The current situation is worrying; the machine tool industry needs to actively respond to the new landscape.

Based on the data, the demand for China's machine tool products objectively exists, but domestic machine tool enterprises are unable to fully meet it; if import and export could be balanced, China's machine tool industry could have increased its sales by USD 13.4 billion last year, equivalent to nearly RMB 100 billion. If China's machine tool industry can transform its excess mid-to-low-end production capacity into 'high-end' capacity that meets user needs, especially by focusing on basic products such as functional components and CNC systems and narrowing the gap, then the competitiveness of China's machine tool industry will significantly improve, and the international status of China's machine tool industry will surely rise further.

Relevant data shows that from January to February 2012, China produced 111,000 metal-cutting machine tools, a year-on-year decrease of 11.90%; and 23,000 CNC machine tools, a year-on-year decrease of 20.70%, with the industry in a downturn. In the first quarter of 2012, the continued decline in new orders became a common phenomenon for many machine tool enterprises, and the industry did not seem to have emerged from the sequential decline trend since the second half of 2011. Wu Bailin, Executive Vice President of the China Machine Tool & Tool Builders' Association, also pointed out in a recent interview that in addition to some favorable factors at the policy level in 2012, the industry also faced unfavorable factors: "Overall market demand is not optimistic, and the situation for mid-to-low-end products is even more severe. At the same time, international well-known enterprises are accelerating their layout in China, and competition in the mid-to-high-end product market is becoming fiercer." The decline in market demand and changes in demand structure have brought a very severe situation to the machine tool industry, and facing the arduous task of the industry's strategic transformation from "big to strong" during the 12th Five-Year Plan, the current complex situation indeed makes many enterprises dare not take it lightly.

Import-export deficit draws attention again

"In 2011, China's machine tool industry imported USD 20.7 billion and exported USD 7.3 billion, with an import-export deficit of USD 13.4 billion." Compared to the industrial output value of RMB 660.65 billion and a growth rate of 32.1%, the huge import-export deficit in the machine tool industry seems to have attracted more attention from Cai Weici, Executive Vice President of the China Machinery Industry Federation. "Last year, the average export price of China's CNC machine tools was only USD 33,000 per unit, while the average import price was USD 219,000 per unit, with the export price only 15% of the import price."

Relevant data shows that in 2011, the import value of machine tool products increased by 29.3% compared to 2010. Among them, the import of metalworking machine tools was USD 13.24 billion, an increase of 40.6% over the previous year, far exceeding the growth rate of domestic metalworking machine tool output value of 26%. The domestic market share of domestically produced metalworking machine tools decreased by about one percentage point compared to the previous year.

Cai Weici said, "Based on the data, the demand for China's machine tool products objectively exists, but domestic machine tool enterprises are unable to fully meet it; if import and export could be balanced, China's machine tool industry could have increased its sales by USD 13.4 billion last year, equivalent to nearly RMB 100 billion. If China's machine tool industry can transform its excess mid-to-low-end production capacity into 'high-end' capacity that meets user needs, especially by focusing on basic products such as functional components and CNC systems and narrowing the gap, then the competitiveness of China's machine tool industry will significantly improve, and the international status of China's machine tool industry will surely rise further."

Obviously, in terms of demand structure, the market demand for mid-to-high-end CNC machine tools remains strong, and domestic production is far from sufficient. In particular, the reliance on foreign high-end machine tools is still very high, while the market demand for mid-to-low-end machine tools has significantly decreased. Wu Bailin believes that "the strong import growth is partly due to the accelerated transformation and upgrading of the national economic structure, and the rapid improvement in the demand level for machine tool products in the domestic market; on the other hand, it is because technological innovation and product structure adjustment in the machine tool industry cannot keep pace with the upgrading of market demand levels." Since the second half of 2011, key enterprises in the industry have generally reported that demand for high-end products and specialized machines remains relatively strong, while market demand for ordinary products has significantly declined. This change has resulted in a decrease in orders for many enterprises in the industry, an increase in inventory and work-in-progress, and tightened capital turnover. In terms of manufacturing capacity, there is a shortage of high-end products and specialized machines, while there is an excess of ordinary products.

Changes in demand structure have also directly affected the profit structure of enterprises, as highlighted in the annual report recently released by Kunming Machine Tool: the company's machine tool business generated revenue of RMB 1.548 billion, a year-on-year increase of 14.21%. "However, due to the sharp contraction in market demand in the second half of the year, changes in product demand structure led to a relative increase in sales of low-margin digital display horizontal boring machine series products, with the gross profit margin declining by 2.91 percentage points to 25.77%; gross profit was RMB 399 million, only a slight increase of 2.62%." The annual report also pointed out that "in the fourth quarter, due to slowing market demand, reduced orders, and customers postponing deliveries, inventory increased significantly, increasing capital operating costs. New orders for CNC machine tools in the fourth quarter were only around RMB 42 million." Dual-spindle machining center.