MACHINE TOOLS MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2024-2031)
Global machine tools market is estimated to be valued at US$ 104.37 Billion in 2024 and is expected to reach US$ 124.86 Billion by 2031, exhibiting a compound annual growth rate (CAGR) of 2.6% from 2024 to 2031.
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The steady growth of the automotive, industrial machinery, and metalworking industries is driving increasing demand for machine tools for precision manufacturing and component fabrication. The market is expected to witness positive growth over the forecast period supported by ongoing investments in advanced manufacturing technologies across developing economies. Additionally, the trends towards additive manufacturing and computer numerical control machine tools will support more automation in production lines. The adoption of smart factory solutions that incorporate robotics, IoT, and data analytics will promote greater efficiency.
Market Driver - Increasing demand for precision machining in various industries
The need for precision machining has seen a marked rise across industries in recent years. Manufacturers are consistently pushing to develop components and parts with tighter tolerances and improved dimensional accuracy that can withstand higher stresses. This has increased the requirement for machine tools that can deliver micron-level precision in machining of materials. Industries such as aerospace, defense and automotive have been at the forefront of this trend where components need to meet stringent quality standards. Aircraft engine manufacturers, for instance, demand extremely high precision in milling of turbine blades and vanes that can operate reliably in varying stress conditions at high speeds. Similarly, automotive OEMs expect tight tolerances and surface finishes in crankshafts and connecting rods to optimize efficiency of engines.
Medical device makers too have heightened their focus on precision as even minor deviations can impact functionality of implants. This has spurred the demand for CNC lathes and mills with advanced controls and feedback systems. Semiconductor wafer fabrication is another area pushing the boundaries due to continual miniaturization of circuits. Technologies such as 3D printing have thrown up their own set of precision needs as parts need to be produced with micron-level layering accuracy. All such requirements across industries are acting as a fillip for machine tools incorporating innovations such as high-speed spindles, linear motor technology, advanced encoders and multi-sensor feedback. Toolmakers have recognized such evolving needs and are continually enhancing capabilities of their systems, be it higher rapids and tighter positioning repeatability in mill-turn centers for automotive or improved thermal stability in EDM machines for die and mold making. This growing insistence on precision across manufacturing sectors remains a key driver sustaining growth momentum for machine tools market.
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Advances Transforming the Technology of Machine Tools
Constant technological evolution has been characteristic of the machine tools landscape. Toolmakers have left no stone unturned in their efforts to make systems more productive, versatile as well as user-friendly for operators. One notable advancement is computer numerical controls (CNC) which have now become ubiquitous. Early adoption of CNC brought automation to shop floors while latest generations of controls featuring advanced interfaces and expansive programming choices have simplified usability. Further, distributed numerical controls (DNC) providing centralized programming/operation over networks and cloud-based controls are new frontiers. Meanwhile, motion and drive technology has seen sweeping upgrades. Use of direct drives replacing belt-gear arrangements and linear motor technology for feed axes have enhanced speed and accuracy manifold.
Newly developed high-precision linear encoders with nanometer resolution and multi-axis servo drives enabling perfect contouring have taken cincomatic performance to new levels. Similarly, adoption of high-powered and efficient spindles coupled with innovative tools holding technologies have boosted material removal rates. Machining centers today offering faster rapids and higher speed/feed parameters are a testament to this. Further areas witnessing landmark changes include integrated automation through collaborative robots, non-contact in-process inspection/measurement systems, intelligent tool cribs and AI/IIoT enabled predictive maintenance. The evolving needs across industries have spurred toolmakers to consistently introduce redesigned machines leveraging such innovations. This continuous upgradation remains instrumental in maintaining machine tools industry's growth momentum amidst technology disruptions across manufacturing landscape.
For instance, In December 2022, EIT Manufacturing, the largest innovation community in the European industry, joined forces with AMT - Advanced Machine Tools, a newly established biennial event showcasing the latest innovations in machine tools and related technologies. This collaboration aims to foster innovation and digital transformation in the metal industry, providing industrial manufacturing specialists in Europe with access to a wealth of opportunities through their partnership.
Key Takeaways from Analyst:
The global machine tools market is poised to witness strong growth over the coming years. There are several factors that are expected to drive the demand for machine tools globally. Rapid industrialization and rising manufacturing output in developing economies such as China, India, and other Asian countries will be a key growth driver. These regions are expanding their manufacturing capacity significantly which will translate into greater demand for machine tools. Additionally, strong capital expenditure on advanced manufacturing technologies by industrial operators across industries like automotive, aerospace, electronics will propel the machine tools market forward. Further, increasing complexities in design and production requirements are pushing manufacturers to invest in precision machinery to meet quality and efficiency needs.
