International development The world market for machine tools once again developed positively in 2010 - based on a weak comparison basis. The German Machine Tool Builders Association (VDW) calculated growth in global consumption of 25% or € 8.9 billion to € 45.0 billion (previous year: € 36.1 billion). The industry thus finds itself once again above the level of the year 2005. Development of global consumption in a 10-year comparison is presented in the "Forecast report" chapter on page 113.
The global machine tool market is marked by an enormous structural shift towards Asia, more especially towards China. Asia's share in global consumption amounted to just under 62%. America and Europe have clearly lost global market share in the last ten years. Asia is leading the global recovery process; demand has continued to show dynamic growth (+25%). Once again, by a clear margin, most machine tools worldwide were purchased in China at € 15.9 billion and a share in world consumption of 35%. China is once again the largest sales market worldwide (previous year: 30%). In America consumption has risen (+18%). In Europe the trend was still slightly downwards (-3%). Germany lies in second place at € 3.7 billion (change to the previous year: -11%) and a global consumption share of 8%. It is followed by South Korea (consumption: € 3.2 billion; change to the previous year: +67%; global consumption share: 7%) and Japan (€ 2.9 billion; +24%; 6%). Places five to ten were taken by the USA (€ 2.3 billion; -3%; 5%), Italy (€ 2.2 billion; +7%; 5%), Brazil (€ 1.3 billion; +25%; 3%), India (€ 1.2 billion; +33%; 3%), Taiwan (€ 1.2 billion; +82%; 3%) and Russia (€ 0.9 billion; -2%; 2%). The ten most important consumer markets represent 77% of the total global consumption of machine tools (previous year: 76%).
In the major sales markets, market shares developed as follows:
Also with respect to the import of machine tools China took first place for the ninth year in a row at € 6.8 billion (+62%; previous year: € 4.2 billion). The USA imported more machine tools at € 1.8 billion (previous year: € 1.6 billion). These two largest import nations consumed 40% of all machine tools in total (previous year: 36%). China’s import share grew by 4 percentage points to 43% (previous year: 39%). Whereas the USA covered 79% of its consumption last year with imports (previous year: 70%). The German import share amounted to 39% (previous year: 39%), followed by India with 97% (previous year: 92%) and South Korea with 34% (previous year: 42%).
The German Machine Tool Builders Association (VDW) likewise calculated a rise in global production of 25% or € 8.9 billion to € 45.0 billion (previous year: € 36.1 billion). For the first time China is the world’s biggest producer of machine tools at € 9.9 billion; this corresponds to 22% of machines tools produced globally (change to the previous year: +37%). Japan followed with output of € 8.5 billion (+68%) or 19% of global output. At € 7.4 billion (–5%) Germany is only the third largest producer; this corresponds to 16% of production worldwide. Places four to ten were taken by Italy (€ 3.9 billion; +3%; 9%), South Korea (€ 3.4 billion; +72%; 8%), Taiwan (€ 2.9 billion; +77%; 6%), Switzerland (€ 1.7 billion; +6%; 4%), the USA (€ 1.5 billion; –4%; 3%), Austria (€ 0.7 billion; +6%; 2%) and Brazil (€ 0.6 billion; +30%; 1%). The ten major production countries represent 90% in total of all machine tools (previous year: 89%).
In the major markets, the production share developed as follows:
Sources: The basis of the world machine tool statistics is the data published by the VDW (the German Machine Tool Builders’ Association) (excluding parts and accessories). This data is requested by the national producers’ associations of each individual country and is based on the current actual values or, for the remainder of the year, on careful estimates based on the updated values of the previous year.
In the reporting period, 55% of the global production of machine tools was exported (previous year: 55%). With an export share of 70%, Japan took first place for exports (previous year: 60%). Germany followed with 69% (previous year: 67%). These two countries accounted for 44% of world exports in terms of value (previous year: 41%); followed by Italy (10%) and Taiwan (9%), as well as Switzerland (6%), South Korea (5%), the USA (4%), China (4%), Austria and Belgium each with a share in global exports of 2%.
The German machine tool industry also managed to achieve a trend reversal in 2010; overall it recorded strong growth again in order intake and a rise in exports. However, production once again declined; due to high lead times in the project business and a high proportion of special machines at most German manufacturers. Order intake rose to € 11.5 billion or 85% (previous year: € 6.2 billion). Domestic demand rose by 75% (previous year: –61%). International demand rose by 90% (previous year: –50%).
The ifo business climate index for trade and industry reflected the optimistic mood. The main consumer industries (mechanical engineering, automotive manufacturing and electrical engineering) reported considerably higher assessments than in the previous year. Order intake at the German machine tool industry developed over the course of the year as follows:
Production fell by 3% to € 9.9 billion and was thus once again below the previous year's level (€ 10.2 billion). Exports recorded the export of machines to a value of € 6.0 billion and thus lay 1% below the previous year's value; this represents an export share of 61% (previous year: 59%). The most important export market for German machine tools was again China at € 1.5 billion, which corresponds to 25% of German exports (previous year: 22%). This means that the Chinese market for German machine tools is now nearly four times bigger than that of the USA (second place). In the USA machines valued at € 394.3 million were delivered (previous year: € 421.1 million). Russia was once again the third most important export market; machines valued at € 293.9 million were delivered (previous year: € 367.5 million; export share: 5%). In comparison with the previous year, clear growth occurred in exports to the following markets: Taiwan (+71%), Belarus (+58%), South Korea (+25%), Turkey (+25%), Brazil (+21%) and India (+18%).
The development and composition of German machine tool production is shown in the following multiple year comparison table:
Domestic consumption reached € 5.3 billion and thus fell by € 3.5 billion or 40% compared to the previous year (€ 8.8 billion). With an import share of 27% nearly every third machine tool came from Switzerland. This was followed by Italy, Japan, the Czech Republic and Spain. In the top 10 group of import countries, imports from Japan fell most heavily at 58%, followed by Switzerland (–50%) and the USA (–48%). Machine tool imports decreased by € 1.6 billion or 43% to € 2.1 billion (previous year: € 3.7 billion). German machine tools to a value of € 3.9 billion were sold domestically.
In the course of the reporting year, the German machine tool plants recorded a declining capacity utilisation. Due to the poor order intake situation the capacity utilisation of producers of cutting machine tools fell from 92% at the start of the year (previous year: 98%) to 71% (previous year: 98%) against the end of the year.
The extent of the order backlog fell continuously during the year and was still an average of 6.2 months (previous year: 8.7 months) because of the high share of special machines and project business. The extent of order backlog is based on calculations and represents an average value for the industry. It can only be viewed as a rough indication of the actual order backlog.
The number of employees in German machine tool companies averaged 69,614 (previous year: 70,839).
Reliable statements on the profitability of the German machine tool industry are not readily available as only individual companies publish the corresponding figures. Therefore the association has to rely on estimates. However, it has to be stated that the earnings situation of the industry has worsened considerably due to the worldwide economic crisis and many producers suffer losses.
Sources: VDW; VDMA – Trade Association for Machine Tools and Production Systems
(Figures include parts and accessories and exclude service and installation; previous year’s figures partly revised)