Zhongkan Beier (Tangshan)

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German machinery manufacturing industry is obviously affected by the epidemic

According to a survey recently released by the German machinery and equipment manufacturing association, 84% of the machinery manufacturing enterprises surveyed were affected by the epidemic situation. About half of the enterprises suffered "obvious" or "serious" impact due to the interruption of global supply chain, resulting in insufficient supply of parts or failure of customers to receive goods as scheduled. About 96% of the enterprises surveyed said that their turnover will drop this year, and 60% of them expect the turnover to drop by 10% to 30%. Carl Welk, chairman of the association, said real production in the industry is expected to fall by 5% this year. According to the mechanical manufacturing barometer released by PricewaterhouseCoopers, 38 of the 100 German executives are pessimistic about the development prospect of the industry, while only 22 are optimistic about the prospect.

Machinery manufacturing and automobile manufacturing are both pillar industries in Germany, and they are closely related. German automobile manufacturers are important customers of machinery manufacturing enterprises. Affected by the epidemic, Volkswagen, Daimler and BMW, the three major German automobile manufacturers, have announced that they will stop work in Europe, and orders received by German machinery manufacturers have dropped sharply. Ralph vichers, chief economist of the German machinery and equipment manufacturing association, said the greater the impact on the customer industry, the greater the pressure on suppliers.

German automobile industry is undergoing a deep transition from traditional internal combustion engine to electrification. Many automobile enterprises have delayed or stopped their investment plans, which has affected the mechanical manufacturing industry. According to the German machinery and equipment manufacturing association, 11% of the total added value created by the machinery manufacturing industry in the world comes from the automobile industry, while in Germany, the proportion is as high as 20%. Vichess said that the transformation prospect of German automobile industry is still uncertain in 2020, which also casts a shadow on the development prospect of machinery manufacturing industry which is inseparable from the automobile industry.

In fact, Germany's machinery manufacturing industry was in a downturn long before the outbreak. According to the statistics of the German machinery and equipment manufacturing association, orders of German machinery manufacturing industry in 2019 decreased by 9% compared with the previous year. Olaf Waterman, a macroeconomist at the association, said that 2019 would be a "dark year" for German machinery manufacturers. The weakness of world economy, the aggravation of trade disputes, trade protectionism, brexit and the deep transformation of automobile industry bring a series of uncertain factors, which restrain the investment intention of enterprises and hinder the steady development of German machinery manufacturing industry.

In response to the impact of the epidemic, the German government announced about 750 billion euro rescue plan. This includes the establishment of a 600 billion euro "economic stability fund" to provide loans and guarantees for enterprises hit by the epidemic, and the government will also take shares in enterprises when necessary. Financial assistance of up to 50 billion euros will be provided to self-employed and small businesses. Many enterprises began to actively adjust production capacity and seek alternative suppliers to alleviate the impact of temporary disruption of global supply chain.

The analysis shows that a series of measures launched by the German government are aimed at helping enterprises survive the crisis. However, in order to remain invincible in the new round of manufacturing competition, it is necessary to continue to seek intelligent and digital transformation. German machine tool manufacturer demagesen Seine, a machine tool manufacturer from Germany's northern Rhine westphalen, is using the downtime during the outbreak to train employees through online video platforms. Christian Torres, the company's chairman, says the company has been promoting digital transformation a few years ago. Digitalization not only improves the production process of enterprises at full speed, but also makes the company relatively calm in dealing with the impact of the epidemic. "The current situation requires a high degree of flexibility in production, and this capability is also necessary after the end of the epidemic."

Zhongkan Beier (Tangshan)

Environmental Protection Technology Co., Ltd

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