However, the market may face some challenges. High initial investment costs associated with machine tools can act as a restraint, especially for small businesses and players in price-sensitive industries. Another factor hampering the market's potential is the severe talent crunch in advanced manufacturing domains globally. On the other hand, there are also opportunities for machine tools providers. The growing adoption of Industry 4.0 technologies including automation, IoT, and data analytics presents a lucrative avenue for toolmakers. Introducing smart, connected machines integrated with advanced software will open new revenue streams.
Market Challenge - High initial investment costs
One of the key challenges faced by players operating in the global machine tools market is the high initial investment costs associated with machinery and equipment. Machine tools such as metal cutting machines, metal forming machines, and others require heavy capital expenditure since they use advanced technologies to ensure precision and quality. The machinery is equipped with complex electromechanical and hydraulic systems that substantially increase costs. Moreover, with continuous technological upgrades, machine tools have short life cycles, which compels manufacturers to frequently invest in new assets. High initial costs of setting up a production facility pose significant entrance barriers for small and medium enterprises. The high capex burden may deter certain end-use industries such as automotive, aerospace, and electronics from procuring expensive equipment. This acts as a major restraining factor for the market's growth especially in price-sensitive and cost-cautious regions.
Market Opportunity - Growth in the adoption of automation and Industry 4.0 technologies
The global machine tools market is set to witness new opportunities arising from the increased adoption of advanced automation and Industry 4.0 technologies by manufacturing companies. There is a rising inclination among automakers, electronics producers, and others toward incorporating smart, connected machines integrated with IoT, AI, and data analytics into their production lines. This helps improve productivity, reduce downtimes, optimize processes, and manufacture at a higher scale with more precision. The implementation of robotics, 3D printing, predictive maintenance, decentralized control systems, and digital twins is bringing Industry 4.0 reality on the shop floor. The augmentation of machine tools with Industry 4.0 technologies makes them an intelligent investment for companies seeking competitive advantages. Hence, growing investment toward factory automation and manufacturing technologies modernization could create lucrative prospects for machine tools providers in the approaching years.
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Insights By Product Type - Rising Demand for Precision Machining Drives Growth of Milling Machines
In terms of product type, milling machines is expected to contributes 30.1% share of the market in 2024 owing to their wide range of applications across industries that require high precision machining capabilities. Milling machines excel at milling various shapes and profiles into workpieces through the powerful machining process of milling. Their spindle can exert high torque and rotational speed to remove material through rotating multi-tooth cutters. This enables milling machines to machine flat, contoured and even complex 3D surfaces with extreme accuracy depending on the type of milling machine.
The automotive industry is a key driver of milling machine demand as various engine, transmission and other precision metal components require milling for their detailed design and tolerances. Aerospace is another major industry that relies heavily on milling for aircraft structural parts and jet engine components. General engineering across machinery manufacturing also utilizes milling to produce fittings, small parts and other machined components. As the level of automation and precision required across these industries increases through trends like Industry 4.0, the demand for versatile, high precision milling machines continues rising to meet tighter accuracy specifications.
For instance, In June 2021, FACC AG, a leading manufacturer of aircraft parts based in Austria, announced the expansion of its partnership with Airbus. This expansion involves FACC AG producing empennage components for Airbus' A220 airliner, thereby supporting Airbus' growth strategy for the future. FACC AG utilizes advanced 5-axis CNC milling machines to manufacture these critical aircraft components.
Insights By Material Type - Metal Machining Dominates the Material Type Segment Due to Industrial Production Needs
In terms of material type, metal is expected to contributes 63.5% share of the market in 2024 primarily due to large scale metal production across manufacturing industries. Metals have been the most commonly used engineering materials owing to their desirable properties like strength, ductility and resistance to corrosion. Steel, aluminum, titanium and other alloys form the structural basis of automobiles, aircraft, machinery, tools, ships and various heavy equipment. Mass production of these metal-intensive goods creates sustained demand for machine tools suitable for metalworking applications.
Metal cutting requires robust machine tools equipped to handle tough metal stock and apply cutting forces precisely. Lathes, milling machines, grinding machines and other specialized metal cutting equipment are designed to optimize metal removal rates while maintaining close tolerance finishing on metal surfaces. CNC (computer numerical control) and high-pressure coolant systems further enhance metalworking efficiency on machine tools. With the majority of machined components still being metallic, metal machining dominates the Global Machine Tools Market in terms of material type usage.
In contrast, plastics and composites have lower material removal needs compared to metals, restricting their shares in this segmentation. However, their use is gradually growing as replacements for metals in applications aiming to reduce weight and operational costs through engineering thermoplastics and fiber reinforced polymers. Specialized machine tools are also being developed for intricate plastic and composite part fabrication to expand the potential of these materials.
