Dr. Wilfried Schäfer, Director of VDW (German Machine Tool Manufacturers Association) shares his views on the latest trends and market scenarios of the German machine tool industry.
What is the current market scenario of the German machine tool industry?
The German machine tool industry is setting production records one after another. In 2017, the sector achieved growth of 4 %, and will thus, according to the provisional results, reach a volume of around 15.7 billion euros. For 2018, VDW is expecting production output to increase by another 5 %.
In terms of new technologies and concepts such as automation and Industry 4.0, what are the latest trends in the sector?
It is obvious that companies will not be able to shut themselves off from digital transformation, if they want to remain competitive in the future as well. Experts for example predict that digital platforms will play an increasingly significant role in new business models. This gives machinery manufacturers opportunities to determine the course of the platform themselves with clever business ideas.
Therefore VDW works on an interface standard, which will considerably simplify digitalisation and make it more cost-effective, medium-sized firms will then also be able to exploit the potential of such platforms more easily. That is one point.
Another one for instance, is that in many cases there are bottlenecks in certain professions. The purely numerical bottleneck in terms of specialist staff is, we are now observing, accelerating the progress of automation. Many machine tool vendors are increasingly favouring the idea of an autonomous machine, which performs machining processes more independently of an operator’s availability.
Which are the important markets you are targeting for growth of the German machine tool sector?
Let me pick up just one example: The automotive industry together with its components and system suppliers remain the most important customer branch for the machine tool industry. For the numerous mid-tier companies, who have tailored their corporate capabilities entirely to these, the change-over to electro-mobility is a major challenge. Therefore VDW analysed the development in a big study.
The most important result is that by 2030, the proportion of purely electric-powered cars in Europe, USA and China is predicted to be about a fifth of new registrations. Conversely, 60 % of new registrations, with a continuing uptrend, will be hybrid vehicles in different combinations, and the rest, with a continuing downtrend, will be optimised internal combustion engines.
The concomitant decrease in metal-cutting volume is firstly more than offset by the global rise in total registrations for cars, driven by the growing demand in China. Secondly, we are seeing increased complexity of internal combustion technology combined with electric drive concepts. Therefore production technology will have to be able to offer this segment in the future. Machine tool industry will retain its high importance in the manufacturing process of the automotive industry in the future as well, if the transformation to eco-friendlier mobility is to succeed.
What is the current import-export market scenario of the German machine tool industry?
For 2018, the prospects are very good. Firstly, the global economy is growing vigorously, and secondly, international machine tool consumption is predicted to increase by 3.6 %. This is primarily attributable to Europe. America is likewise showing vigorous growth, whereas in Asia, by reason of the high growth achieved in 2017, the dynamic is exhibiting a slight weakening.
Speaking in the results of order income for 2017, there is an overall plus of 8 %: domestic orders climbed by 10 %, while orders from abroad ended with a 7 % plus. Importers will also profit from the climbing of domestic need of production technology.
How is the German machine tool industry planning to increase its footprint in the coming years?
Germany is optimally positioned on the global market. It ranks among the world’s leading suppliers of machine tools, a status confirmed yet again in 2017. In terms of production output, German manufacturers are estimated to take 2nd place among the most important producer nations, after China and in front of Japan.
In terms of exports, Germany remained comfortably the export world champion during 2017, in front of Japan and Italy. German machine tool industry is well advised to continue its efforts in building cutting-edge machines. The digital transformation and the worldwide development to eco-friendlier mobility offer a lot of possibilities which they should use and which they could use.