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The global machine tools market size was valued at USD 111.36 billion in 2020 and is projected to grow from USD 113.26 billion in 2021 to USD 164.92 billion in 2028, growing at a CAGR of 5.5% during the forecast period.The global impact of COVID-19 has been unprecedented and staggering, with these tools witnessing a negative demand shock across all regions amid the pandemic. Based on our analysis, the global market exhibited a huge decline of 1.3% in 2020 as compared to the average year-on-year growth during 2017-2019. The sudden rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.
The production of machine tools has been influenced by their demand across the automotive, industrial, and transportation machinery. Moreover, suppliers are focusing on the digital transformation of the machinery, owing to the shift of the era from conventional to CNC machines. This transformation is the result of the demand for high productivity, high quality, and reduced cycle time across the end-user industry. For example, in August 2020, TGM Ltd. invested USD 1.43 million in launching CNC technologies in order to target the major aerospace and defense firms. With the implementation of these new technologies, the company is expecting to double its sales in just two years. Likewise, over the period of time, the growth of CNC machines is expected to surge significantly across end-use industries.
COVID-19 Pandemic: Disruption Due to Slowdown in Production Process May Hinder Growth
The emergence of the COVID 19 pandemic has resulted in an economical dent across all the industrial sectors worldwide in 2020. Furthermore, machine tool manufacturers are facing challenges of this contraction, which ultimately resulted in the slowdown of production and sales in 2020. Besides, the sudden lockdown has given rise to the total shutdown of manufacturing plants, supply chain disruptions, availability of laborers, and raw materials.
Despite the occurrence of the global strain due to the novel coronavirus, suppliers are focusing on resuming their production activities by adhering to the government norms in order to complete their pre-existing orders and provide assistance to end-users. Apparently, with the implementation of the government measures for workers’ safety, Mazak Corporation is serving its customers its existing orders and is actively providing support to the healthcare and power generation industries. Also, for instance, in March 2020, in order to overcome the demand for ventilators, Vixen CNC, a manufacturer of ventilator components, promptly purchased a Mazak Integrex i200 ST multi-tasking machine. Therefore, the market is expected to stabilize during the forecast period.
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Increasing Demand for Smart Machine Tools is a Prominent Trend
Technological advancements such as the increasing adoption of robotics, human-machine interaction are observed to influence the market growth in the current period. The real-time connectivity requirement is further giving rise to the trend of smart factories enabled with the cloud. Thus, the tool is becoming a vital part of smart systems and is expected to result in the product’s popularity. These smart tools come with sensors to optimize machine time and schedule maintenance. This data can be analyzed and aid in improving productivity. In addition to this, the sensors can improve predictive analysis about these tool parts and their lifecycle. This is expected to reduce the downtime and help address the idle time issues significantly. Moreover, the surging adoption of smart functions, such as reduced power usage is further expected to contribute to the growth of the market in terms of revenue.
Growing Adoption of Additive Manufacturing & Hybrid Machine Tools to Surge Demand
A rise in additive manufacturing is driving the market. Manufacturers are shifting towards cost-effective and rapid production processes, which, in turn, are resulting in the increased adoption of additive manufacturing. Furthermore, the rising popularity of heterogeneous material manufacturing capability is further expected to result in the growth of the market. CNC manufacturers are planning to bring additive manufacturing into their businesses. For example, Okuma is planning to introduce its new Laser EX machines in the future, which would include laser hardening for carbon steel material, along with heating by laser emission and hardening by self-cooling. Thus, such innovative combinations of technologies are further expected to favor market growth in the future.
Uncertainty Related to Social and Economic Factors is Hindering the Market Growth
Changes in the global economic conditions are resulting in the hindrance of the market. Expenditures in the manufacturing industry are directly proportional to these tools sales. Hence, if the global economy slows, it is expected to directly result in the decline of machine tool revenue. Likewise, trends in the automotive industry have had a larger impact on the tools sector owing to the high adoption of machinery in the industry. However, the trends related to capital expenditure in the automotive manufacturing sector have a significant impact on the market revenue. Furthermore, unexpected changes in the economic, political, or social circumstances and regulations of a country can impact the growth of the market revenue.
Digital Transformation across Machine Tools is Harnessing the Demand for CNC Tools
Based on the technology, the market is segmented into computerized numerical control (CNC) and conventional.
The CNC tools segment is expected to drive the market in the near future owing to the increasing demand for process automation across industries. The rising automation of production processes owing to the increasing demand for improved precision and short lead time is further expected to result in the growth of the market. Key players are thus, focusing on the development of CNC systems to cater to the various industrial requirements.
The conventional tools segment is expected to exhibit steady growth in the near future, owing to the shift of the end-users from traditional machines to CNC machines. However, the lack of skilled labor is limiting the growth of this segment.
Metal Cutting Tools Segment to Dominate Backed by High Demand from Construction and Automotive Sectors
Based on the product type, the market is segmented into metal cutting and metal forming.
The metal cutting tools segment is expected to remain dominant owing to the increasing demand from various industries, such as automobile and construction sectors during the forecast period. Increasing advancements in management and production systems have positively contributed to the growth of the automotive industry. Besides, the rising demand for commercial spaces and residential housing has resulted in the growth of the construction industry. Also, the increasing demand from the aerospace sector owing to the cost advantages is further expected to enhance the machine tool industry.
