The Development Trend of General Machinery and Equipment Manufacturing Industry
Market News

The Development Trend of General Machinery and Equipment Manufacturing Industry

In recent years, Taiwan’s "Mechanical transmission equipment industry", "Pumps, compressors, stopcock and valve industry", "Other general machinery and equipment industry" and other industries have increased their production indexes, mainly because of the active demand for smart automation equipment, which has driven the increase in overall output.
Published: Jul 16, 2021
The Development Trend of General Machinery and Equipment Manufacturing Industry

The general machinery and equipment manufacturing industry is defined as: “The manufacturing of equipment widely used in prime movers, fluid transmission equipment, pumps, compressors, stopcock, valve, mechanical transmission equipment, conveying machinery equipment, office machinery equipment, pollution prevention equipment, power hand tools, etc.,” The manufacturing of general machinery and equipment required for the operation processes are also included in the general machinery and equipment manufacturing industry.

  • Prime mover manufacturing industry: Any industry engaged in prime mover manufacturing
  • Fluid transmission equipment manufacturing industry: All industries engaged in fluid transmission equipment manufacturing
  • Pump, compressor, stopcock, and valve manufacturing industry: Any industry engaged in the manufacturing of pumps, compressors, stopcock, and valve
  • Mechanical transmission equipment manufacturing industry: Any industry engaged in the manufacturing of mechanical transmission devices and their parts
  • Conveying machinery and equipment manufacturing industry: Any industry that engages in the manufacturing of goods conveying and handling equipment
  • Business machinery and equipment manufacturing industry: Any industry engaged in the manufacturing of business machinery and equipment
  • Pollution prevention and control equipment manufacturing industry: Any industry engaged in the manufacturing of pollution prevention and control equipment
  • Power hand tool manufacturing industry: Any industry engaged in power hand tool manufacturing
  • Other general machinery and equipment manufacturing: Any industry that engages in the manufacturing of other general machinery and equipment

General machinery and equipment are products designed and developed for comprehensive mechanics, fluid flow, thermodynamics, electronics, mathematics, and material science. Due to their high versatility and wide range of uses, they are widely used in agriculture, industry, and other industries. They provide important support and a foundation for promoting industrial development.

The general machinery and equipment manufacturing industry is an important development axis of traditional industries. It has industrial characteristics such as a short product cycle, high capital intensity, high dependence on professional manpower, and large-scale workshops. The production process is processing and assembly in nature, and the products are diversified and have different fields. With high independence and professionalism, it is a discrete manufacturing industry. The industrial structure is dominated by small and medium enterprises and mostly export-oriented. The main export countries are China and the United States. Because the industrial chain is closely connected, it has a complete supply chain system of upper, middle, and downstream, forming an intricate network division of labor, which is an important industrial element in Taiwan.

In terms of the number of profit-making businesses, since 2015, the number of general machinery and equipment manufacturers in Taiwan has not changed significantly, remaining at just above 6,000. The sales of Taiwan's general machinery and equipment manufacturing industry has remained at around 300 billion yuan for the past five years, indicating that Taiwan’s domestic general machinery and equipment manufacturing industry and sales have been affected by the international market. Due to changes in trade conditions and exchange rate fluctuations in Japan, South Korea, and other countries, the overall industry performance is stable.

Taiwan’s general machinery and equipment manufacturing industry is mainly dominated by small and medium-sized enterprises. Coupled with the effect of industrial clustering, it has the advantages of high production flexibility, rapid response to market demand, and excellent processing expertise. However, due to the small scale of these enterprises, the limited investment in product innovation, research and development, channel expansion, and brand building has made the industry's international competitiveness limited. This which is a dilemma that the industry needs to overcome in the future.

In Taiwan's domestic demand market, low-price orders and vicious competition often occur in the same industry. In the past, many industrial players moved overseas to set up factories and develop, which became an obstacle to the domestic demand market. However, in the past two years, benefiting from the impact of the US-China trade war on the development of Taiwanese businessmen in China, some Taiwanese businessmen have successively returned to Taiwan to invest, which has driven the overall demand for general machinery and equipment manufacturing to increase and mobilized the domestic demand market.

