ARC says CNC market bombed
Capital Equipment Surplus
During the rapid growth period, machine tool builders scaled up businesses for what seemed to be a new level of demand for capital equipment in the market. Many of the serial machine builders in Japan, Korea, and Taiwan built up inventory in the channel, creating a tremendous surplus in machinery that would not be depleted until the second quarter in 2010. Furthermore, manufacturers that had purchased capital equipment to meet the increasing demand for finished goods were faced with overcapacity in their operations.
Machine Tool Builders Suffer
The economic downturn hit the discrete manufacturing industries particularly hard, placing enormous business pressure on the OEM machine tool builders that serve these industries. In today’s tight, risk-averse, capital environment, end user manufacturers only purchase new equipment when they can no longer effectively redeploy existing equipment, delaying capital equipment purchases until the last possible moment. The recession that began in 2008 significantly impacts the way today’s manufacturers conduct business. Pressure points mount for machine tool builders of standard machines and custom-engineered machines, as past business models no longer match current economic realities.
Emerging Markets Drive Future Growth
The regions that will experience the largest growth over the next several years will be South America and Asia. Western Europe will continue to remain a dominant region, but the focus will remain on the high performance and high valued machinery. Over the course of the forecast period it is expected that the emerging markets will expand beyond the low valued machinery market and make inroads into the midrange performance in machine tools. This is inevitable as the domestic manufacturers seek to improve their manufacturing competency.
About ARC: Founded in 1986, ARC Advisory Group is the leading research and advisory firm for industry. Our coverage of technology from business systems to product and asset lifecycle management, supply chain management, operations management, and automation systems makes us the go-to firm for business and IT executives around the world. For the complex business issues facing organizations today, our analysts have the industry knowledge and first-hand experience to help our clients find the best answers.
MORE INDUSTRY NEWS
Industrial Ethernet infrastructure component sales expected to recover in 2017
By John Morse, IHS Markit
The latest IHS market report on Industrial Ethernet estimated that the world revenue growth 2014 to 2015 was a healthy...
Molex announces acquisition of Phillips-Medisize corporation
Phillips-Medisize will operate as an indirect subsidiary of Molex, LLC. Financial terms of the transaction were not disclosed. Phillips-Medisize...
Honeywell and Flowserve announce collaboration on Honeywell's INspireT IIoT program
The goal of this collaboration is creation of an infrastructure that gives customers secure methods to capture and aggregate data, so that it can...
Emerson announces launch of Operational Certainty engineering performance program
Operational Certainty is a technology and engineering-based program designed to help industrial companies achieve top performance and recover more...
Teradyne announces Jürgen von Hollen as Universal Robots president
Mr. von Hollen was most recently the Executive President of the Engineering Solutions Division, which includes the Automation and Controls business...
Emerson's Unidrive 600M boosts sugar delivery at Thai plant
Mitr Phol Sugar Corp is the largest sugar producer in Thailand today, the biggest in Asia and the world’s fourth largest, producing 2 million...
Honeywell’ Users Conference to highlight digital transformation for industrial controls
Turning Industrial Internet of Things (IIoT) concepts into reality for manufacturing enterprises will be a key topic at Honeywell Process...
Google for Industry: Taming Big Data
By Bert Baeck, TrendMiner
This article discusses multiple ways to both stay afloat and take advantage of the ocean of data that is flooding the...
Kepware's KEPServerEX helps HIROTEC enable IIoT connectivity
HIROTEC selected Kepware’s KEPServerEX connectivity software and the ThingWorx IoT Platform to enable company-wide device-to-cloud connectivity...
Emerson Industrial delivers motor control to oilfield cranes
A US-based specialist in the supply of complete electrical packages for oil rig cranes is using Control Techniques AC and DC drives as part of a...