Market Research Report on

THE INDIAN METAL

FORMING

MACHINERY

INDUSTRYFebruary 2014

Indian Machine Tool Manufacturers' Association

Preface

2

Indian Machine Tool Manufacturers Association (IMTMA) is the apex body of machine tool industry in India . The association aims to enhance the competitiveness of Indian industry through its various initiatives on productivity, quality enhancement and technology exposures to Indian machine tool manufacturers and end-users.

As a part of various initiatives IMTMA has commissioned a market research to study the market and technology adoption levels in forming technology in Indian market.

In this regard, they have engaged BDB India Private Limited to carry out a Market Research Study to evaluate the market and technology adoption levels in metal forming technology in India for the products under the scope of the study.

The Study has transformed to a detailed report on market dynamics and technology trends in short , medium and long term for Indian market.

The market forecasting focused on market size estimation, product type wise demand assessment, end user segment wise share and preference, need gaps and pain areas .

BDB India Private Limited was set up 2 decades ago with the objective of providing world class management inputs to engineering businesses in India. Today, BDB offer business consulting including market research services to most market savvy organizations worldwide.

BDB has offered market research inputs for setting up new businesses and in expanding existing ones. BDB has assisted in identifying new opportunity areas and in evaluating their short, medium and long term commercial potential. BDB has developed business analysis expertise in industrial products, systems & consumables, consumer durables and medical equipment.

Continued

3

BDB also has a division (BDB QSAMM) that assists our customers to analyze and establish customer satisfaction indices.

BDB specializes in the following :

- Analysis for estimating the market size and potential

- Technology and emerging trends

- Competition analysis

- Distribution channel analysis

- Market entry strategies

- Partner identification

The study has been successfully completed and its output is being presented in the form of this report.

The findings of the study are presented in this report, and its contents are strictly confidential and meant for the exclusive use of IMTMA.

The statements and analyses in this report are based on the information and opinion obtained during field investigations and from various published sources.

Contents

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Page No

Preface

CHAPTER 1 PROJECT BACKGROUND 5

Objectives of the study 6Scope of the study 7

CHAPTER 2 EXECUTIVE SUMMARY 11

CHAPTER 3 CONCLUSIONS 36

CHAPTER 4 PRODUCT WISE ANALYSIS 43

Presses 44

Laser Cutting Machines 56

Plasma Cutting Machines 66

Shearing Machines 75

Press Brakes 83

Hot & Cold Forging Machines 92

Water Jet Cutting Machines 99

CHAPTER 5 TRENDS IN THE END USER SECTORS 101

Automotive 102

Auto components 108 General Engineering 116

Heavy Engineering 121

Forging 127

Aerospace & Defence 131Railways 137

Consumer Durables 142

Construction & Mining 147

APPENDIX

1. PROJECT BACKGROUND

- OBJECTIVES OF THE STUDY

- SCOPE OF THE STUDY

Objective of the study

6

aa Market size estimation for Metal forming machines and category wise forecast

of demand on short, medium and long term basis.

bb To report on sector wise demand for metal forming machines and trends

related to adoption of efficient technologies

cc To project the demand over the next 5 years based on the growth of the end

user sectors

dd To report on competitiveness of Indian Machine Tool Industry and recommend

key areas of improvement, end user perceptions on Indian suppliers and

technology gaps

ee To develop a detailed report to guide Indian machine tool manufacturers about

the road map of the industry and enable members to take informed decisions

Scope of the study

7

aa Product categories under focus

Metal Forming Machines

- Presses (Mechanical/Hydraulic/Servo), CNC Sheet Working including laser,

Water jet, Plasma, Shearing machines, Press Brakes, Cold & Hot Forging,

Hydroforming Machines

bb Geographical regions under focus

India

- Prominent manufacturers, end users and institutions & manufacturing clusters

relevant to the study have been contacted to understand their views and

perception on market

Products Covered under metal forming machines

8

Product Description Product Covered

Metal forming

Laser Cutting Machines

Plasma Cutting Machines

Water Jet Cutting Machines

Presses (Hydraulic and Mechanical)

Hot & Cold Forging

Shearing Machines

Press Brakes

Hydroforming technology has gained no popularity in the Indian market.

Electropnuematics and Hydraulics is the only company having capability to manufacture hydroforming

machines which are consumed by themselves

Study Methodology

9

The study was carried out with a multi pronged approach involving stakeholders like end

users, domestic manufacturers of machine tool, importers, component suppliers and

key industry bodies of the user industries

Analysis regarding the total market potential and the product wise trends were sourced

from the domestic manufacturers, importers and import export data. Where as

discussions with end users were carried out to understand types of machinery

used, source, technology trends prevailing and and the growth potential of the metal

forming machinery based on their growth trends. The end users provided the vital inputs

which led to analyzing their buying behavior

A detailed analysis of the customs data on imports was carried out to understand the

extent of machine tool imports into the country and sources for such procurement;

information pertaining to imports of new and used machines were separately analyzed to

arrive at meaningful inputs for the industry

A representative sample of stakeholders has been included in key demand and

manufacturing clusters covering companies from small, medium and large scale

categories.

Discussions with various stake holders were carried out through an intensive primary

research exercise involving personal meeting between BDB analysts and respondents

Market forecasting : Approach

10

Approach - Overview

Important factors that could cause actual

results to differ from our expectations

include, among others:

-- Changes in political and social conditions in

India;

-- Extraordinary changes in monetary & fiscal

policies of the Government of

India, inflations, foreign exchange

rates, unanticipated turbulence in interest

rates;

-- The performance of the financial markets in

India and globally;

-- Occurrence of natural disasters or calamities

affecting the economy

Assumptions :

Growth in metal forming machinery is proportional to the user industry growth

Absence of any major technological change in machining amongst the user industry

No major change in the value of the metal forming machinery currently used

Methodology :

Last 10 years historical data on metal forming machinery consumption, macro economic indicators and respective user sector growth has been mapped

The forecast for the macro economic indicators and user sector growth has been developed based on the economy and industry reports and discussions with end users

Correlation between macro economic indicators, end user sector growth and metal forming machinery consumption has been used to forecast the projected consumption of metal forming machinery

The results have been corroborated with manufacturers and component suppliers based on their judgment and experience

2. EXECUTIVE SUMMARY

Overview of Indian economy

12

8.6% 9.3%

6.2%5.0% 4.7%

11.3%9.7%

2.7%

1.0% 1.0%

FY 2010 FY 2011 FY 2012 FY 2013 FY 2014

India GDP Growth (%) Manufacturing GDP Growth (%)

152.9

165.5

170.3172.2

166.55%

8%

3%

1%

-3%

-4%

-2%

0%

2%

4%

6%

8%

10%

140.0

145.0

150.0

155.0

160.0

165.0

170.0

175.0

FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 (Apr - Nov)

Index of Industrial production (IIP) IIP Growth (%)

Source : Central Statistics Office, World Bank

Source : Department of Economic Affairs

The performance of the Indian economy over

the past two years especially the

manufacturing output has been

disappointing.

The recessionary pressure of 2012-13 have

severely impacted the industrial activity within

India.

The Index of industrial production has seen a

negative growth predominantly due to the

slowdown in the manufacturing sectors

A large current account deficit, high domestic

inflation and a fiscal stance that was widening

compounded the problems facing the

economy

Low growth and weak business confidence

feed into each other in a negative feedback