KIRIKKALE
CHAMBER OF COMMERCE AND INDUSTRY

After the crisis, a significant change is observed in the machine sector. The concentration ratio of the machinery market has shown a shift towards developing countries and especially towards east, and due to this effect, the market share of machinery manufacturing in developing countries has also increased. While the companies in the US, the European Union and Japan still have a significant market share in the production of high-tech machines, the developing countries and especially China in the middle and low-tech machines increase their effectiveness in the world markets.

The shift to the east of the market led some large-scale companies in Europe to establish manufacturing or assembly facilities in these developing countries. However, a significant proportion of European machinery manufacturers, most of whom are SMEs and family companies, cannot keep up with this trend. This development makes it difficult for some small-scale companies to maintain their position in the world market.

European companies, especially in Far East countries, instead of direct investment, to establish partnerships with entrepreneurs in these countries, manufacturing or assembly difficulties, the protection of property rights difficulties, the company's technology and innovations to other competitors can be infiltrated.

In 2008, 91 thousand 800 companies operating in the machinery manufacturing industry sector in 27 EU member countries have employed 3.2 million people and realized a production of 598 billion Euros. Machinery manufacturing accounted for 9.1 percent of total industrial production.  The economic crisis in 2009 reduced production by 20 percent.

All of the 91 thousand 800 firms mentioned are not machinery manufacturers. The number of companies producing parts of the machine sector besides the workshops with less than 10 employees is included in this figure.  In a report prepared for the EU Commission in 2008, the number of companies producing more than 20 workers in EU countries was 20,660. This number was 5 thousand 920 in Germany, the largest machine manufacturer in Europe.

In 2008, while the employment of the German machinery industry was 965 thousand people, this number decreased to 939 thousand in 2009 and 908 thousand in 2010. It is estimated that the rapid development in 2011 will enable employment to exceed 930,000.  The value of manufacturing amounted to € 179.6 billion in 2007, € 195.5 billion in 2008 and € 150.8 billion in 2009, totaling € 165.8 billion.

The fact that the quantities are mostly limited in the machinery manufacturing industry makes it difficult for the European industry to create a sub industry that is unique to the machinery sector. Machine manufacturers try to benefit from the automotive and other sub industries. The large demands of the automotive sector, as well as the limited demands of the machinery sector, are not attractive for these organizations. This situation causes the intracompany production in the sector to be more than other sectors. In addition to this, CNC program units, electronic components, linear guides, laser units and some other special parts are manufactured by a limited number of companies in the world, as in our country, the manufacturers in the EU countries take these to some extent from these institutions. It is very difficult for new players to enter these manufacturing issues.  Because the machine customer in the machine will receive certain brand inputs, especially the program requires the use of units. This also leads to negativity for some small-scale machine manufacturers. Large-scale machinery manufacturers have the bargaining power in terms of both the price and delivery times with the high volume orders they give to the trusting corporations, while the small-scale firms that have a small number of manufacturing firms are inadequate in the bargaining power and may be  disadvantageous not only in price but also in deliveries when the market is good.

There are a large number of small-scale manufacturers in European countries. One reason for this is that a very small number of machines can be manufactured in series of mass production, often in accordance with the expectations of new designs or existing designs are revised in accordance with expectations. As a result of this necessity, organizations that employ engineers and specialized workers who can design or develop within the structure can increase their competitiveness. On the other hand, the fact that the employment of such elements is quite high costs compel the opportunities of small-scale companies.

In addition, researches in the European Union state that the importance of technology and innovation in the machinery sector, the increase in the importance of manufacturing suitable for the customers, the companies that cannot realize the technology development and innovation studies have been challenged in competition and some of them have to leave this area.