India promises very good growth prospects for German machine tool builders. The demand for high-quality, modern, productive and high-precision manufacturing technology is increasing in the country, says Dr. Markus Heering, Executive Director, VDW (German Machine Tool Builders’ Association), in conversation with Mr. Nishant Kashyap.
What are the most significant global trends you see in the machine tool industry, both from the technology and the market perspectives?
Three technological trends dominate — automation, digitalization with artificial intelligence included, and sustainability. One of the drivers is the shortage of skilled workers.
Automation and digitalization contribute to the optimal use of today’s complex machines. As part of digitalization, data analysis based on various standards is being used more and more frequently. With umati, the universal interface for machine technology, mechanical engineering is putting these standards into practice.
Economic development is currently being impacted by geopolitical, economic and structural factors. War, increasing bilateral trade conflicts and a high level of bureaucracy and regulation are unsettling the economy. Demand is weak in Europe, America and China. It is not expected to recover until next year, when inflation and interest rates have normalized. The structural change in the automotive industry towards electromobility is slowing down investment in the sector, particularly in Germany. Nevertheless, India and the Asean countries offer good growth prospects. Within the triad, the trend towards regionalization of production according to the motto local for local also has a positive effect in order to make supply chains more resilient.
How are emerging technologies like AI, automation, and additive manufacturing shaping the future of machine tools?
In my view, both are tools with opportunities and challenges. Additive manufacturing makes it possible to produce parts with complex geometries in manageable quantities. However, it will not be able to replace traditional machining. In fact, we plan to organize a special booth at EMO Hannover next year. There, you can learn about the close relationship between cutting technology and additive manufacturing. Artificial intelligence on the other side can support machine operators in production. However, the management of AI applications in production requires intelligent data for training. This is very complex. The productive use of AI therefore remains a challenge for the time being.
With sustainability being a key focus globally, how is the machine tool industry adapting to green manufacturing practices?
In view of the economic upheavals mentioned above, sustainability is taking a back seat in day-to-day business. In the medium term, however, waste avoidance and lower energy consumption will always have to be taken into account when making investments. Efforts to make machines and processes more efficient also reduce the CO2 footprint in manufacturing. It is also important to reduce CO2 emissions during the service life of a machine. This may involve using more energy during the machining process, e.g. to achieve tighter tolerances, but significantly lower CO2 emissions during operation, e.g. of aircraft engines. With higher energy prices, customers are increasingly demanding energy-efficient machines. Other levers for lower energy consumption can be found in the overall system of production, buildings, heating, waste processing, water recovery and much more. Companies are also working on this.
Can you give us an overview of the current market size of the global and German machine tool industries? How do you foresee the German market evolving over the next few years?
In 2023, the global machine tool market amounted to 82.3 billion euros. With production of 10.6 billion euros and a 12.9 percent share, Germany was in second place worldwide behind China. In terms of exports, German manufacturers ranked first ahead of China with 7.9 billion euros and a 17.6 percent share. We were the third-largest market behind China and the USA with 5.4 billion euros and a 6.6 percent share. In the current year, German machine tool consumption is declining by an estimated 13 percent. This is due to the pronounced weakness of the industry with high energy prices, major problems in the important automotive industry due to its dependence on China, and too much bureaucracy and regulation. The industry will not recover more strongly until 2026, when the global economy picks up and inflation and interest rates fall. The North American market as well as India and the Asean countries will provide support. Policy measures in Germany and the European Union should strengthen the industry’s competitiveness, such as reducing regulations, improving depreciation and promoting research and development.
How has the trade relationship between India and Germany in the machine tool sector developed over the recent years? What are the key areas of collaboration?
After the coronavirus crisis, trade relations in the machine tool industry between the two countries have developed very well. India now ranks eighth among the top export markets for German manufacturers. Last year, German exports to India increased by 28% to 248 million euros. This was higher than in 2018 before coronavirus. In 2024, they increased by a further 51% up to and including August. Demand was particularly strong for grinding machines, gear cutting machines, laser machines and machining centers. Important customer industries in India include the automotive industry, but also aerospace, medical technology, hydraulics, fittings and general metalworking
What is the perception of German machine tool builders regarding India as a market, particularly in terms of growth potential and technology adoption?
India promises very good growth prospects for German machine tool builders. The demand for high-quality, modern, productive and high-precision manufacturing technology is increasing in the country.
India is positioning itself as a global manufacturing destination. In your view, what steps should India take to strengthen its role in the global machine tool industry?
The industry should develop higher quality products and manufacture them sustainably. Looking at price alone will no longer be enough in the future. The focus should be on quality and the entire service life of production systems.
How can trade relations between India and Germany in the machine tool sector be enhanced further? Are there any specific initiatives or policies that could support this growth?
German manufacturers are expanding their activities in India. In some cases, they are modernizing existing production facilities or even setting up new factories. The VDW supports this development with joint trade fair appearances at Imtex Cutting and Imtex Forming as well as with symposia abroad.
What do you believe the future holds for the global machine tool industry? What challenges and opportunities do you foresee in the next decade?
The transformation process in the automotive industry will accompany our manufacturers for the next decades and will require a new strategy. Opportunities are opening up in the areas of environment, climate and energy, for example in the expansion of renewable energies, the development of a hydrogen economy, the manufacture of heat pumps, etc. The shortage of skilled workers is boosting demand for automation solutions. Digitalization, networking and artificial intelligence are also providing a boost.
How do you see the machine tool industry addressing the increasing demand for digitalization and connectivity on the store floor?
Companies are adapting, upgrading their own production, and supporting their customers in becoming more productive with the introduction of networked systems.
EMO is the world’s largest exhibition for machine tool technologies. How has EMO evolved over the years to reflect the changes in the industry? What key highlights can we expect from its upcoming edition?
EMO has stood for innovation since its first event in 1975. It anticipates technological trends, provides impetus and is a global leader when it comes to new products, manufacturing solutions and services. Most innovations were presented for the first time at an EMO show. For example, NC technology, the use of lasers, complete and high-speed machining, the use of linear and dry machining as well as the move towards energy-efficient machines, the digitalization of machines and digital networking in the factory, to name just a few examples, all started at an EMO. In 2025, we see automation, digitalization with artificial intelligence and sustainability as the focus of the exhibitors offering.
What role does EMO play in fostering collaboration and innovation in the global machine tool sector, particularly between countries like India and Germany?
Well, with more than 1,900 visitors, India was the second largest visitor group from outside Europe at EMO 2023, after China. This shows the demand of Indian customers for high-quality technology, which is offered in its entirety at EMO. The number of Indian exhibitors has doubled since the beginning in 1975 from 17 to 37 companies in 2023. This in turn shows the positive development of Indian machine tool production towards higher-quality technology. Manufacturers want to present themselves on the global market and use EMO as a platform to do so.
EMO 2025 promotes cooperation between India and Germany as well as the visibility of individual countries at the trade fair by allowing country pavilions for the first time. This is a good opportunity for a larger number of Indian suppliers, who would not come as individual exhibitors, to present themselves on the global market. We would be delighted if as many companies from your country as possible would take advantage of this offer.
