How does the machine tool industry survive the strategic trap of development?

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**Abstract** Introduction: Over the past decade, China's machine tool industry has surged to the top in terms of output value, achieving significant progress in product structure and enhancing its international competitiveness. However, the so-called "golden decade" for the industry is now coming to an end, and the sector is facing numerous challenges. Intense price competition, a deteriorating low-end market environment, and external pressures are forcing the industry to rethink its direction. The need for transformation and upgrading has never been more urgent, as the industry seeks a sustainable path forward. In the past ten years, China’s machine tool industry has made remarkable progress. During the “Eleventh Five-Year Plan” period, despite the impact of the global financial crisis, the industry continued to grow rapidly, particularly in the field of CNC machines. However, the sector is still grappling with several issues, especially in the low-end market where too many manufacturers compete with low-quality products, leading to fierce price wars. This has created a challenging environment that demands immediate innovation and restructuring to ensure long-term development. Xu Zhengshun, General Manager of Siemens CNC System, highlights that while the scale of China’s machine tool industry has expanded significantly, the core issue remains the imbalance between high and low production capacity. The industry urgently needs to modernize and upgrade to address these imbalances. According to Xu, there are three main reasons behind this situation: First, some enterprises focus on unreasonable cost-cutting, which leads to destructive price competition, reduced profits, and limited resources for future development. Second, the manufacturing process is often overly standardized, resulting in poor adaptability to different production needs. Third, the widespread use of non-open CNC systems has hindered secondary development, making it difficult for companies to innovate or improve their designs over time. Mr. Xu believes that the current challenges faced by China’s manufacturing industry represent a strategic trap in the development of the machine tool sector. A directional problem exists, and it needs careful consideration. Why is it a trap? After years of rapid growth, the industry has expanded in size, but brand awareness has not kept pace. Many companies have been forced into the low-end market, where they face unreasonable pricing and performance demands. They mistakenly believe that meeting these demands is their responsibility, yet they fail to guide the market effectively. The guiding role of enterprises in shaping the market is crucial for long-term sustainability. From the perspective of market demand, China’s manufacturing industry is growing rapidly. Are our processing requirements improving or decreasing? The answer is clearly improving. Currently, over 60% of China’s machine tool consumption comes from imported or joint-venture products, leaving domestic companies largely at the lower end. Chinese users have high expectations, but few domestic companies can meet them. This is the core challenge the industry faces today. To break this cycle, the industry must find a breakthrough point. How can machine tool enterprises transform and upgrade? First, strengthening the basic manufacturing management system is essential. This includes improving quality control and establishing a more comprehensive and independent quality monitoring system. For example, in standard turning and milling operations, there are no technical barriers—what matters is doing the basics better. By focusing on quality improvement, the industry can take a major step forward. Second, the core of industrial upgrading lies in intelligent manufacturing. Intelligent manufacturing involves more than just direct processing—it emphasizes adaptability across different industries, product types, and processing requirements. It includes features such as system equipment integration, production and maintenance management, customization, networked processing, communication capabilities, and even cybersecurity functions. These elements are essential for intelligent manufacturing, and they all require an open system. Only with an open system can users integrate the latest ideas and innovations into machine tool design and manufacturing. A simple and convenient system may be user-friendly, but it lacks the flexibility and potential for future development. Open CNC systems allow for greater customization and long-term adaptability, which is critical for the future of the industry.

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