Words like “decline”, “downturn” and “recession” have been used to describe the machine tool industry in 2013. It is time for the industry to speed up restructuring and transformation. This article analyzes the data of 2013 and urges the machine tool industry to focus on medium-end market and promote innovation, so as to increase sales in 2014.

In 2013, global economy remains in a stage of slow recovery and major economies exhibit a growth trend. Recovery in the U.S. manufacturing sector pulls up continuous economic growth; European economy is slowly stepping out of the impact from debt crisis; Buoyed by Shinzo Abe’s new deal, Japan witnessed dramatic growth in export in the latter half of the year; on the other hand, after continuous “outstanding performance” in the past years, emerging economies are faced with a full range of challenges from delay in restructuring, inflation to fluctuation in the monetary market and experiencing slowdown in growth.

In the general environment of slowdown in economic growth and restructuring, China’s machine tool industry has experienced transformation and upgrading and stays in a status of low-level operation. The controversy between industrial and product structure and market demand remains unsolved, and the challenge of surplus low-end production capacity and inadequate high-end production capacity remains unsettled; after constant growth in the past years, import is also exhibiting a declining trend, further verifying overall shrinkage in market scale.

Industrial data in 2013

In 2013, China’s machine tool industry continued the trend of overall decline beginning two years ago and great changes took place to market demand structure.

Higher CNC rate but the gap remains substantial

From January to November 2013, total output of metal-cutting machine tools in China hit 660,000 sets, declining by 7.84% on YOY basis; specifically, CNC metal-cutting machine tools account for 28% or 184,000 sets in total output, growing by 0.4% on YOY basis. From January to November, total output of metal-forming machine tools in China hit 210,000 sets, declining by 1.38%; total output of CNC metal-forming machine tools hit 14,549 sets, growing 10.35% on YOY basis.

From January to November 2013, CNC rate for machine tools went up slightly; specifically, CNC rate for metal-cutting machine tools hit 27.9%, up 2.1% while that for metal-forming machine tools hit 6.9%, up 1.1% on YOY basis. Compared with developed countries such as Japan, USA and Germany hitting 60%~70% and 80%~90% in CNC rate in terms of output and output value respectively, however, the CNC rate of machine tools in China still lags substantially behind.

In output of metal-cutting machine tools, Shandong, Zhejiang, Liaoning and Jiangsu ranked among the top of the list. In output of CNC metal-cutting machine tools, Zhejiang and Liaoning ranked first and second while Shandong and Jiangsu ranked next. For metal-forming machine tools, Jiangsu and Anhui ranked first and second while Zhejiang and Shandong ranked third and fourth; in output of CNC metal-forming machine tools, Jiangsu, Shandong and Zhejiang ranked among the top of the list.

Lower volume but higher price in import

From January to December 2013, based on statistic data from China Customs, China imported 75,637 sets of metalworking machine tools and hit USD 10.1 billion in import value, declining by 31.2% and 26.0% on YOY basis respectively; unit price for import increased by 7.6% to USD 134,000/set.

Metalworking machine tool import began in late 2012 to shrink in volume but go up in unit price. This trend remains unchanged in 2013. In the first three quarters, import volume shrank but unit price increased 5.7%. In August, import volume began to shrink (for four months continuously). Unit price for import began to go down in October, set new high in November and fell dramatically in December.

In import value, Germany, Japan and Taiwan ranked as the top three import sources for China’s metalworking machine tool import. From January to November 2013, China’s import from Germany hit USD 2.646 billion, up 1.4% on YOY basis; China’s import from Japan hit USD 2.528 billion, declining by 51.1% on YOY basis; China’s import from Taiwan hit USD 1.016 billion, declining by 24.8% on YOY basis.

Higher volume but lower price in export

From January to November 2013, China’s metalworking machine tool export increased by 1.3% in export value and 9.9% in export volume on YOY basis to USD 2.550 billion and 7,614,600 sets; average unit price for export dropped by 7.8% on YOY basis to USD 334.82/set.