Metal forming machines are used across processes, such as forming, bending, shaping, pressing, and shearing. The adoption of press brake machinery is expected to drive the metal forming tools segment. This is attributed to the extensive use of press brake metal forming machines as a sheet bending tool in various manufacturing industries, such as aerospace, automotive, shipbuilding, petroleum machinery, and agriculture.
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Precision Engineering Application is Expected to be the Fastest-growing Segment
Based on the application the market is divided into automotive, general machinery, precision engineering, transport machinery, and others.
The automotive segment holds the major machine tools market share owing to the application of different tools in the automotive manufacturing sector. For instance, through milling, different automotive parts are manufactured, including engine locks, piston rods, wheels, and gearbox cases.
The precision engineering segment is expected to exhibit the highest growth rate as a result of the increasing demand for high accuracy in complex product manufacturing. The surging demand from the semiconductors, medical technology, and marine industries is resulting in the growth of precision engineering. Furthermore, the increasing opportunity in advanced materials, sensors, and laser & optics is contributing to the growth of the precision engineering industry.
The increasing demand for general machinery and transport machinery is expected to result in the growth of the key market, as a result of its demand for customization across the different industrial sectors.
Asia Pacific Machine Tools Market Size, 2020 (USD Billion)
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Asia Pacific holds the major share of the market. The surging demand for these tools from various industries, such as automotive, manufacturing, construction, and aerospace is resulting in regional growth. The evolving government initiatives are boosting the market revenue. For instance, the ‘Make in India’ campaign encourages foreign direct investments (FDI) and tax benefits for the manufacturing sector in India. Besides, the Automotive Mission Plan 2016-26 and the National Electric Mobility Mission Plan that promotes the adoption of electric vehicles are further expected to drive the market in the forthcoming years.
China to Witness Highest CAGR Owing to its Competitive Advantage
China is projected to exhibit the highest growth owing to the competitive edge over other regions. The demand in China is projected to increase, stimulated by healthy growth in the manufacturing sector, specifically in transportation equipment industries, precision engineering, and industrial machinery. Also, a continuing shift towards higher-value products, such as CNC machines, machining centers, & multitasking machines is expected to aid the market.
North America is expected to experience considerable growth owing to the increasing demand from the manufacturing industry. Also, the U.S. is one of the leaders in terms of R&D activities for technology development and creating efficient engineering processes. This is owing to the presence of many international players in the region.
Latin America is expected to witness steady growth owing to the difficult scenario in Brazil. According to the National Statistics Agency of Brazil, the production of this country fell by 0.2% from April 2019 after a 0.3% increase in the previous month.
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Europe is further expected to contribute to the growth of the market owing to the increasing consumption in countries, such as Spain, Italy, and Germany, respectively. Machinery & Equipment is the second largest sector in Germany and it stood at USD 251.33 billion in 2018. In addition, Europe has a strong presence of leading automobile manufacturers, such as Mercedes, Audi, Volkswagen, Porsche, Ferrari, Bentley, BMW, Opel, Fiat, Aston Martin, and Jaguar. Thus, the automobile sector is further expected to contribute to the growth of the market.
The Middle East & Africa is also anticipated to grow steadily over the forecast period. The growth in the region would be influenced by the demand for precision engineering across the industrial sector.
Market Leaders are Focusing on R&D Development for Better Equipment Performance
Companies are focusing on the Fourth Industrial Revolution and thus, are continuously upgrading their products through innovations. These companies are aggressively investing in R&D, infrastructure sector, and manufacturing industries to capture the maximum share in the global market. Moreover, key players are focusing on enhancing product efficiency through mergers & acquisitions and expansion of production management systems. Prominent players are also associating with regional firms to possess technical capabilities for catering to the global machine tools demand in manufacturing operations. For instance, Hyundai WIA has machine tool laboratories in Uiwang, Changwon, and Europe, where it is focusing on high speed, high precision, and extensive research on technology.
An Infographic Representation of Machine Tools Market
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The global machine tools market research report provides a detailed analysis of the market. It focuses on key aspects, such as competitive landscape, leading companies, product types, and leading product applications. Besides, it offers insights into the current market trends and highlights key industry developments resulting from primary and secondary research studies. In addition to the factors mentioned above, the report encompasses the analysis of several key factors that have contributed to the growth of the market over recent years.
Value (USD Billion)
Technology, Product, Application, Region
Fortune Business Insights says that the global market size was USD 111.36 billion in 2020 and is projected to reach USD 164.92 billion by 2028.
Registering a CAGR of 5.5%, the market will exhibit steady growth during the forecast period (2021-2028).
In 2020, the Asia Pacific market value stood at USD 58.83 billion.
Based on technology, the CNC machines segment is expected to lead this market during the forecast period.
Additive manufacturing along with the introduction of innovative hybrid tools is the key factor driving the growth of the market.
Amada Machine Tools Co, Ltd., FANUC Corporation, JTEKT Corporation (Toyoda), Okuma Corporation, Makino, and Doosan Machine Tools Co. Ltd. are the major players in the global market.
Asia Pacific dominated the market in terms of share in 2020.
Uncertainty related to social and economic factors is expected to hinder the market growth.
By applications, the precision engineering segment is expected to drive the adoption.
The adoption of smart tools is the current market trend.
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