The machine tool industry is witnessing a resurgence of sorts thanks to the shift to EVs and demand for more localized manufacturing, reports the Nikkei Asian Review.
In an interview with the Nikkei, Tongtai Machine & Tool’s chairman Yen Jui-hsiung said that the machine tool industry ought to capitalize on this change.
Tongtai is a key supplier of manufacturers serving BMW, General Motors, Stellantis and Mercedes-Benz. It is Taiwan’s biggest listed machine tool company by revenue.
“All machine tool makers need to redesign their entire portfolios of equipment tools and we have to do that faster,” contends Yen.
No doubt, this will see many conventional auto components disappearing in the transition from gasoline to electric cars, but it will also spike demand for an array of new parts and materials needed for EVs, notes Yen.
Machine tool makers have spent decades developing and building machines used to churn out components for gasoline engines and transmission systems – neither of which are needed in electric cars, reports the Nikkei.
Many view the EV shift as a threat to the industry, but Yen thinks otherwise: It could spur a wave of new demand for machines to produce motors and battery cases, as well as to process parts made from new, lighter materials designed to extend the driving range of EVs.
The machine tool market declined to about 20% in 2020 as the world battled the pandemic, but it has since then rebounded significantly.
Tongtai’s revenue for instance jumped 23.8% in 2021, with around 40% coming from automotive and transportation-related businesses, reports the Nikkei.
In addition to the EV push, Yen says Tongtai’s automotive clients are also looking to bring production onshore and closer to clusters of local automakers and markets.
These cost-effective, shorter supply chains could further help reduce disruptions of the kind seen over the past two years due to the pandemic.
“There was a point where almost all the automotive parts were made in China and then later shipped all over the world … but that era has changed,” notes Yen. “Now, even Chinese automotive parts makers are looking to expand overseas.”
Such changes have resulted in the emergence of new industrial clusters from Mexico and North Africa, to the Middle East and Central Asia.
Looking forward, Yen says that in order to thrive, machine tool makers must change their mindsets from simply providing standardized machine tools to working in tandem with the industry to offer more customized solutions.
Real automation isn’t only about automated machines and robots, says Yen. It should also be able to automatically and continually produce products that could pass quality controls.
Image and content: InWay-Pixabay/Nikkei Asian Review
