Machine Tools Market – Industry Dynamics, Market Size, and Opportunity Forecast to 2027

Report Synopsis 

The machine tools market is forecast to see a revival in demand and reach a market size of US$ 95,169.1 Mn by 2027, registering a CAGR of 4.7% over the period 2021-2027. As we see few of the largest shareholding countries now recovering from Covid-19, the market for machine tools is expected to see moderate growth, reaching a growth rate of almost 3% in 2021. It is estimated to take another 1 to 2 years for the market to trace back its pre-covid growth curve. As Covid-19 swelled into a pandemic in early 2020, the market for machine tools, valued at approximately US$ 69,855 Mn in 2020, recorded shrinkage by 5% from 2019, deviating from pre-covid growth forecasts by significant margins.

The report provides an in-depth analysis of the market with a period spanning 10 years, 2017 - 2027, covering both the pre-covid and post-covid growth trends. With 2020 being considered as the base year, the report partitions the forecast period of 2021-2027 in three terms, for a closer review of the growth scenario amidst all possible developments globally. 2021-2024, considered as short-term or near-term records maximum uncertainty between different scenarios as analyzed in the report – optimistic, most likely, pessimistic outlook. In all, the report on the machine tools market presents an analysis covering 260 pages with more than 150 tables and figures.

The machine tools market globally is driven by demand from the Asia Pacific region, accounting for more than 50% revenue share throughout the forecast period. Sectors such as Automotive and Industrial in the region, which alone accounted for close to one-third of global volume sales of machine tools are seen as key sectors supporting demand in the Asia Pacific and worldwide as well. With these industries embracing digital solutions and quickly moving to advanced automation tools, the Asia Pacific CNC machine tools market is alone expected to account for close to 60% of the global share of CNC machine tools opportunity being added during the term 2021-2027.

Report Scope 

Globally, the machine tools market is characterized by sharply varying trends, with CAGRs of various market segments differing by a margin up to 300%. For instance, in terms of product type, Machining centers are expected to see a CAGR of 2.8% in terms of revenue while Milling machines are analyzed to see growth at a CAGR of 7.4% during the same term. Other products analyzed include – lathe machines, laser machines, drilling machines, turning machines, grinding machines, and electrical discharge machines (EDMs). In terms of automation, the CNC machines market is analyzed to grow at a CAGR of more than 5% while the conventional machine tools segment is forecast to record a CAGR of less than 4% in the same term. This difference is 

The other parameters basis which the market is analyzed in the report include – industry and distribution channel. By industry, the automotive segment is seen as the dominant market followed by aerospace and defense in terms of CAGRs. In volume terms, tools sales are largely contributed by automotive followed by industrial segment, with both collectively accounting for 48% of all equipment sales. A large share of all equipment sales is still contributed by dealers and distributors, with the events and exhibitions segment forecast to grow at CAGR below global CAGR of 4.7%.

Geographically, Asia Pacific is the largest market for machine tools also holding its position as the fastest-growing market, with CAGR valued at 5.2% for the period 2021-2027. China, which alone accounted for more than 20% of the global market for machine tools, is analyzed to retain an attractive growth trend, retaining its dominant position in the Asia Pacific region. However, with the government in India pushing for improving infrastructure investment and incentivizing EV adoption, the country is expected to see an attractive growth rate for machine tools, the highest among peer countries in the region. Together with China, the two countries are analyzed to account for more than 67% of the regional opportunity created for machine tools. The opportunity equals 40% of the global machine tools market growth during 2020 – 2027. Apart from China and India, the ASEAN region collectively has emerged as an attractive market, with the region accounting for more than 11% of market revenue share in 2019 and forecast to grow at a CAGR of 5.5%.

