German Machine Tool Industry Expands, Engineering Sector Now Leading Customer
The German machine tool industry is witnessing a significant shift in its customer base, as the engineering sector overtakes the automotive industry for the first time. According to a recent customer structure survey by the German Machine Tool Builders’ Association (VDW), around 27% of the industry’s production was supplied to the automotive sector last year, marking a decline of approximately 16 percentage points in just four years.
“The automotive industry remains one of the most important customer sectors for the German machine tool industry,” stated Franz-Xaver Bernhard, Chairman of the VDW. “The result does, however, reflect two developments. Firstly, the transformation to electric drives means the automotive sector invests significantly less in machining. At the same time, machine tool manufacturers are also diversifying their customer portfolio.”
This diversification is evident as the share accounted for by original equipment manufacturers (OEMs) has more than halved to 10% since 2019, while the share from suppliers has only marginally decreased from 19.9% to 17.2%. Some manufacturers have proactively adapted to the transformation, serving the electric vehicle (EV) market. Wolfram Weber, Board Member of Grob in Mindelheim and Chairman of the VDW Economic Committee highlighted, “Entering the field back in 2016, we reacted to the shift towards electric motors at an early stage. Today, we offer comprehensive solutions for drive and energy storage systems. This is reflected in our business figures. Most machining systems can also produce workpieces for EVs – and this area accounted for around 60% of our output of around EUR 1.8 billion in the 2023/24 financial year.”
For the first time, the engineering sector, including its various sub-sectors like tool and mold making, agricultural machinery, and components such as hydraulics and pneumatics, accounted for the largest share of machine tool demand at around 30%, an increase of 6 percentage points since 2019. This shift underscores the sector’s ongoing diversification and innovation to meet the evolving needs of the industrial landscape.
Dr. Torsten Schmidt, CEO of the Nürtingen-based Heller Group, commented on the decline in the proportion of deliveries to the automotive industry. “In 2017, 80% of our turnover was still coming from our business with the automotive industry. By 2022, however, it had fallen to 50%. Last year, the combustion engine only accounted for 6% of incoming orders. Nevertheless, the truck and agricultural sectors remain of central importance to us. We now manufacture milling/turning centers and 4- and 5-axis machining centers for tool and mold making, the aerospace industry, general engineering, and many other sectors.”
The changing customer landscape also includes increased demand from manufacturers of metal products, the aerospace industry, electrical engineering/electronics, and metal production and processing. Additionally, sectors like precision mechanics, rail vehicle construction, power engineering, and medical technology are gaining prominence, driven by digitalization, the energy transition, climate protection, infrastructure modernization, and an aging population.
“The wide variety of customer industries shows how the machine tool industry is fulfilling its role as an enabler and how it can offer significant added value to growth industries in the future,” concluded Bernhard.