Globalisation

How internationalisation can affect your business

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Another great fear of European manufacturers is the influence of the recent US election on European companies. The biggest fear refers to Trump’s announcements during his election campaign. He is very skeptical of free trade agreements. If Trump continues with his protectionist proposals in 2017, effects will be felt in Europe, too.

VDMA Executive Director Thilo Brodtmann stated: “We wish the new president all the best for a good start in his new role. But since he was elected, there is growing uncertainty about the future economic direction of the USA – and insecurity ultimately results in reluctance to invest. The first sign of this could be machine deliveries to the USA, whose decline accelerated in the fall of 2016.”

Protectionist plans influence all trading companies

“If Donald Trump goes through with introducing punitive tariffs to force domestic and foreign companies into keeping their production sites in the USA or building new ones there, this may very well result in the preservation of some company sites in the short term," commented Ulrich Ackermann, Head of the VDMA's Foreign Trade department. "In the medium and long term, however, such coercive state policies will lead to investors looking for opportunities elsewhere – which ultimately translates into losses in economic prosperity.”

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Asked about his perspective on the influence of Trump on German machine tool manufacturers, Heinz-Jürgen Prokop, chairman of the VDW (German Machine Tool Builders’ Association) said: "We see the greater danger in Mexico. If import restrictions really are established for products from Mexico, this would affect us directly." This is another consequence of internationalisation: Many markets feel the effect of changes in another market because it influences not only itself but all countries that are economically dependent on it.

Regardless of concurrent political changes, many European associations are rather optimistic about the future. They are certain about their place in the global economy. And while they admit to doubts concerning the political future, they are quite self-assured about their prospects: Europe is leading in manufacturing, which means that European products are essential for foreign markets. This is not going to change due to political changes.

European associations feel confident about 2017

In concluding his report on the perspective of German machine tool manufacturers, Heinz-Jürgen Prokop affirms that the German machine tool industry is well equipped to meet the challenges of the future: "It is doing intensive work on weather-proofing itself for the storms of international competition."

According to Cecimo, the European Association of Machine Tool Industries, the latest economic indicators show that the business cycle is in a rather stable phase. The forecast for 2017 also points towards growing demand in 2017.

In conclusion, one thing can be said about internationalisation in tool and mould making: There will be winners and losers. Companies that want to succeed, need to find their own niche, where they can clearly stand out against other companies. They have to concentrate on customer service and consultation to distinguish themselves from their competitors abroad. Last but not least, they have to adapt to the changes of Industry 4.0 to stay one step ahead.

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