Global Machine Tools Market - Focused Insights 2024-2029

MARKET INSIGHTS

The global machine tools market based on consumption was valued at USD 127.39 billion in 2023 and is expected to reach USD 171.37 billion by 2029, growing at a CAGR of 5.07% during the forecast period. The rise of electronics and their applications in manufacturing have significantly impacted the machine tools industry. The integration of semiconductors and microelectronics has broadened the capabilities of many vendors, leading to higher levels of automation in both metal forming and metal cutting segments. Industries requiring high precision have been early adopters of technology-based machine tools. The demand for high precision, mass production, and automation with minimal human intervention has surged across all sectors and geographies. The pandemic has accelerated this need for automation, as companies seek to minimize the number of workers present on factory floors. This trend is expected to drive significant sales growth in the machine tools market.

The global machine tools market based on production was valued at USD 134.96 billion in 2023 and is expected to reach USD 169.47 billion by 2029, growing at a CAGR of 3.87% during the forecast period. Furthermore, a geographical analysis indicates that demand for machine tools is driven by both new installations and replacements. In established markets like Europe and North America, there is a high demand for replacement tools. Emerging markets in regions such as APAC, the Middle East and Africa, and Latin America exhibit strong demand for new installations, prompting vendors to develop targeted installation plans.

RECENT VENDOR ACTIVITIES

1. On September 6, 2023, DMG MORI announced the acquisition of KURAKI, owned by Kurabo Industries. By integrating KURAKI’s innovative development and production techniques, DMG MORI aims to enhance its product offerings and expand its customer base.
2. On January 29, 2024, ModuleWorks, a leading software provider for the CAD/CAM industry, announced a partnership with DN Solutions, a prominent CNC machine tool manufacturer. The partnership will focus on the joint development of machine tool software and the creation of integrated solutions to facilitate the digital transformation of the manufacturing sector.
3. On April 3, 2023, Okuma Corporation, a global leader in the design and manufacture of CNC machine tools, announced the launch of a new business segment Okuma Factory Automation Division. The initiative responds to growing demand from manufacturers for automated machining systems and cells to tackle labor shortages and enhance production capacity. It will operate from the company’s headquarters in Charlotte, North Carolina.

KEY TAKEAWAYS

1. Market Consumption Growth: The global machine tools market based on consumption was valued at USD 127.39 billion in 2023 and is expected to reach USD 171.37 billion by 2029, growing at a CAGR of 5.07% during the forecast period.
2. Market Production Growth: The global machine tools market based on production was valued at USD 134.96 billion in 2023 and is expected to reach USD 169.47 billion by 2029, growing at a CAGR of 3.87% during the forecast period.
3. By Tool Type: The metal cutting segment holds the largest market share, the growth is driven by its critical role in shaping metal by precisely cutting it into the desired shapes and sizes.
4. By Technology: Computer Numerical Control (CNC) shows the highest growth due to its highly advanced capability of executing both design and manufacturing processes with full automation.
5. By End-user: The automotive segment holds the largest market share, growth is driven by the rise in EV production.
6. By Geography: The APAC region dominates the global machine tools market with over 46% share, driven by the resumption of economic and infrastructural activities.
7. Growth factor: The global machine tools market is set to grow due to the rise in industrialization in emerging economies and growth in the automotive sector.

MARKET TRENDS & DRIVERS

Surge in Automation

The surge in automation, driven by technologies like IoT and AI, is transforming the machine tools market at an unprecedented rate. This trend is not only revolutionizing traditional manufacturing processes but is also shaping the future of the industry. IoT enables machine tools to be interconnected, allowing for seamless communication between machines and systems on the shop floor. IoT sensors embedded in machines collect real-time data on operations, performance, and condition, enabling predictive maintenance and minimizing downtime. IoT-enabled machine tools can communicate and synchronize with other systems (like ERP, PLM, MES) for end-to-end visibility of production, improving decision-making and reducing human intervention. AI, combined with machine learning algorithms, helps machine tools become smart by learning from data and optimizing processes autonomously. Automation is seen as a key driver for improving operational efficiency. With AI and IoT, machine tools can operate faster and with greater precision, minimizing human errors. Automation reduces cycle times, optimizes tool paths, and ensures consistent quality, which is critical in industries like aerospace, automotive, and electronics. Governments and industry players are investing heavily in smart factories. The adoption of IoT, AI, and robotics is a crucial part of these initiatives, and machine tools are a key component in this transformation.

