Challenges and Opportunities for German Manufacturers as EMO 2025 Approaches

The global industrial economy is facing numerous headwinds, and European manufacturers, particularly in Germany, are feeling the pressure. Sluggish demand, geopolitical tensions, and trade disputes are exacerbating structural challenges within the sector. The German manufacturing industry, known for its export-driven economy, is also facing significant impacts from the slowdown in key markets, especially China. These dynamics are placing German manufacturers, particularly those in the machine tool sector, at the sharp end of the crisis.

Recent data from the VDW (German Machine Tool Builders’ Association) highlights the difficult landscape for manufacturers. Orders for German machine tool manufacturers fell by 23% in the first three quarters of 2024 compared to the same period in 2023. Dr. Markus Heering, Managing Director of the VDW, acknowledged the tough situation, stating, “The current order situation remains difficult, and the news from the automotive industry, in particular, is a cause for concern.”

The automotive sector, traditionally a key pillar for Germany’s machine tool industry, continues to face challenges. In 2023, automotive manufacturers accounted for around 27% of total machine tool production, but this is 16% lower than four years ago. The ongoing shift towards electric vehicles (EVs) is driving a reduction in investments in traditional machining technology, further tightening demand in this critical sector.

Despite these challenges, the machine tool industry is seeing shifts in customer demand, with new sectors emerging as important sources of business. Mechanical engineering, which now accounts for approximately 30% of orders, has overtaken the automotive industry as the leading customer sector for machine tool manufacturers. This sector encompasses a wide array of industries, including tool and mold making, agricultural machinery, hydraulics, pneumatics, and drive technology. Additionally, industries such as aerospace, electrical engineering, and metal production are becoming increasingly significant to machine tool producers. The growing demand from rail vehicle construction, energy technology, precision engineering, and medical technology is also helping to diversify the customer base.

EMO 2025: A Showcase for Innovation

As Germany’s machine tool sector navigates these turbulent waters, the upcoming EMO trade fair, scheduled for 22 to 26 September 2025 in Hanover, offers a vital opportunity to showcase innovations and set the stage for future growth. Celebrating its 50th anniversary, EMO has long been recognized as the world’s leading trade fair for production technology. With its focus on automation, digitalization, and sustainability, EMO 2025 promises to offer insights into the future of manufacturing while reflecting on half a century of industry progress.

Dr. Thorsten Schmidt, CEO of the Heller Group, emphasized the importance of EMO as a platform for industry collaboration and innovation. “EMO connects people, ideas, and technologies in a unique way,” he noted. “It allows us to strengthen long-standing partnerships, establish new contacts, and present groundbreaking innovations to an international audience.”

Exhibitor interest in the upcoming EMO is already high, with over 1,200 companies registered by December 2024. For the event organizer, VDW, this strong interest signals that the trade fair continues to be a vital part of the machine tool industry’s recovery and growth, even amid current economic uncertainties.

New Growth Areas for Manufacturers

Among the exhibitors for EMO 2025 is Supfina, a surface finishing system manufacturer from Wolfach, Baden-Württemberg. The company is positioning itself to benefit from the rise of new growth sectors such as e-mobility, wind power, and sustainable production. Supfina’s Managing Director, Christoph Siegel, shared the company’s strategy to counteract the slowdown in the automotive sector by investing in digitalization and automation. “We see this as a long-term opportunity to increase efficiency and strengthen our competitiveness,” Siegel said. Supfina’s broad customer base across various industries and its strong focus on technological innovation will be key to maintaining its growth trajectory.

Similarly, Datron AG, a solution provider for industrial milling and dispensing, is focused on delivering high-quality, German-engineered solutions to retain customer loyalty and attract new clients. The company is building a new 40-million-euro facility to consolidate its operations, which will help it tackle the challenges of skilled worker shortages in Germany. Despite a decline in turnover and orders, largely due to the automotive industry’s ongoing transformation, Datron remains committed to its business in Germany. The company will use EMO 2025 to showcase its latest technology and innovations in multi-axis milling and automation.

Navigating Structural Changes and Cost Pressures

For Peiseler, a manufacturer of positioning solutions for various industries, including energy technology, aerospace, and medical technology, the current economic climate is especially challenging. With a significant drop in orders from automotive sector suppliers, Peiseler is focusing on technological innovation and quality to differentiate itself from competitors, particularly those from Asia who benefit from lower labor and energy costs. Managing Director Arnd Kulaczewski explained, “Our solutions may not always be the cheapest, but they are characterized by maximum precision and reliability.” Peiseler is also diversifying its customer base to reduce dependence on the automotive industry and tapping into sectors like additive manufacturing, where precision and innovation are highly valued.

Kulaczewski sees EMO as a key event for Peiseler, allowing the company to present its latest technologies to a global audience. “EMO provides us with a stage to showcase our solutions and meet with customers and potential partners from across various industries,” he said.

Looking Ahead

The road ahead for German manufacturers, especially those in the machine tool industry, remains challenging, but with new growth areas, technological innovation, and a focus on quality, companies are adapting and positioning themselves for long-term success. The upcoming EMO 2025 trade fair will be a crucial platform for these manufacturers to showcase their latest developments, strengthen relationships, and explore new business opportunities in an ever-changing global market.