Insights By Application - Automotive Sector Fuels Growth in Machine Tool Applications
In terms of application, automotive is expected to contributes 37.9% share of the market in 2024 due to extensive reliance of the automotive industry on machine tools. Manufacturing modern motor vehicles requires an immense level of precision part production that can only be achieved through CNC machine tools. Intricate engine components, transmission gears, chassis fittings and other structural automobile assemblies demand tight geometric specification holding within microns.
Most automotive OEMs and their large supply chains have built extensive in-house machine tool capabilities or collaborate closely with dedicated machining job shops to meet just-in-time production needs. Lathes, mills, grinders, and complex multi-tasking machines produce cylinder heads, connecting rods and other high-precision engine parts 24/7 to sustain automaker's worldwide assembly lines. Similarly, automotive body shops rely on highly automated machining centers to stamp panels, moldings and forged items within micron level flatness and intricate profiling.
Advancements in electric/hybrid powertrains, autonomous technologies and lightweight vehicle design are adding further complexity and quality requirements that can only be addressed through coordinated investment and innovation in machine tool technologies tailored for automotive manufacturing needs. As global automotive production continues rising to meet emerging market demand, wider deployment of latest generation CNC machine tools remains paramount to support resulting components fabrication requirements. As a major stakeholder, automotive industry drives the highest share of machine tool applications.
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North America dominates the market and the region is expected to hold 40.3% of the market share in 2024, mainly driven by the U.S. After experiencing a slowdown post the 2008 recession, the machine tools market has witnessed renewed growth in recent years supported by resurgence in domestic manufacturing activities. Growing capital expenditure on factory automation and adoption of new technologies by small and medium enterprises have significantly contributed to market expansion. Furthermore, reviving aerospace and automotive sectors have augmented domestic demand for high-precision machines.
The Asia Pacific region, led by China, is showcasing the fastest growth in the global machine tools market. China's machine tools industry has been growing rapidly over the past two decades, fueled by the country's rising manufacturing prowess and growing export domination in many industrial sectors. With a strong presence of OEMs and component suppliers, China today accounts for over half of the global demand for machine tools. Its leading position is primarily a result of strong government support towards manufacturing, availability of low-cost skilled labor, and massive supplier ecosystem for machine tools. The stable resurgence of the American manufacturing industry is a major factor driving the demand for technologically advanced and expensive machine tools in the country. Mexico is another high potential market in North America, experiencing rapid industrial growth owing to US companies shifting operations to leverage lower costs.
That covers the key regional trends in the dominant and fastest growing regional markets without providing any specific data points. Let me know if you need any part of the analysis to be modified or expanded.
For instance, according to the China Association of Automobile Manufacturers (CAAM), vehicle production in China saw a 3% increase in 2022 compared to 2021. This growth is attributed to rising investments from the government and major automobile companies in response to the increasing demand for vehicles. Additionally, there has been a significant rise in the use of machine tools for the production of automotive components.
Machine Tools Market Report Coverage
| Report Coverage | Details | ||
|---|---|---|---|
| Base Year: | 2023 | Market Size in 2024: | US$ 104.37 Bn |
| Historical Data for: | 2019 To 2023 | Forecast Period: | 2024 To 2031 |
| Forecast Period 2024 to 2031 CAGR: | 2.6% | 2031 Value Projection: | US$ 124.86 Bn |
| Geographies covered: |
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| Segments covered: |
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| Companies covered: |
DMG Mori Seiki AG, Haas Automation, Inc., Mazak Corporation, Okuma Corporation, FANUC Corporation, Siemens AG, Mitsubishi Electric Corporation, Hyundai Wia Corporation, Makino Milling Machine Co., Ltd., Trumpf GmbH + Co. KG, JTEKT Corporation, EMAG GmbH & Co. KG, Kennametal Inc., Hardinge Inc., and Schütte GmbH |
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| Growth Drivers: |
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| Restraints & Challenges: |
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*Definition: The global machine tools market consists of companies involved in the manufacturing, distribution, and sales of various types of machine tools and equipment used for metal forming, cutting, grinding, welding, and other forming and fabricating applications across industries. Major product segments in this market include CNC metal cutting machines, metal forming machines, grinding machines, electrical discharge machines, and laser and water-jet cutting machines. The global machine tools industry caters to a diverse customer base involved in automotive, aerospace, mold and die making, electronics, mining, shipbuilding, and other manufacturing sectors.
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About Author
Ramprasad Bhute is a Senior Research Consultant with over 6 years of experience in market research and business consulting. He manages consulting and market research projects centered on go-to-market strategy, opportunity analysis, competitive landscape, and market size estimation and forecasting. He also advises clients on identifying and targeting absolute opportunities to penetrate untapped markets.
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