In terms of international competition, export sales are the main source of income for the general machinery and equipment manufacturing industry. As the international economic and trade situation changes, the pressure of international competition is deepened, which has a significant impact on overall revenue. Facing countries such as China and South Korea competing for international orders with low prices, the revenue performance of the general machinery and equipment manufacturing industry has been challenged. Exchange rate fluctuations in various countries are also one of the factors that interfere with overall revenue performance. The exchange rate depreciation measures adopted by countries such as South Korea and other countries have made the Taiwan dollar stronger than other countries' currencies, thus eliminating the advantage of price competition and affecting the profitability of the industry.

Furthermore, Taiwan's general machinery and equipment are highly dependent on the Chinese market, which easily affects the profitability of Taiwan's general machinery and equipment. In 2015, China's red supply chain emerged. General machinery and equipment such as mechanical transmission equipment that had to be imported from abroad were transferred to China's local production and supplied to the Taiwan domestic market. This impacted Taiwan's overall export performance of general machinery and equipment. In the past two years, the US-China trade war has increased the demand for Taiwan manufacturing and equipment. The U.S.-China trade war and the U.S. tariffs imposed on China have promoted an international effect, benefiting Taiwan's general machinery and equipment manufacturing industry, thereby increasing overall industrial revenue.

The COVID-19 outbreak in 2020 caused many companies in China to stop work, weakening the demand for machinery and equipment in the Chinese market, and affecting Taiwan's general machinery and equipment exports. In recent years, the Taiwan government has vigorously promoted the new Southward Policy, and Taiwanese companies have successively deployed in Southeast Asia and South Asia markets such as Vietnam, Thailand, Indonesia, and India. The expanded factories and production lines will increase the demand for purchasing general machinery and equipment, which is expected to drive the overall growth momentum and reduce the risk of Taiwan’s long-term dependence on the market.

In addition, in response to the forthcoming of the Fourth Industrial Revolution, being intelligent is an important trend in the future of industrial development. All countries have drawn up relevant development strategies, such as Germany's development of "Industry 4.0", China's promotion of "Made in China 2025," and the Taiwan government’s "Smart Manufacturing." Various industries are gradually transforming towards smart factories and production lines. The general machinery and equipment manufacturing industry is the key to industrial upgrading. For example, mechanical transmission equipment and precision machinery are key components essential for operation.

Smart manufacturing is the developing trend of future industries. Taiwan’s general machinery and equipment manufacturing industry is also facing a period of industrial transformation. If it cannot keep up with the pace of global industrial upgrading and process optimization, it will soon lose its international competitiveness and greatly reduce its international gains. In order to continue expanding international exports, maintain stable growth momentum, and strengthen core competitiveness, industries will need to expand R&D capabilities and develop their human resources. However, Taiwan’s general machinery and equipment companies are mostly small and medium-sized, and product innovation R&D, high-end Resources such as manpower, and brand marketing are generally insufficient. The government currently promotes industry through subsidies or tax reductions, encouraging small and medium-sized enterprises to develop high-value-added innovative products and fill the gap in high-level manpower to facilitate future industrial transformation and upgrading.

In the face of fierce industrial competition and drastic changes in the international market, to avoid losing advantages in the torrent of industrial competition, government resources can be allocated to enrich R&D innovation and talent cultivation.  This will inject new business capabilities into the company, leading to expanded domestic and global markets and enhanced international competitiveness.

Published: Jul 16, 2021 Source :twtrend

  • Asia / Pacific
  • Smart Transformation
  • Machinery Export
  • General Machinery

Further reading

You might also be interested in ...

