Though automotives continue to be the major end-users of machine tools, manufacturers are now diversifying their manufacturing solutions to tap emerging sectors such as aerospace, defence, railways, infrastructure equipment, etc. 

 

Machine tools sector, which is considered as a strategic industry, is part and parcel of manufacturing, particularly discreet manufacturing segments such as automobiles, defence, railways, plastic machinery, medical electronics and white goods. Experts believe that the machine tool industry is the key to the successful implementation of the government’s flagship Make in India initiative, given that it makes the machines required for the manufacturing sector. 

 

M K Narasinga Rao, Managing Director of LVD - Strippit India Pvt Ltd, states, “The machine tools industry is the backbone of any developed nation and plays a catalytic role in driving industrialisation. The present phase is undergoing changes and it will bring a positive impact in growth and development. There is a good positive vibe in the market. With the new reforms of the government favouring the industry, I think the industry is poised for growth.”

 

Market outlook 

 

Indian machine tool industry can be classified into metal-cutting machines and metal forming machines. According to Indian Machine Tool Manufacturers’ Association (IMTMA), metal cutting accounted for 89.8% of the total output of machine tools in India in 2016-17. CNC machine tools which are highly productive and cost effective comprised about 84% of the machine tools produced during 2016-17. The estimated production of metal working machines during 2016-17 was Rs 5,803 crore ($ 853 million).

 

“Indian machine tool industry is reinventing itself through innovations to attune itself to the changing demands of its customers. The industry registered an impressive growth rate of 23% during 2016-17,” says V Anbu is the CEO and Director General, IMTMA.

Technavio’s market research analyst forecasts the production of machine tools in India to grow at a CAGR of 13% during 2016-2020. This growth in the overall consumption is attributed to the increasing import of advanced product lines from countries like Japan, Germany, and Italy.

 

There has been a rise in investments and favourable government initiatives to increase the production of metal-cutting machine tools because of their use in manufacturing sector. “Fortunately, all machine tool builders have enjoyed tremendous growth over the last four to five years on the back of the huge demand of smart phones and ongoing demand from the automotive industry,” says Kishore A P, National Sales & Marketing Manager – India, ANCA Machine Tools Private Ltd.

 

The growth of automotive industry in India is the primary growth driver for this market. The automotive and auto components industry has accounted for about 40% of machine tools consumption in India, which is the automotive export hub in the South Asian market for some of the major auto OEMs like Ford, Isuzu, Suzuki, Honda, BMW, Mercedes-Benz, and Fiat.

 

Rising automation

 

Due to rising wages, lack of availability of skilled manpower and quality considerations, machine tools industry is deploying varying levels of automation to drive efficiency. In spite of this, use of automation is quite low in the country. However, experts believe level of automation will accelerate in the coming years.

 

According to Ajey Phatak, Head - Marketing, ?Beckhoff Automation Pvt Ltd, role of automation is very important and directly linked to production, job reworking and overall manufacturing efficiency because the core of this efficiency is machine cycle time & consistency. The machine cycle time decides the production cycle time. The machine cycle time depends on PLC/motion cycle time and, hence, the control system becomes the key area which decides the production efficiency, machine uptime down time and rejections.

 

“Slowly but surely machine tools industry has started demanding automation. But lack of innovation in machine design is bottleneck. Innovative and modular designs have to be the basis for implementing automation,” opines Phatak. There has been a growing need to adopt CNC-based machine tools in the end-user segments to achieve precision and accuracy in the production process. Moreover, non-CNC machines consume more time and energy and are prone to considerable wear and tear in a short period. This demand for CNC-based machines is expected to aid the growth of the machine tools market in India over the next four years.

 

The current market demand for CNC grinding machines is driven by computers, consumer electronics and communication (primarily for the smart phone market). The end user demand for elegance and function has meant products that have more complex tool requirements. The influx of robotics and automation and a rapid uptake of new materials and composites have triggered a shift in manufacturing techniques.

 

“In CNC machining and other types of manufacturing, the adoption of cloud computing - collecting data from many devices at one point - will be transformative, allowing intelligent, autonomous decisions throughout supply chains. The cloud is one of the ‘nine pillars’ making up Industry 4.0, and critical for the Internet of Things (IoT) trend, which McKinsey predicts will create nearly $ 5 trillion in value in business-to-business (B2B) settings annually by 2025,” says Kishore. 

 

Since 2014, ANCA India has seen a huge rise in number of its customers (from 10% to 50% of all machines sold) ordering CNC grinding machines with robot loaders. “Robotics now has greater capabilities and more flexible applications in the grinding process. With increased capability, simple automated loading applications have been followed by wheelpack changes and other possibilities,” Kishore points out.

 

Cutting tools segment

 

Trends in metal working industries are driving developments in the cutting tool industry. Broad trends observed are change of materials; more frequent model changes, necessitating higher levels of flexibility; environmental considerations leading to higher emission standards in automotive industry; and higher use of automation at customer industries require tool performance to be stable and predictable. “In addition to all the above, need for higher productivity and lower cost of manufacturing are driving innovation in products and processes,” says L Krishnan, Managing Director, TaeguTec India Pvt Ltd.

 

The government’s push to encourage domestic production in defence & aerospace industries is likely to open up new opportunities in the sector. Krishnan opines, “Make in India efforts will certainly result in higher demand from industries like defence and aerospace in the medium to long term. These demands will be very different from those arising in the automotive and auto parts setups, due to materials and volumes of manufacturing.”

 

Competitive landscape 

 

The machine tools market in India is highly fragmented with the presence of numerous small, medium, and large suppliers, which includes international and regional players. The providers in this market compete on the basis of product differentiation, service portfolio, and pricing. The intense competition among the vendors has resulted in increased investment in R&D and implementation of high technology solutions in machine tools.

 

“Competition has been fairly stiff in the phase of reduced growth in the Indian market. With the present Government’s pro-growth investment policies in infrastructure related projects (in roads, power and railway sectors), we expect the overall growth to become better. Then, probably, the size of the market would give us enough space to operate. As of now, there is a fair amount of competition and we try to overcome by providing value added services to our customers,” comments V Srinivasan, CEO of Meiban Engineering Technologies Pvt Ltd (an associate company of Muratec, Japan).

 

While automotive will continue to be the major user, machine tool manufacturers are now diversifying their manufacturing solutions to tap emerging sectors such as aerospace, defence, railways, infrastructure equipment, etc. This is expected to give domestic consumption of Indian machine tools a big boost in future.