The machine tool industry, considered the mother of all industries, is facing a two-way competition from global companies in China, Germany and the US.
While the industry is facing a severe competition from Chinese companies in the delivery of general purpose machines (GPMs), it is still finding it difficult to compete with German and US companies in the area of high-precision, high-technology machines.
T K Ramesh, vice president, Ace Micromatic Group, said: “What we are noticing is that there is growing Chinese participation in the delivery of standard general purpose machine tools like lathes, drilling machines, ram pipe milling machines. Chinese firms are scoring on price and logistics front. They can deliver these machines both at lesser prices and in lesser time compared to Indian firms.”
Chinese firms are delivering GPMs some 25-50 per cent cheaper than Indian machines. Mysore Kirloskar and HMT are the leading Indian companies in this area.
However, he feels Indian firms are much ahead in the delivery of high technology machines like CNC (computer numeric-controlled) machines, machining centres and turning centres. In this product segment Ace Micromatic Group, BFW (Bharat Fritz Werner) and Jyothi CNC Automation are the leading Indian players.
According to Indian Machine Tool Manufacturers’ Association (IMTMA), the country is facing severe competition from Germany and the US in the high-precision tools sector. German companies, which are traditionally known for their high-quality technology products are still ruling the Indian market.
“The Indian manufacturing sector is not worried about the high prices for German machines, but they want high quality products. Price is no barrier any more for the Indian companies.
They are still dependent largely on the imports from Germany and the US. The share of Indian machine tool industry in the overall domestic consumption of CNC machines is getting reduced,” IMTMA sources said.
During the year 2006-07, India imported Rs 4,655 crore worth of machine tools, a growth of 60.6 per cent over the previous year. While the domestic production went up by just about 27.6 per cent to Rs 1,648 crore during the year. The figures for 2007-08 are yet to be worked out.
For year-ending March 31, 2008, the domestic consumption of machine tools went up by 18.76 per cent to Rs 7,500 crore compared to the previous year.
About 89 per cent of the overall industry output constituted metal cutting, while 80 per cent of the total turnover came from CNC machines.
The significant achievement for the industry in 2007 was that it was ranked the 10th largest machine tool market globally from 12th rank in 2006 and 16th rank in 2004. The growth in demand came from automobile, auto ancillary and other manufacturing sectors. The IMTMA has forecast a compounded annual growth rate of 25-30 per cent over the next five years.
In order to achieve the industry's new goal: “German quality machines at Chinese prices” the Indian machine tool companies are in the process of equipping themselves with latest technology.
The IMTMA has taken upon itself the task of enhancing the technology level and is actively scouting for domestic and overseas universities and institutions doing cutting edge work in this area to partner.