Headline
Market News
The United States is committed to the development of advanced manufacturing
Since Germany called out "Industry 4.0", related issues have quickly fermented around the world. The US government immediately put forward the "Advanced Manufacturing Partnership Program (AMP)", focusing on emerging technologies that can be quickly commercialized, and sharing government R&D facilities to promote industry One-stop collaborative research and development capabilities to reduce commercialization risks.
Headline
Market News
Global Hand Tools Market Development
Today’s feature-rich hand tools enable electricians to work more efficiently, comfortably, and safely, thereby increasing productivity, improving work quality, and reducing fatigue and wear
Headline
Market News
Global Glass Market Analysis and Forecast
The surge in the production of smartphones, the increasing penetration of artificial intelligence (AI) in commercial and consumer applications, and the decline in the price of consumer electronic devices are some of the main factors that may drive market growth.
Headline
Market News
Global Construction Industry Trends
The prospects of the global construction industry are promising. The main driving forces of market growth are urbanization and population growth, housing starts, and increasing infrastructure.
Headline
Market News
The Current Development of the Turkish Machine Tool Market
Geographically, Turkey is a natural land bridge located on the east-west axis and the north-south axis. It connects European, Middle Eastern, African, and Central Asian markets, giving it great geographical and economic advantages. Holding this key global position, its central location creates an efficient and cost-effective export hinterland and market for major trading partners.
Headline
Market News
Global Semiconductor Market Pattern
According to forecasts, the compound annual growth rate of the semiconductor industry from 2021 to 2026 will exceed 6%. With the increase in investment in storage devices and semiconductor components, the technological advancement of the entire semiconductor industry is also constantly evolving. The emergence of the Internet of Things and artificial intelligence (AI), as well as the proliferation of complex electronic products, are driving high-end applications in the consumer electronics and automotive industries, increasing the adoption rate of semiconductor manufacturing to meet growing demand.
Headline
Market News
The Water Hardware Industry Expands Demand for Smart Technology
Water hardware is an indispensable part of life. From the showerhead of the bathroom to the faucet of the kitchen, it is connected to the flow of water. For the water and hardware industry, the United States is the world's largest importer of water hardware and also exports to the global water and hardware industry. The deepest impact in recent years has come from the rapid development of water hardware products in China and other developing countries. With its continuous expansion of product exports and market share, China is replacing countries such as Europe, America, and Japan, and has become an important production base and product sales market for water hardware.
Headline
Market News
The Development Trend of Optical Instrument and Equipment Manufacturing Industry
The optical industry is still the mainstream product sector in consumer electronics this year, and there is still a lot of room for innovation. Since smartphones are equipped with lenses, from the rear to the front, and from single-lens to multi-lens, hardware innovation not only facilitates consumers to take photos and videos but also directly drives the vigorous development of the optical industry.
Headline
Market News
The Development Trend of Optoelectronic Materials and Component Manufacturing
The optoelectronic material and component manufacturing industry is a branch of the electronic component manufacturing industry. It is a high-tech and capital-intensive industry. Components manufactured with optoelectronic technology or equipment with optoelectronic components as key components are all part of the optoelectronics industry.
Headline
Market News
Epidemic Drives the Development of Demand Medicine and Medical Market
Due to the increase in demand for epidemic related drugs, screening reagents, and other products driven by the epidemic, the output value of drugs, medical supplies and other related products has increased.
Headline
Market News
Development Trends of Garment and Apparel Manufacturing Industry
The textile industry was a leading sector in Taiwan's early industrialization stage. The growth and achievements of the textile industry also led to the development of other industrial sectors. The garment and apparel product manufacturing industries are downstream industries in the textile industry chain. Its upstream includes fiber manufacturing, chemical additives, spinning, weaving, dyeing and finishing, and other industries. The garment and apparel product manufacturing industry are the processing stage in the industry chain. It is also an important industry that gives added value to textiles.
Headline
Market News
China's Bearing Industry Development and Global Bearing Market Analysis
A bearing is an important part of contemporary mechanical equipment. Its main function is to support the mechanical rotating body, reduce the friction coefficient during its movement, and ensure its rotation accuracy. Therefore, its application range is very wide and the market demand is strong. The Asian region represented by China and Japan has accounted for more than half of the global bearing consumption and has become the world's largest bearing consumer market, followed closely by Europe and North America, with 25% and 20% respectively.
Agree