“We expect a significant increase in production of 3% for the current year”, said Dr Heinz-Jürgen Prokop recently in Frankfurt, Germany. This assessment is based on the international industrial production and the global machine tool demand, which are expected to develop well, according to Oxford Economics, VDW’s forecast partner. The forecast is also supported by the high order backlog from 2016. By November, the German manufacturers’ orders rose by 7%, driven by foreign countries. Internal orders remained at the previous year’s level. Overall, the German machine tool industry is particularly benefiting from the large-volume automotive project business worldwide.
The VDW forecast is based on the record year 2016. The German machine tools industry produced machines worth EUR 15.2 bn, an increase of approximately 1%. “With this, our industry achieved a production record”, explains Prokop.
With an export rate of 66%, exports fell by 3% to approximately EUR 9.1bn. This can be explained by pronounced demand damping in China. However, China remains the most important sales market for German machine tools. Nearly one-fifth went there in 2016.
In 2016, an average of 69,000 women and men were employed in the German machine tool industry. Capacity utilization in Germany was on an annual average of 88%. At 6.9 months, the order backlog was slightly higher than in 2015.
German machine tool manufacturers continue to be on top in the international competition. In 2016, it was successful to become a world champion of exporting countries ahead of Japan, VDW says. The manufacturers achieved an export result of EUR 7.6 bn without parts and accessories. The previous year’s winner Japan suffered heavy losses of more than one-fifth to EUR 6.3 bn. The reason is the weakness of the Asian sales market.
In production, Germany is one of the world’s leading companies as well. According to preliminary figures, Japan is only just ahead with EUR 11.4 bn before Germany with EUR 11.25 bn. The undisputed leader in production is and remains China with EUR 16.5 bn.
“2017 is characterized by many challenges that offer opportunities to generate new competitive advantages and expand our portfolio,” Prokop explains. This applies particularly to the area of digitally networked production and the solutions for Industry 4.0. Substantial potential lies in the consistent automation of the entire order process and in the elimination of process faults. High efficiency-increase in the double-digit percentage range is easily conceivable with networked solutions and it helps customers to be ahead of the competition, VDW says. Prerequisite is the acquisition and analysis of machine and process data. “In order to make this possible, we need flexible IT infrastructures from the machine to the cloud, that are affordable even for smaller manufacturing companies,” emphasizes Prokop. According to him, there are still hurdles to overcome. These are, among others, unresolved or non-harmonized topics of networking in production, such as standardization of interfaces, data security, data integrity, liability questions, qualification of employees, labor law and the like.
According to VDW, another major factor in the future of the industry is electromobility. How the machine tool industry will be affected is, in the final analysis, still open, since not even the most urgent questions about the amount of pure electric vehicles or the change in the metal cutting rate have been clarified. The fact is that there will be a higher proportion of hybrid vehicles for a longer transitional period. Due to the combination of combustion engines and electric motors, the degree of complexity is expected to still require high chip volumes, according to German manufacturers. However, one thing remains undisputed for VDW: All companies that deliver to the automotive industry must complicitly deal with these issues. “The VDW supports its members and is currently analyzing what developments can be expected in which time periods, in order to provide the basis for a strategic business plan,” explains Prokop.
In summary, VDW chairman Heinz-Jürgen Prokop notes that the German machine tool industry is well equipped for the future. It is intensively working to make the world-wide competition weather-proof. The overwhelming majority of German machine tool builders will face the challenges ahead, be represented worldwide with service, sales and production, and will continue to expand their foreign structures. The global tooling needs are increasing, and the German manufacturers are at the forefront, says Prokop. Companies integrate new technologies into their products and develop new solutions. “I am sure that we will continue to play in the front line in the first league,” concludes the VDW chairman.
Many ideas and innovations for the production of tomorrow will be shown at EMO Hannover 2017. After a four-year break, the trade fair for metalworking will be held from September 18–23, 2017 in Hanover, Germany, under the motto ‘Connecting systems for intelligent production’. EMO 2017 has already set a record: 1,858 companies from more than 40 countries on almost 158,000 sq m of exhibition space have registered for the event so far.