Industry 4.0 or 5.0 Revolution

The rise of Industry 4.0 and Industry 5.0 has significantly reshaped the landscape of the machine tools market, driving growth, innovation, and transformation. Both industrial revolutions introduce advanced technologies and new manufacturing philosophies that enhance efficiency, flexibility, and precision in machine tools while fostering closer collaboration between machines, systems, and, in the case of Industry 5.0, humans. Machine tools in an Industry 4.0 setup are equipped with sensors, IoT devices, and advanced software that allow them to connect to a larger digital ecosystem. This connectivity enables machine tools to collect, analyze, and communicate data in real time. Machine tools in an Industry 4.0 setup are equipped with sensors, IoT devices, and advanced software that allow them to connect to a larger digital ecosystem. This connectivity enables machine tools to collect, analyze, and communicate data in real time. Industry 5.0 aims to achieve sustainable production by minimizing waste and energy consumption. Machine tools are being redesigned to be more environmentally friendly. New machine tools are incorporating energy-saving technologies, reducing power consumption during machining processes. This trend is further fueled by regulatory pressures and consumer demand for sustainable products.

Growth in Automotive Sector

The rapid growth in developing economies has significantly contributed to the expansion of the global automotive sector. As demand for vehicles rises in emerging markets, manufacturers are presented with substantial opportunities to capitalize on this growth. Emerging markets have witnessed robust industrialization and increasing foreign trade activities, particularly within the BRICS nations (Brazil, Russia, India, China, and South Africa). China's significant fiscal stimulus programs have positioned it as a leader among emerging economies in recent years. As automotive production scales up to meet rising demand in emerging economies, the need for precision machining and high-quality components grows as well. Machine tools such as CNC machines, lathes, and grinders are essential for the mass production of critical automotive parts like engines, gearboxes, and chassis components. In particular, the trend toward electric vehicles (EVs) has accelerated the demand for advanced machine tools, as EV production often requires new, complex machining capabilities. The shift toward lightweight materials in vehicle manufacturing, such as aluminum, carbon fiber, and composites, has created a demand for specialized machine tools capable of handling these materials with precision.

INDUSTRY RESTRAINTS

Increasing Labor and Machinery Cost

The increasing labor and machinery costs represent a significant challenge in the global machine tools market, hampering its growth in several ways. As manufacturers strive to maintain competitiveness, rising costs in both labor and machinery lead to higher operational expenses, which can slow down the adoption of new technologies and reduce profit margins. Labor costs are increasing in many regions due to factors such as higher wages, inflation, and a shortage of skilled labor. The machine tools industry, which requires highly skilled operators, technicians, and engineers, faces a particular challenge in finding workers with the expertise to manage advanced equipment like CNC machines, robotics, and automation systems. Machine tools, especially advanced CNC machines, 5-axis machines, and multi-tasking machines, require substantial capital investment. As the demand for precision and automation increases, the cost of these high-end machines rises as well. Advanced machine tools, particularly those equipped with automation and robotics, require regular maintenance and software updates to remain efficient and accurate. These operational costs can become prohibitive, particularly for smaller companies that cannot easily absorb these expenses. Thus, the increasing labor and machinery costs pose a significant challenge to the growth of the global machine tools market.

