The European machine tool and automotive industries are currently navigating a complex landscape influenced by economic fluctuations, changing customer demands, and technological advancements. Key markets, such as Germany, Italy, and France, reveal various challenges and opportunities, as highlighted by recent data and industry reports.
In Germany, the German Machine Tool Builders’ Association (VDW) has reported a 16% decline in orders in the third quarter of 2024 compared to the third quarter of 2023. Domestic orders decreased by 17%, while international orders fell by 15%. Over the first nine months of 2024, the industry saw an overall decline of 23%. VDW points out that customer uncertainty, especially in the automotive sector, has significantly impacted investment decisions. Currently, segments like maintenance, automation, and services are performing better than new machine sales. The annual production forecast indicates an anticipated contraction of 8% for 2024.
In Italy, the Economic Studies Department and Business Culture Centre of UCIMU reports a 7.9% increase in the machine tool orders index for the third quarter of 2024 compared to the same quarter in 2023. International orders grew by 10.7%, while domestic orders increased by 4.3%. However, UCIMU cautions that this growth reflects a recovery from historically low levels in 2023. They also highlight a widening gap between the metal forming and metal cutting sectors, with the latter facing significant challenges due to competition from Asia and uncertainties in the automotive industry.
In France, the annual report by EVOLIS shows a 7.5% growth in the machine tool market value and a 1.5% increase in units sold for 2023. Exports rebounded by 16.1%, particularly benefiting from gains in Turkey, China, and Mexico, while imports from Germany, Japan, and Italy have also risen. The aerospace sector remains a key driver of growth in the machining segment, although revenue is expected to stabilize in 2024.
In the automotive industry, Ford's decision to reduce EV production in Cologne, Germany, reflects declining demand for certain models. In contrast, Hungary is emerging as a hub for EV manufacturing, attracting major investments from companies like BMW, Mercedes, and BYD.
A few recently announced projects and investment news items are listed below.
Aker Solutions has opened a new facility that spans 24,000 square meters and specializes in CNC machining, welding, assembly, and testing of hydropower components.
Kirby Group Engineering has launched a new off-site manufacturing facility in Portlaoise, Ireland, generating 50 new jobs. The plant will provide services such as pipe rack assembly, high-purity pipework in a dedicated cleanroom, and fabrication for industries including life sciences, data centers, and renewable energy.
BMW is investing $2.1 billion in a new facility in Debrecen, Hungary, which is set to begin operations in 2025. This plant will produce next-generation electric vehicles based on the Neue Klasse platform, with an annual production capacity of 150,000 vehicles. Nearby battery facilities from CATL and EVE will provide essential components for this large-scale operation.
Mercedes-Benz is investing $1.6 billion to expand its Kecskemet plant, which will become Hungary’s largest automotive facility. This project is expected to create up to 9,000 jobs and will significantly increase the plant’s electric vehicle production capacity, in line with the global shift toward sustainable mobility.
BYD is setting up its first European production plant in Szeged, Hungary, where it will manufacture fully electric and plug-in hybrid vehicles for the European market. The facility is expected to begin operations in late 2025, marking BYD’s strategic entry into the growing electric vehicle sector in Europe.
For more information, please contact Conchi Aranguren at caranguren@AMTonline.org.
