Interview The increase of machine-tool consumption in China
XingBin Li, International Director (Asia Pacific) at the Association for Manufacturing Technology shares his views on the machine-tool business in Asia along with interesting insights into the Indian market.
The Association for Manufacturing Technology (AMT) represents and promotes US-based manufacturing technology and its members – those who design, build, sell and service the continuously evolving technology that lies at the heart of manufacturing.
How does AMT view the Asian market for its business?
XingBin Li: In the Asian region, China is the focus market for US machine-tool technologies as it is the largest machine-tool consumption nation in the world. China also consumes about 40 % of the total global machine-tool production and ,according to recent statistics by CMTBA (China Machine Tool Builders Association), the machine-tool consumption in China was USD 29.8 billion in 2017 (noting an increase of 7.5 % over the previous year).
Japan and South Korea have a very strong machine-tool industry, with domestic buyers. Taiwan has numerous machine-tool companies but it has an export-oriented and limited market.
India, on the other hand, is a big potential market for us as the Indian machine-tool industry is relatively weak, compared to the other markets. Currently, the country imports about 56% of machine tools from other countries. Also, India has been witnessing a growth of 6-8% for almost a decade now, and therefore, offers a good environment for investment.
You mentioned that India is an important market for the US machine-tool technologies – how many US companies have already invested in India?
Around 10-12 US-based machine-tool companies have invested in the Indian market and have established or are in the process of establishing manufacturing facilities in Bengaluru and Pune. The major industries that we are focussing on are the automobile, aerospace, defence and electronics industry. Karnataka is the largest automobile manufacturing state in the country and Chennai, the second largest. About 60% or even more of the total machine tools in the country go into the automobile industry.
What are your views on the future of the Indian market?
In future, we believe that India has a great potential for the US manufacturing industry, and owing to this, we have set up a Tech Centre in Chennai, India. The Modi Government has announced the “Make in India” initiative as the national strategy and also aims to increase the manufacturers contribution towards the GDP from 15-26% over the next five years. This is going to be difficult, but we see a change as more and more Indian industries such as automobile, aerospace and defence are growing and the demand in the Indian market is picking up. At the moment, it’s low but we can witness a trend and are waiting for the big momentum.
- In 2017, the US GDP growth was about 2.3% and the US machine-tool industry is predicted to grow by 3-5 % over the next two years.
- In terms of machine-tool consumption in the Asian market, China takes the lead, followed by Japan, South Korea, India and Taiwan.
This article first appeared on www.maschinenmarkt.international.