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The European machine tool industry could be at risk as de-industrialisation may wipe out innovative capacity, it has been warned.

According to CECIMO, The European Association of the Machine Tool Industries, the share of European machine tool production has been falling over the last decades. Markets have shifted to Asia.

Its report, entitled Study on the Competitiveness of the European Machine Tool Industry, was launched at a roundtable meeting at the European parliament to bring together MEPs and people from the industry.

The research gives a comprehensive view of the European machine tool industry and raises many issues.

“Driven by the rise of China, Asia has become truly ‘the factory of the world’ over the past decade. Today, Asia consumes more 66% of the world’s machine tool production and China alone absorbs 50% of this. The share of European consumption in world consumption has dropped from 40% to one fifth over the last decade, the share which was obviously lost to Asia” explains Michael Hauser, vice-president of CECIMO.

Emerging countries are increasingly investing in systems provided largely by the European industry to build up their own manufacturing capabilities. This is good news for exports of machine tools and related equipment, but means that customers relocate outside Europe, and businesses must try to follow them.

Following the customer base is important if machine tool companies are to embark on joint innovation projects and set up effective sales and distribution channels, the report states.

However, SMEs, which make up more than 80% of Europe’s machine tool companies, lack the resources to expand internationally and cannot cope with the risks of unpredictable new markets.

Furthermore, in developing markets the playing field can be distorted by political practices, legislation and innovation policies. In many cases already the supply of European imports is restricted as soon as a country can supply the technology domestically.

CECIMO states that Europe must maintain the manufacturing expertise from the machine tool industry by keeping manufacturing in Europe.