Transformation and upgrading of the machine tool market: improving the competitiveness is the right way

How is the machine tool industry expected to transform and upgrade its current situation and operational challenges? What should be the key focus during this process? And how can domestic machine tools become more competitive in the global market? The central point of this transformation is improving the market competitiveness of medium and high-end CNC machine tools. While many talk about transformation, the real question is: how should it be implemented? In light of the current macroeconomic environment and the state of the industry, I believe that focusing on enhancing the competitiveness of these high-value products is the most critical path forward. China's machine tool industry has been undergoing development and transformation for years, making significant progress. Over the first decade, the industry focused on expanding scale and variety. This period saw growth in production capacity, improved facilities, increased workforce, and higher productivity. Many products that were once impossible to make are now being produced, moving from "can't do" to "can do." During this phase, the industry filled many product gaps, and the market was largely in a state of shortage. However, as the national economic structure changes, we must re-evaluate what transformation and upgrading truly means today. It’s important to note that compared to advanced companies in developed countries, China still lags at the lower end of the global industrial chain. Our high-end product market share hasn’t grown significantly, mainly due to insufficient market competitiveness—especially in terms of stability and reliability. Compared to similar products in advanced countries, there is still a big gap. Therefore, one of the main goals of our current transformation is to focus more on "doing it well" based on existing scale and variety, achieving a leap from "can do" to "do it well." The task of transformation is tough, but maintaining confidence is essential. 2012 marked a turning point for the industry. After over a decade of rapid growth, China became the world’s largest machine tool manufacturer and consumer. However, with the global financial crisis and slowing economic growth, the long-standing supply shortages have disappeared. Demand has shifted: total market demand has dropped, while demand for high-end products has surged. As a result, orders for mid-to-low-end products have declined sharply, while imports of high-end CNC machines have risen. Industry transformation has become an urgent mission, and improving the competitiveness of mid-to-high-end products is now a top priority. Facing these challenges, we need to maintain the confidence we deserve. After years of development, the industry's overall strength has significantly improved, and it now has the foundation to support comprehensive transformation. In 2012, the industry achieved an export value of $2.7 billion in metalworking machine tools, up 13.4% from 2011. Even more impressive was Jinan No. 2 Machine Tool Group winning five large-scale stamping line contracts worth over $200 million for Ford Motor’s U.S. factories. This was the first time Ford purchased non-German stamping equipment in 20 years and marked a major breakthrough for Chinese machine tool technology. These achievements show the growing international competitiveness of China’s machine tool industry and serve as a model for future transformation. Transformation requires collaboration across multiple parties to create synergy. The slow progress in industry transformation stems from various factors. One reason is past practices—focusing on product development without enough attention to market research or full industrialization. In other words, there was too much emphasis on technology and not enough on practical application and industrial scaling. Products may look advanced on paper, but they often fail in real-world use. Or they may work, but at too high a cost, lacking market appeal. This situation is also influenced by policy orientation. There has been a strong focus on the number of patents, papers, and results rather than bringing innovations to market. While this helped fill product gaps, it didn’t always lead to industrialization. It also misled some enterprises, which prioritized awards and subsidies over real market success. Although technology is the primary productive force, if it isn’t properly commercialized, it won’t drive true transformation. Therefore, it’s crucial for all stakeholders to work together to push the industry toward sustainable development.

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