines, machining centers, grinding machines, electrical discharge machines, and others), metal forming machines (pressing and forging machines, bending and shearing machines, and others) and machine tool accessories (measuring tools, cutting tools, and tool holders and headings). The major markets for machine tools covered in the study are industrial machinery, transportation equipment, primary and fabricated metals, and electrical and electronic products.

Excluded from the scope of the study are tools designed for wood processing or home use, as well as industrial pattern, welding apparatus, and other types of metalworking machinery. Also excluded are hand-held, manual, and portable power tools. The Special Administrative Regions of Hong Kong and Macau are excluded from the scope of this study. Both Hong Kong and Macau remain, to a great extent, economically independent from the rest of the country, even though they returned to the People’s Republic of China in the late 1990s. Taiwan, which is economically independent from the rest of China and not under the administration of the central government, is also excluded from the scope of this study.

Historical data for 2002, 2007, and 2012 and forecasts for 2017 and 2022 are provided in current yuan for machine tool demand, shipments, imports, and exports, as well as for all major machine tool markets. Historical data and forecasts for demand by detailed product classifications and regional market are also in current yuan. The term “demand” -- used interchangeably with “market,” “sales”, and “consumption” -- is defined as all shipments from Chinese plants, plus imports, minus exports.
The renminbi (or RMB) is the official currency of the People’s Republic of China, and the base unit of the renminbi is the yuan. The term “yuan” is used throughout this report when referring to currency amounts. The overall value of construction expenditures is also provided in US dollars. Generally, the official currency exchange rate is used in each year to convert current yuan to current dollars (with the November 1, 2013 exchange rate being used for 2017 and 2022).

In addition, major machine tool manufacturers active in China are identified and profiled, and the key competitive variables are discussed. The entire report is framed within the Chinese machine tool industry’s economic and market environments, and variables affecting machine tool supply and demand in the country (such as government plans and regulations, inflation and interest rates, manufacturing production, gross fixed capital formation, population trends, and overall economic performance) are emphasized. Machine tool market share data by enterprise presented in the “Industry Structure” section is estimated based on consultations with multiple sources. Tabular details may not always add to totals due to rounding. Economic and demographic indicators presented in this study were obtained from The Freedonia Group Consensus Forecasts dated June 2013. A wide variety of primary and secondary sources were used in the compilation of this report. These include the China Industrial Machinery Association, the China Machine Tool & Tool Builders’ Association, the China Machinery Industry Federation, and the Chinese Mechanical Engineering Society. Also used were data from Chinese government statistical agencies (principally China’s National Bureau of Statistics), as well as other government bodies such as the Ministry of Commerce and the Ministry of Industry and Information Technology.

In addition, data and background information were obtained from various news and trade publications, including China Automotive News, China Daily, China Industry News, Machine Tool Electric Apparatus, and Manufacturing Technology & Machine Tool. Corporate annual reports, product literature, and unpublished data obtained through personal contacts were also used in framing the industry and market environments and as input for market size assessments. Statistics from various sources were carefully examined during the preparation of this study, and contradictions and discrepancies among data sources were noted. The accuracy and reliability of figures from each source were evaluated, and adjustments were made where deemed necessary. This was done in order to arrive at a consistent set of machine tool industry statistics,
which are based on the best available information at the time of publication. As a result, the data presented here may differ, sometimes substantially, from figures issued by official government sources.

Demand in China to grow 9.2% yearly through 2017

Demand for machine tools in China is forecast to increase 9.2 percent per year to ¥600 billion in 2017. Gains will be stimulated by healthy growth in manufacturing production, especially in the industrial machinery and transportation equipment industries. In addition, a continuing shift in the product mix toward higher-value product types such as machining centers, CNC machine tools, and multitasking machine tools will help drive market advances in value terms. Moreover, increasing regulations regarding energy conservation will lead to growth in demand for energy-efficient machine tools.

Shipments to slightly outpace domestic demand

Machine tool shipments in China are projected to slightly outpace demand through 2017, benefiting from sizable expansions in the domestic market as well as rising demand for Chinese machine tools in a number of export markets as the quality of Chinese machine tools continues to improve. Exports of machine tools will rise at a strong annual through 2017, driven by improved product quality, especially in small CNC machine tools, while prices remain competitive. Government policies to subsidize the research and development of high precision, high speed, and relatively more sophisticated machine tools will also support product sales. China will continue to see its trade deficit in machine tools expand for the foreseeable future. As imports rise through 2017, foreign suppliers will continue to benefit from growing demand for the precise and sophisticated machine tools needed to manufacture advanced machines. In addition, decreases in tariffs on imported machine tools will also drive sales of imported products through 2017.

Metal forming machine tools to be fastest growing

Metal cutting machine tools will continue to be the largest product segment in 2017, benefiting from their relatively wider range of applications in durable goods production and a comparatively greater variety of metal cutting product types. In addition, growing demand for highlyadvanced and comprehensive metal cutting machines -- especially for machining centers and multitasking machines -- will further boost product sales. Growth in demand for metal forming equipment is forecast to slightly outpace that of metal cutting machine tools through 2017, benefiting from strong growth anticipated in the motor vehicle, shipbuilding, aerospace, and power transmission and distribution industries.

Gains in key markets to track average industry pace

The industrial machinery and transportation equipment markets have the largest impact on overall machine tool sales, as they accounted for well over half of all demand in 2012. Gains in these two markets are forecast to be near the market average through 2017. Sustained plans to expand durable goods production, facility renovations, and new product innovation in all markets will continue to stimulate growth. Machine tool demand in the electrical and electronics market is also expected to expand near the average rate through 2017, benefiting from strong increases in fixed investment in the home appliance and power generating equipment industries. Machine tool demand in the primary and fabricated metal market will be spurred by continued expenditures in construction projects.

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