The global machine tools market size to reach USD 122 billion by 2026, growing at a CAGR of 8.5% during the forecast period. Growth in the automotive sector, rise in infrastructure development, and high emphasis on automation in the industrial sector are boosting the global machine tools market growth.
GLOBAL MACHINE TOOLS MARKET: KEY HIGHLIGHTS
- Metal cutting tools by production value are likely to reach a revenue of approx. USD 90 billion by 2026 on account of high demand from aerospace, defense, automotive, and shipbuilding end-users.
- By consumption value, metal forming tools are estimated to touch revenue of over $33 billion by 2026, growing at a CAGR of around 8%.
- CNC technology is projected to reach close to $78 billion by 2026 due to the rise in Industry 4.0 concepts and smart factory development.
- Automotive end-users are projected to observe an incremental growth of over $13.50 billion by 2026 because of the growing automotive sector in China, Japan, the US, and Western European countries.
- In terms of production and consumption values, the APAC machine tools market is expected to reach over $64 billion and over $56 billion, respectively, by 2026.
Vendors catering to this industry will witness a sudden rise in demand. The global machine tools market has been immensely affected by the outbreak of the COVID-19 pandemic. Activities in the manufacturing production line have witnessed the sharpest contraction since the last decade. In 2020, machine tools production and consumption went for a toss, with industrial production decreasing by 5% worldwide. Europe was one of the most adversely affected regions. The production and supply orders reduced drastically in Q2 2020 across the world. However, the market is likely to rebound during 2021 due to the restoration of economic activities and industrial processes. The machine tools industry has witnessed massive investment owing to the growth in industrialization. However, the investment witnessed a slow down due to the outbreak of the pandemic. In 2021, rebalancing machine tools consumption is expected. The consumer spending and demand toward the discretionary spending on manufactured goods and services per capita income is likely to grow during the forecast period.
GLOBAL MACHINE TOOLS MARKET SEGMENTATION
Metal cutting tools have a higher machine tools market share with over two-thirds of the sales contribution. The sales of these devices are high in critical industries, including aerospace, defense, automotive, and shipbuilding. They are also observing an application in non-electrical sectors, which have crucial components incorporated using high precision machine tools.
The introduction of micro-machining technology in machine-centered devices is a key trend, which is likely to increase the demand. China and Japan are the leading lathe machine market. These product types are observing preference in the automotive sector. Increased support from government agencies, especially in India, to the manufacturing sector, is also likely to fuel the demand for lathe machines. Germany is another important country in Europe, which has been boosting the demand for lathe machines. However, rapid digitalization and increased automation of the automotive industry are expected to hamper the lathe machine tool market growth, with vendors shifting their focus on advanced computerized control tools. Lasers and electrical discharge machines (EDM) are also likely to observe a significant increase during the forecast period.
The metal forming industry holds over 26% of the machine tools market share. Railways, defense, and industrial machinery are the major end-users of metal forming; however, automobile manufacturers are the largest end-users of metal forming. The increase in demand for lightweight and commercial vehicles in the APAC region is one of the major market trends increasing metal forming machines application. Bending and forming, pressing, and punching and shearing machines are likely to grow due to the increased demand for fabricated metal, industrial, and precision part development.
Owing to the rise in automation, shift toward digitalization, and the advent of industry 4.0, the demand for automated machine tools has witnessed significant growth in the last few years. Computer numerical control (CNC) machines hold over 60% of the market share and are expected to witness substantial growth during the forecast period.
The usage of CNC machines is expected to increase due to the high focus on product innovations. The automotive and durable consumer sectors are majorly responsible for fueling the growth of CNC machines. Increased investments are made in R&D activities to further enhance CNC types, specifically in developing countries such as India. Moreover, since metal cutting machines hold a prominent share in the CNC segment, the demand is expected to boost further.
The high penetration and pervasiveness of non-CNC machines are one of the major factors boosting the market growth. Automotive, aerospace and defense, railways, capital goods, and durable consumer sectors have a high demand for non-CNC. However, the high demand for the integration of technologies such as AI, IoT, robotics, etc., is expected to hinder the growth of non-CNC machines during the forecast period.
The machine tools market demand is expected to increase due to expansion and increased investments by private and public players in automotive, industrial equipment, metal industries in Europe, APAC, and North America. Thus, the demand for machine tools in various industrial applications is anticipated to grow. However, the current uncertainty over the macro-outlook of the global economy and the decreased demand for machine tool products due to the recent COVID-19 outbreak has affected the market, thereby developing a short-term market growth challenge. The automotive industry is the largest end-user segment for machine tools. However, with the outbreak of the COVID-19 pandemic, vehicle production witnessed a drastic slowdown due to imposed lockdown. With the decline in production, the use of machine tools has also decreased. However, since the lockdown has been lifted partially in several countries and production activities have resumed, the demand for machine tools is expected to accelerate.
Construction, power generation, transportation, mining, agriculture are the major end-users of industrial machinery. North America and Europe are the most prominent geographic for the industrial machinery market. China is a leader in industrial machinery and is expected to dominate the market in the long run. However, India and Vietnam are currently likely to witness relatively slow growth due to the economic impact of the COVID-19 outbreak.
- Metal Cutting
- Machining Center
- Grinding Polishing
- Laser, EDMs, and Other Tools
- Metal Forming
- Bending & Forming
- Punching & Shearing
- Metal Cutting
- Metal Forming
- Metal Cutting
- Metal Forming
- Industrial Machinery
- Metal industry
- Electrical & Electronics
- Medical Industry
- Heavy Equipment
- Aerospace & Defense
- Marine & Offshoring
INSIGHTS BY GEOGRAPHY
The APAC machine tools market size is expected to reach USD 65 billion by 2026, growing at a promising CAGR of over 9%. The resumption of economic and infrastructural activities post-COVID-19 has a crucial factor contributing to market growth. China and India are the leading markets for machine tools to restore economic development activities in Q3 2020. Taiwan, Malaysia, and South Korea are likely to emerge as the potential industry for machine tools manufacturers. Taiwan has witnessed decent economic growth despite the trade tension between China and the US. The country has tackled the COVID-19 virus and maintained the supply of manufacturing units with minimum disruptions. In 2021, the market is likely to revive and record a GDP of close to 3.5%. The investment in Malaysia is expected to increase in 2021. The region's market is likely to grow and offer numerous opportunities for vendors catering in the region. Also, vendors can emphasize strategic partnerships to boost market position.
Trade wars and the imposition of tariffs are the significant concerns confronted by key players operating in the market. The recent trade war between the US and China affected the machine tools market immensely. Vendors could expect intense competition across regions. With upswings and downswings in the global economy, vendors could consider cost-cutting measures or create a sense of nostalgia for significantly pushing their products across challenging markets. The COVID-19 pandemic has also adversely hit the market potential. The market is slowly becoming concentrated, with Doosan and Amada occupying significant shares of the market. Although North America, APAC, and Europe are the key markets for vendors, Latin America and MEA are also expected to witness considerable growth in the coming years.