The machine tool industry needs to adapt to the "new normal"

In his government work report this year, Prime Minister Li Keqiang proposed to implement “Made in China 2025” and insist on innovation-driven, intelligent transformation, strengthening the foundation, and green development, and accelerating the transition from manufacturing to a manufacturing power. In accelerating the deployment and implementation of the “Made in China 2025” and fulfilling the requirements for manufacturing upgrade, we mentioned that we must take the deep integration of informatization and industrialization as the main line, develop ten major fields such as “high-end CNC machine tools and robots,” and strengthen industrial infrastructure capabilities. Improve the level of technology and product quality, and promote smart manufacturing and green manufacturing.

The Chinese economy under the new normal state bid farewell to the rapid growth of the past few decades and stepped into an era that pays more attention to quality and efficiency. The machine tool industry is the cornerstone of the industry and the cornerstone of the manufacturing industry. Today, it has also entered the “new normal” with the Chinese economy.

At the International Machine Tool Information Conference (IMTIC2015), Chen Huiren, executive vice chairman and secretary-general of the China Machine Tool Industry Association, made a full and vivid interpretation of the Chinese machine tool industry.

Industry under pressure

Affected by the changes in the market environment and other growth factors, the Chinese machine tool industry has ended its rapid growth for about 10 consecutive years, and has entered the downward range since the second half of 2011. Regarding the current status of the machine tool industry, Chen Huiren said that by the end of 2014, the industry has not yet gone out of the downside.

According to the statistics of the China Machine Tool Industry Association, the output of metal processing machine tools in China continued to decline from 2011 to 2014, with a year-on-year decrease of 1.1% in 2014. From January 2014 to February 2015, the output of metal processing machine tools in China continued to decline.

At the same time, due to changes in market demand, the output structure of the Chinese machine tool industry has been continuously optimized during continuous output decline. From 2011 to 2014, the CNC conversion rate of metal processing machine tools in China's mainland rapidly increased from 64.2% in 2011 to 75.3% in 2014, reflecting the positive structural changes in China's machine tool industry.

Contrast with the overall decline in the industry, the contrast is that exports continue to grow. The data shows that although the growth rate of China's machine tool industry's export value has changed greatly from 2011 to 2014, the total export volume has maintained a continuous increase. In 2014, the growth rate of exports rebounded to 18.8%. In response, Chen Huiren stated that the growth of exports reflects the changes in the global market structure and the industrial competition. On the one hand, the process of reindustrialization in developed countries has obviously been effective, with the U.S. market being the most typical; on the other hand, other emerging economies and development. The development of the national manufacturing industry has produced a diversion from China's manufacturing industry. The demand for related markets has increased significantly. The Vietnamese market is the most typical. China's machine tool exports to Vietnam have doubled last year.

Accelerate the upgrade of demand structure

Since the second half of 2011, the Chinese machine tool consumer market has begun to undergo a significant change, manifested as "the total demand is significantly reduced, and the demand structure has been accelerated."

According to Chen Huiren, the continuous decline in China's machine tool consumer market is closely related to changes in China's economic fixed asset investment. The growth rate of China's fixed asset investment continued to decline, from 24.5% in 2010 to 15.7% in 2014. In the first quarter of 2015, it further slowed to 13.5%.

While the total demand has dropped significantly, the demand structure has been significantly accelerated. Chen Huiren summed it up in three directions: automation, customization and shift upgrades. “The demand for automation is growing rapidly. This is the market change that the machine tool industry in the world can feel. On the one hand, all areas of the manufacturing industry are upgrading, and there are new requirements for quality and efficiency. More important is the relationship between supply and demand for China's labor force. Inflection point changes occur now domestic and foreign manufacturers take response measures in this regard.Customization, the current users put forward more personalized needs, and manufacturers want to produce the same thing, this is an eternal contradiction, Manufacturers are even more of a challenge. As for shift upgrades, this is a general demand in society."

In addition to the above changes, Chen Huiren specifically proposed that the changes in China's economic structure will have an impact on the machine tool consumer market. Since 2011, the contribution rate of consumption to GDP growth has exceeded investment for the first time in four consecutive years as China's economic growth.

The impact of this structural change on China's machine tool consumer market can be seen in the growth and changes of the two major varieties of Chinese machine tool industry (Gold Cut and Forming). The data shows that since 2012, the two major varieties have clearly differentiated. In January-November 2014, new orders for Jin He Machine Tools, which are closely related to the investment in fixed assets, fell 4% year-on-year, while the number of forming machines closely related to consumer products increased by 8.6% year-on-year. “With the gradual adjustment of China’s economic structure, the driving force of consumer goods manufacturing on the Chinese machine tool consumer market has become increasingly significant. Accordingly, the driving force of investment product manufacturing on the market has gradually weakened,” said Chen Huiren.

2015 basic estimate

Chen Huiren made a basic estimate of China's machine tool industry and market in 2015.

First, the Chinese machine tool consumer market will suffer further downward pressure. Chen Huiren listed economic data for the first quarter of 2015 as support. “In the first quarter of 2015, GDP grew by 7%, which is the lowest figure since the financial crisis in 2009. The growth rate of fixed asset investment was 13.5%, and last year’s data was 15.7%. The industrial added value increased by 6.4% year-on-year. The lowest data since the data. Overall, the first quarter's data reflects China's downward pressure."

Second, the basic characteristics of the Chinese machine tool consumer market and the latest changes will be more apparent.

Third, the positive actions of the government and enterprises will effectively hedge downward pressure. Chen Huiren said that the government is working hard. "Since the fourth quarter of last year, China's macroeconomic policy has entered a new round of adjustments, and the Chinese economy is now carefully grasping steady growth. On November 22 last year, the central bank cut interest rates, and within a 100 days, cut interest rates for the second time. This year, February 5 On the 19th, the central bank lowered its target. On April 19th, it was once again reduced. This is a force that has never been seen before. The positive role of the government has been particularly pronounced.” And companies are not completely passive. The company's role is to adjust itself to adapt to market changes. "In recent years, our companies have gradually adapted to the changes in the market structure, and adapting them will be able to hedge downward pressure to a certain extent."

Fourth, the structural differentiation of market structure and enterprise competition will further manifest itself. Now that the market is different, the competition of enterprises is also diverging. “In the first quarter of this year, when the Central Government summed up the Chinese economy, it said that the division between the regions and the industries was the same in our machine tool industry. The market share is changing, the market structure is reshaping, and the competition between companies is different. This differentiation is In 2015, it will become even more apparent. Some companies will go down and some will go up." Chen Huiren pointed out that in the downturn of the market, enterprises that have long dominated the industry and small enterprises that are at the bottom of the industrial value chain have been hit hard and have collapsed. A batch. At the same time, some outstanding private enterprises have risen against the trend and are very active.

Faced with the new changes, new features and new normality in the machine tool industry, how should industry companies respond? Chen Huiren stated that the most pressing problem that needs to be solved in the current machine tool industry is homogenization. It is better not to be high-end but also to be different. "The new round of transformation and upgrading must avoid the convergence of strategies. The low-end and middle-end products will do a good job of differentiation. There is also much to be achieved."