China Machine Tool Industry Implements Strategic Transformation Focuses on High-end Market

On October 20, Wu Bulin, executive vice president of the China Machine Tool & Tooling Industry Association, pointed out at the 5th executive meeting (expansion) meeting of the sixth session of the association that during the “11th Five-Year Plan” period, the machine tool industry in China has developed rapidly and has been on an overall scale. It is the first place in the world in production and consumption, but at the same time it should also see the problems that restrict the development of the industry. During the “12th Five-Year Plan” period, it is necessary to implement a strategic shift, focus on improving three capabilities, achieve three landmark goals, and focus on mid-to-high-end markets. Promote the industry from big to strong.

Lagging technology and expansion of scale into the bottleneck of industry development Wu Bolin pointed out that during the "11th Five-Year Plan" period, the rapid development of China's machine tool industry, the achievements are enormous, but the problems that restrict the development of the industry still exist, summed up in two aspects.

First, technological progress is lagging behind. The main driving factors for the rapid development of the industry in the past ten years are the continuing strong domestic market demand, the development momentum inspired by the reform of enterprise institutional mechanisms, and the strong support of national industrial policies. In comparison, technological progress and management upgrades play a relatively limited role. Deep-level technologies and industrialization technologies are not enough. The proportion of industrialization of high-level innovation results is not widely used. This can be seen from the import and export data. In 2010, China’s machine tool imports totaled US$9.24 billion, accounting for about one-third of the country's total consumption of machine tools, which are basically mid- to high-end products. At the same time, key equipment in the core manufacturing sector relies heavily on imports, and the high-end CNC systems and major functional components are more dependent on imports.

The second is that the development mode focuses on scale expansion. Due to the strong market demand and the scale orientation on the assessment, companies generally expanded their production capacity during the “11th Five-Year Plan” period. The phenomenon of large-scale, heavy-duty products, diversified varieties, and complete specifications is very common. Some companies that produce small general-purpose machine tools have also launched large-scale heavy-duty machine tools such as large-scale floor-standing boring and milling machines and gantry machining centers.

In terms of scale expansion, the company's production conditions and technological levels have indeed improved to varying degrees, but product technology upgrades have not been significant, and the problem of product structure similarity, excessive production capacity of low-grade large- and heavy-duty machine tools and other issues is quite serious. Therefore, as far as the industry as a whole is concerned, it still does not fundamentally free itself from the development model with scale expansion as the main feature. Although the industrial scale is large, the product structure is still at a low level, and it is still at the low end of the global industrial chain.

Implementing Strategic Changes to Achieve Three Significant Targets Wu Berlin believes that being large but not strong is a necessary stage for the development of the industry, and it is also closely related to the overall level of industrial development in China. Therefore, "big" is a great historical achievement, and "strong" is the goal to be pursued in the next step. China's machine tool industry has reached a critical turning point in major strategic changes.

According to the current status of the industry and the objective requirements for realizing the transformation of the industry from big to strong, the machine tool industry must strive to achieve three landmark goals during the “Twelfth Five-Year Plan” period:

The first is to make breakthroughs in providing equipment and services for key industries in the core manufacturing field. The manufacture of aerospace, marine, automobile and power generation equipment is a key industry in national economy and national defense security, and is also the most important service area in the machine tool industry. The core manufacturing fields of the above industries have high overall performance requirements for the required machine tools and equipment and are typical high-end market segments.

Second, the market share of medium-to-high-end CNC machine tools in the domestic market has increased significantly, and the share of medium-to-high-end CNC systems and functional components in the domestic market has increased significantly. The domestic market share of medium-to-high-end CNC machine tools, and the low market share of middle-to-high-end CNC systems and functional components in the domestic market are the concrete manifestations of the industry's major contradictions at this stage.

The third is to form a number of world-renowned brands and competitive companies. Having a number of world-renowned brands and advantageous companies is another important sign of a powerful machine tool manufacturing country, and it is also an inevitable requirement for the industry to change from a big change to a strong one.

Raising three capabilities and focusing on the mid-to-high-end market Wu Bing pointed out that in order to achieve the three landmark goals during the “12th Five-Year Plan” period, the machine tool industry must focus on improving the following three capabilities:

The first is to improve the market competitiveness of medium and high-grade CNC machine tools. The strength of product market competitiveness determines the market share. In the four elements of quality, price, service, and delivery time that limit product market competitiveness, the current major contradiction is quality. The key issue of quality problems is that deep-level technologies and industrialized technologies are not closed. Industry companies must adopt comprehensive measures to work hard on the market adaptability and quality reliability of products, work hard on the industrialization process, and work hard on the deep-seated technologies that restrict the market competitiveness of medium and high-end CNC machine tools, and effectively solve the problem of “likeness and appearance”. The "like" problem has made the comprehensive market competitiveness of domestically-made high-end CNC machine tools significantly improved.

The second is to improve the supporting capabilities of middle-to-high-end numerical control systems and functional components. It is necessary to fully mobilize resources and development enthusiasm of all sectors and adopt the principle of walking on two legs. While actively supporting the acceleration of development of specialized enterprises, it also encourages and supports qualified companies to extend their industrial chains according to their own needs and actively intervene in CNC systems. The development of functional component industries has accelerated the development of the mid-to-high-end numerical control systems and functional component industries.

The third is to improve the comprehensive service capabilities for the mid-to-high end market. Judging from the situation at the current stage, there are different degrees of heavy hardware, light software, heavy sales and light service tendencies in the industry enterprises, lack of in-depth research on user technology, and the lack of ability to provide users with comprehensive solutions. To occupy the mid-to-high-end market, it is necessary to provide comprehensive services to meet the individual needs of users, and be a good technologist.

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