SEGMENTATION INSIGHTS

INSIGHTS BY TOOL TYPE

The global machine tools market by tool type is segmented into metal cutting (machining center, lathe, grinding & polishing, laser, EDMS, & other tools), metal forming (bending & forming, pressing, punching & shearing, others). The metal-cutting segment accounted for the largest market share. These tools are vital for a variety of machines that perform distinct functions, from basic cutting to intricate shaping. As a result, the metal-cutting tools market is characterized by continuous technological advancements, with numerous companies competing for a larger share in this highly competitive industry. The demand for metal cutting tools remains strong across various industries, including automotive, aerospace, construction, and electronics, due to their ability to handle complex tasks with high precision. Based on the metal cutting, the laser, EDMS, & other tools market shows the highest growth during the forecast period. Electrical Discharge Machines (EDMs) and other advanced cutting tools are integral to modern manufacturing, utilizing innovative technologies such as Electro-Discharge Machining (EDM), Electro-Chemical Machining (ECM), Ultrasonic Machining, and Laser Machining. As manufacturing activities resumed and businesses adapted to new norms after the pandemic, the demand for EDM, laser machining, and other modern cutting tools started to rebound. This trend suggests a favorable outlook for the market in the coming years, with opportunities for vendors to capitalize on the pent-up demand and the increasing focus on advanced, precision-driven manufacturing solutions.

INSIGHTS BY TECHNOLOGY

The global machine tools market by technology is categorized into CNC and non-CNC. The Computer Numerical Control (CNC) shows significant growth, with the fastest-growing CAGR of 5.67% during the forecast period. CNC (Computer Numerical Control) technology has emerged as a pivotal force in modern manufacturing, gaining widespread popularity across the globe. As industries shift towards automation, CNC machines are becoming increasingly integral to various sectors. These modern CNC systems are highly advanced and capable of executing both design and manufacturing processes with full automation. With the advent of Industry 4.0 and the development of smart factories, manufacturers are prioritizing the adoption of CNC machine tools to streamline operations and enhance efficiency, thus helping segmental growth.

INSIGHTS BY END-USER

Based on the end-user, the automotive segment holds the largest market share of the global machine tools market. The automotive industry is the largest end-user segment of the machine tools market. Before the COVID-19 outbreak, the global electric vehicle (EV) market was expanding at a rate of 60% annually. This growth, along with increased production facilities, was expected to drive additional demand for machine tools as factories ramped up production. The rise in EV production was particularly notable in countries such as China, Japan, the U.S., and Western Europe, where manufacturing had been accelerating in recent years. The automotive industry remains one of the largest contributors to global economic growth and continues to expand across most regions. Emerging nations account for the maximum share of global automotive production, with many manufacturers eager to restart operations. Consequently, the demand for machine tools from the automotive sector is expected to be driven primarily by developing countries.

GEOGRAPHICAL ANALYSIS

APAC region dominates the global machine tools market with over 46% share. The machine tools market in the APAC region is expected to witness significant growth, driven by the resumption of economic and infrastructural activities following the COVID-19 pandemic. APAC is recognized as a global economic hub, contributing significantly to the world's GDP. Countries like China, India, Japan, South Korea, and Australia are major players, with China alone accounting for a substantial portion of global manufacturing output. China is the world’s largest manufacturing economy, producing everything from consumer electronics to automobiles and heavy machinery. Many APAC countries are experiencing rapid urbanization and industrial development, leading to increasing demand for infrastructure, machinery, and equipment. This has a direct impact on the demand for machine tools and other manufacturing technologies.

COMPETITIVE LANDSCAPE

The global machine tools market report consists of exclusive data on 25 vendors. The competitive landscape of the global machine tools market is fragmented characterized by the presence of several major players, as well as numerous regional and local manufacturers. In terms of market share, a few of the major players are currently dominating the market. Some companies that are currently dominating the market are DN Solutions, AMADA Group, Makino, and JTEKT Corporation. Key strategies include product innovation, mergers and acquisitions, and partnerships to enhance market presence and expand geographical reach. Collaborations with OEMs and other industry stakeholders to develop integrated solutions and improve market reach.