Germany perceives India as a dynamic market for machine tools, especially in the backdrop of growth in the domestic automobile and mechanical engineering sectors, says a visiting official of the German machine tool makers' body.
German machine tool exports to India have been growing at double digit figure since 2002. Moreover, German exports saw an increase of 23 percent in the first half of 2007 compared to the same period last year, Chairman of VDW, the German Machine Tool Builders' Association, Carl Martin Welcker said on Thursday.
"The positive trend is continuing and incoming orders for the first half of the current year have risen by a significant 99 per cent over the figures for the same period last year," he said during a symposium on the Machine Tools and Manufacturing Systems in the city.
In 2006, machine tools exports to India totalled 193.7 million euros, with the share of metal cutting machine tools at around 71 percent. In 2006, India ranked 11th in the global ranking list of our most important export nations and after six months of 2007, it had moved to 10th position, he said.
The exports comprised mainly machining centres, grinding, honing, lapping machines, gear cutting machines, lathes and milling machines, presses and other metal forming machine tools, he said.
The machine tool consumption in India last year was more than three times as high as domestic production. Though India's own machine tool industry is expanding, the demand for is to a large degree catered for by imports, with Japan and Germany being the dominant suppliers, he said.
The sector in India has also witnessed some growth. Germany over the past four years imported machines tools from India to a value between 3.52 and 5.82 million euros annually, said Carl.
"The imports of tools from India have been more on the low-end segment." India is filling the niche in this segment with several dominant German players not venturing into it due to lower profit margins, he said.
However, he did not view India as a potential competitor in the high-end segment as far as machine tools are concerned.
Though Japan is a close competitor, Germany differentiated itself by leveraging on its strength of producing customised solutions and working on innovations.
Japan's strength lay in providing standardised solutions, which were more for mass consumption, he said.
Replying to a query that several Indians found the cost factor of German tools highly formidable, he said the prices were in keeping with the standards. Cheap products often did not provide long lasting service that these products provided.
