Machine Tool Industry: Moving Toward High-End and Globalization in Steady Recovery
Dual Recovery in Revenue and Profits, with Notable Structural Optimization • Revenue: From January to October 2025, the industry’s total revenue reached 851.1 billion yuan, a year-on-year increase of 1.5%. Among this, the metal-cutting machine tool sub-sector saw a year-on-year revenue growth of 10.8%, while metal-forming machine tools grew by 7.5%, significantly exceeding the industry average and reflecting the increasing demand pull from high-end segments. • Profit Improvement: In the first three quarters, the industry’s total profit grew by 28.0% year-on-year, with the profit margin rising to 3.2% (an increase of 0.7 percentage points year-on-year), primarily driven by a higher proportion of high-end products and improved cost control. • Orders and Production: From January to October, new orders for metalworking machine tools grew by 7.3% year-on-year, while backlog orders increased by 4.3%. The production of metal-cutting machine tools reached 715,000 units (+14.8%), with output value growth surpassing production volume growth, indicating an increase in the value per unit. Optimized Import-Export Structure and Enhanced Export Competitiveness • From January to October, total import-export volume reached 27.42billion(+5.718.94 billion (+7.7%), further expanding the trade surplus. Exports of metal-forming machine tools surged by 38.2% year-on-year, reflecting growing international recognition of mid- to high-end equipment. • Import value saw only a modest increase of 1.4%, indicating the continued acceleration of domestic substitution for high-end equipment, such as five-axis CNC machine tools. Structural Differentiation in Demand
• Fields such as new energy vehicles, aerospace, and low-altitude economy contribute over 60% of new orders, while demand for traditional general machine tools remains under pressure. For example, in Keda CNC's 2024 newly signed orders, the aerospace sector accounts for 53%.
Outlook on Core Trends for 2026: Resonance of Policies, Technologies, and Globalization
1. Advancement in High-End Manufacturing and Deepening Domestic Substitution • Policy-Driven Support: The national "15th Five-Year Plan" and the "Mechanical Industry Steady Growth Work Plan (2025–2026)" explicitly support breakthroughs in core technologies for industrial machine tools. Fiscal, tax, and financial policy incentives will further drive the development of high-end CNC systems and precision functional components. • Substitution Potential: The current market share of domestically produced high-end machine tools is less than 40%, with expectations to exceed 45% by 2026, particularly in specialized fields such as aerospace engine blades and integrated die-casting molds for new energy vehicles.
2. Intelligent Integration Evolving from Single Machines to Systems • Accelerated Adoption of AI Technologies: For example, Huazhong CNC has introduced the world’s first intelligent CNC system integrated with an AI large model, which already features autonomous programming and process optimization capabilities. The proportion of intelligent machine tools is expected to rise significantly in the future. • Shift Toward Solution-Based Competition: Companies are transitioning from "equipment suppliers" to "smart manufacturing service providers," offering value-added data services such as remote operation and maintenance, as well as energy efficiency management. It is projected that by 2026, service revenue will account for over 20% of the total revenue for leading enterprises.
3. Diversification of Export Markets and Localized Strategies • Southeast Asia and the Middle East as New Growth Drivers: In the first three quarters of 2025, exports to Vietnam and Thailand increased by 37.4% and 56.4%, respectively. The deepening implementation of RCEP in 2026 will further unlock market opportunities. • Addressing Trade Barriers: To mitigate tariff risks, companies must establish overseas production facilities, such as relocating capacity to Southeast Asia, while strengthening compliance capabilities, including CE certification for the EU and UL standards for the United States.
4. Acceleration of Green Manufacturing and Sustainable Development • Driven by Policy and Customer Demands: Downstream industries, such as new energy vehicles, are imposing stricter carbon footprint requirements on their supply chains. This is driving the machine tool industry to accelerate the adoption of energy-efficient motors and dry cutting technologies.
5. Accelerated Industry Consolidation and Divergence • Leading Enterprises Expanding Their Advantages: In the first three quarters of 2025, key enterprises under the association achieved a revenue growth rate of 9.3%, exceeding the industry average, with R&D intensity reaching 5.2%. Mergers and acquisitions are expected to remain active in 2026. • SMEs Focusing on Niche Markets: Small and medium-sized enterprises should concentrate on specialized areas such as customized grinding machines and ultra-precision cutting tools to avoid homogeneous competition.
Risks and Challenges • Domestic Demand Uncertainty: The Manufacturing Purchasing Managers' Index (PMI) remains in contraction territory (49.2% in November 2025), and investment willingness in downstream industries requires further recovery.
• Cost Pressure: Fluctuations in raw material prices and shortages of high-end technical talent may squeeze corporate profit margins.
• International Trade Environment: Potential impacts on exports from external factors such as U.S. tariff policy adjustments and technical standard barriers require continuous monitoring. Transitioning to a Quality-Driven Growth Cycle In 2026, China's machine tool industry is poised to sustain steady recovery, driven by the combined forces of policy incentives, technological breakthroughs, and globalized operations. The industry’s development focus is shifting from "scale expansion" to "quality enhancement," requiring companies to concentrate on the following core strategies:
1. Strengthen High-End Product Innovation: Prioritize breakthroughs in core technologies such as five-axis machining centers and high-end CNC systems.
2. Deepen Digital Transformation: Build data-driven, full-lifecycle service capabilities to enhance intelligent manufacturing.
3. Optimize Global Market Presence: Mitigate trade risks through localized overseas production and compliance system development. Driven by the new industrialization strategy, the machine tool industry, as a cornerstone of manufacturing, is expected to achieve 5%-7% revenue growth in 2026, providing stronger equipment support for building China into a manufacturing powerhouse.
