Product category:
Manufacturing industry news
News Release from: VDW
Edited by the Manufacturingtalk Editorial
Team on 16 January 2004
VDW forecasts 4% growth for German
machine tools
The German Machine Tool Builders' Association anticipates an increase of 4% in production to a level of EUR 9.2 billion during 2004, according to Carl Martin Welcker, its new chairman.
The prognosis for 2004 within the machine tool construction branch once more signalises growth The German Machine Tool Builders' Association (VDW) anticipates an increase of 4% in production to a level of EUR 9.2 billion, according to Carl Martin Welcker, the new chairman of the VDW, speaking on the occasion of the branch association's annual conference at Frankfurt/Main
This article was originally published on Manufacturingtalk on 12 Sep 2005 at 8.00am (UK)
Related stories
Machine tool show appears in a healthy climate
The German Machine Tool Builders' Association - VDW - on the 'eve' of the EMO 2005 exhibition - reports a coming market demand rise of 8% for the 2000+ exhibitors.
METAV focused on systems integration, optimisation
Manufacturing technology exhibition, METAV Dusseldorf 2006, focused on machining systems integration and automation, as well as optimising machine performance, reports Reinhard Guserle.
This optimistic estimate for 2004 is primarily based on developments in the business climate and in incoming orders.
Estimates with regard to the current situation and expectations for the months ahead both indicate positive developments in the important market regions North America and, above all, Asia.
But Welcker expressed regrets that "the mood in the most important market, Western Europe, is nevertheless still below its long-term average figure." Towards the end of the year, the climate also improved significantly in the major customer branches in Germany.
Further reading
Cost-effective assembly system installed
India based Avasarala Automation, has provided cost effective solution for a compressor assembly line for air-conditioner and refrigerator system.
Nickel and cobalt producers buy latest automation
An enhanced automation system has been purchased by the world's leading producer and refiner of cobalt and the world's fifth largest producer of nickel.
Abac acquires ALUP Kompressoren
As part of a strategic investment in the European industrial market, ABAC, the world's largest manufacturer of compressed air systems, has acquired ALUP Kompressoren GmbH.
Growing optimism on the part of customers is followed a good six months later by a corresponding income of orders for machine tool builders.
The VDW is reckoning with a drop in orders of 5% for the year 2003 as a whole.
The anticipated domestic figure will experience a drop of 15%, with foreign orders increasing by 5%.
On the whole, the turning point for incoming orders took place somewhere around the middle of last year, according to Welcker.
Orders from China boomed dramatically in the first nine months of the year.
As a result, the USA, which has for many years been the major market for German machine tools, was temporarily relegated to second place among the Top Ten customer nations.
For the first time since the former East Bloc markets were opened up, Russia once again ranked among the Top Ten.
The outlook there looks set to continue bright.
Back up from foreign business in 2003 - 2003 was a disappointing year for machine tool builders, both globally and in Germany itself.
Consequently, machine tool production will have to accept a drop of 8% to a figure 8.8 billion euros.
According to Welcker, it was once again foreign trade which succeeded in backing the branch up.
Taken as a whole, exports only fell by 3% to ca.
5.2 billion euros, whereas there was a loss of 14% in domestic sales, which amounted to a mere 3.6 billion euros.
The USA retained its position as the major market, despite a further drop of 8%.
China was able to clearly improve its position as the second most important market with a growth of 50% in the first nine months of 2003.
Machine tool consumption and imports both showed signs of decline, dropping by 14% and 13% respectively.
In the third quarter of the year, German machine tool builders employed a total staff of 63,700.
This figure lay 6% below the previous year's figure for the corresponding period.
The level of orders had risen slightly by October to a backlog figure of 6.4 months.
By the end of the third quarter, the capacity utilisation rate was 83% compared to 80% three months earlier.
German machine tool construction still world production champion - Germany stood its own ground well in the face of international competition.
Seen in euros, global production has dropped by 5% according to VDW estimates.
However, with its share of 21%, Germany continues to hold first place ahead of Japan and Italy.
However, the gap between Germany and its competitor Japan has shortened from 5 to 2 per cent.
China has now firmly established itself as undisputedly the largest sales outlet for machine tools.
Germany followed in second position at a distance of 9 per cent and a share of 12%.
German machine tools also came second in terms of exports behind Japan, which was able to achieve an increase of 5%.
Finally, in terms of imports, Germany held third position on a world ranking behind China and the USA, importing to a value of 1.4 billion euros.
Strong Euro cause for concern - the development in the Euro exchange rate was a major cause for concern among machine tool builders.
In contrast to the public debate on the issue, not only the rapid devaluation of the US Dollar, but also the weakness of the Japanese Yen were at the root of the problem.
Whereas the strong Euro particularly inhibits companies in their pricing policies, thus negatively affecting their income, sales of machine tools in the USA, for example, is far more dependent on demand and on economic perspectives.
According to Welcker, "Thanks to the large number of specific customised solutions, quality and technology often play a far more important role than does the price for those who buy German machine tools." A further important aspect is the competitive climate.
The strongest competition is often to be found in Germany itself, or in Japan.
Following on its low at the end of 2000, the Euro has regained strength significantly over against the Yen.
This means that Japanese competitors are able to sell their products far cheaper in Euro-Land as a result.
German suppliers are also losing ground against the Japanese on the American market, since the Euro has appreciated more in value against the Dollar than has the Yen.
More impetus required for domestic reforms - the German machine tool construction branch regards flagging reform efforts on the domestic front as a second risk factor inhibiting positive growth.
At the VDW press conference, Diether Klingelnberg, VDMA President and Chairman of the VDW Press and Publications Committee added that "The past year failed to bring about changes in domestic policy which can pave the way for lasting growth and employment." Despite many bold reform proposals, there had been a failure to remove the obstacles standing in the way of the most pressing structural reforms.
On the labour market, the political powers had omitted to ensure legal security for the corporate labour alliances.
They had failed to show enough confidence in changing the legislation protecting employers against unlawful dismissal, falling behind the 1998 legislation.
A tightening up of fiscal and taxation policy had led to investments in Germany being even less attractive than ever before.
There was a lack of confidence and credibility in the attempts at dismantling industrial subsidies and giving politics back some of the creative freedom they require for their financial policies.
At the same time, Germany, the companies and the employees are having to face up to the fiercest of global competition.
In order to survive that competition in the long term, far-reaching structural reforms of the labour market, taxation, social security systems and, above all, the education system still first require to be set in motion, according to Klingelnberg.
• VDW: contact details and other news
• Email this article to a colleague
• Register for the free Manufacturingtalk email newsletter
• Manufacturingtalk Home Page
Search the Pro-Talk network of sites