Report Glimpse 

The machine tools market globally is driven by favorable government policies and attractive investment markets in the industrial and automotive sectors worldwide. Key trends such as EV adoption, factory automation, and boost in smart cities projects and construction sector as such, are seen as favorable factors aiding the market growth. The automotive sector, which supports a wide array of parallel sectors such as parts and accessories, electronics, rubber and tire, aftermarket service among others, has been critical towards supporting demand for machine tools. This in turn drives demand for CNC machines and even for a few of the conventional machine tools such as lathe and milling machines. The milling machines market segment alone in 2019, in terms of volume, exceeded 1.2 Mn units and is forecast to grow at a CAGR of 3.7%, closely followed by lathe machines and laser machines. The three product segments accounted for close to 60% of global volume sales in 2020, growing at a collective CAGR of 3.9% during the period 2020-2027. The market, however, despite growth opportunities faces challenges when it comes to the spending power of buyers. Considering high capital requirements (especially for CNC machines), end-users with not-so-deep financial pockets find it challenging to invest in something with a long RoI period and instead opt for conventional tools. This subsequently restricts the adoption of advanced tools, limiting to few sectors such as automotive and industrial, a challenge for tool manufacturers to find alternate financing options or business models. For the same reason competition in the conventional tools, the segment is intense and local players find it relatively smoother to push their products for budget-conscious customers. The report also includes an overview of the cost structure of the industry, wherein raw material cost and labor cost hold higher share, and price shift of raw materials such as steel become crucial to ensure margins are maintained. As a result, production cost almost equals two-third of the business cost, leaving tight pockets for new product development. This subsequently impacts the long-term industry growth scenarios.

Competition Landscape 

The machine tools market has traditionally been a competitive market with large and global players competing with regional players having a wider local market footprint. However, with industries now transitioning to digital tools and embracing robotics, an enhancement to product mix and robust service support has become crucial for firming one’s position in the market. This however requires a strategic R&D plan and significant investment margins, a challenge for midscale manufacturers, while operating in an industry with thin margins. Consolidation and unique business models are seen as prominent strategies being explored by players to ensure long-term sustenance and leadership in the market. The players are seen shifting from having a strong horizontal product line to extending their existing product lines, focusing their efforts on specific categories largely based on their customer bases. 

Players analyzed in the report and holding a dominant position in the market include names such as – DMG MORI, Yamazaki Mazak Corporation, TRUMPF, Amada Co. Ltd., Komatsu Ltd., Dalian Machine Tool Group Corporation (DMTG), Schuler, JTEKT Corp., and Okuma Corp. The other players profiled in the report include - Ace Micromatic Group, Doosan Machine Tools, Electronica Hitech Engineering Pvt. Ltd., FFG European & American Holdings GmbH, Georg Fischer Ltd., Gleason Corporation, GROB-WERKE GmbH & Co. KG, Haas Automation Inc., Hyundai WIA, INDEX-Werke GmbH & Co. KG Hahn & Tessky, Spinner Machine Tools, Makino, and Chiron Group.

Segmentation Outlook of the Global Machine Tools Market

By Product 

• Milling Machine
• Lathe Machine
• Laser Machine
• Drilling Machine
• Turning Machine
• Grinding Machine
• Electrical Discharge Machine
• Machining Centers

By Automation Type

• CNC Machine Tools
• Conventional Machine Tools

By Industry

• Automotive
• Aerospace and Defense
• Construction Equipment
• Power and Energy
• Industrial
• Others

By Sales Channel

• Dealers and Distributors
• Events and Exhibitions

By Region

• North America
  • The U.S.
  • Canada
  • Mexico
• Europe
  • Western Europe
    • The UK
    • Germany
    • France
    • Italy
    • Spain
    • Rest of Western Europe
  • Eastern Europe
    • Poland
    • Russia
    • Rest of Eastern Europe
• Asia Pacific
  • China
  • India
  • Japan
  • Australia & New Zealand
  • ASEAN
    • Malaysia
    • Singapore
    • Thailand
    • Indonesia
    • Cambodia
    • Vietnam
    • Rest of ASEAN
  • Rest of Asia Pacific
• Middle East & Africa
  • UAE
  • Saudi Arabia
  • Turkey
  • Egypt
  • South Africa
  • Nigeria
  • Rest of MEA
• South America
  • Argentina
  • Brazil
  • Columbia
  • Rest of South America