GERMAN SUPPLIERS SEE MARKET RECOVERY
Turnover in 2020 fell by 4.9% to EUR 10.5 billion (US$12.8bn) and the order intake dropped by nearly 11%. However, expectations for the future are positive, due to global newbuilding market development, according to mechanical engineering association VDMA. “Even if there is still insufficient capacity utilisation in parts of the industry now, the increasing orders for new ships give more than hope for 2021 and 2022,” stated Martin Johannsmann, chairman of VDMA’s Marine Equipment and Systems division and CEO of bearings maker SKF.
The share of foreign business in last year’s turnover was 76%, underscoring the leading role that German companies play in supplying the worldwide shipbuilding and shipowning markets with equipment, machinery and related technology and services.
While production has been maintained through the three Covid-19 waves to date, travel restrictions have hampered service, distribution and sales activities. As an export-orientated industry and national economy, which requires travel flexibility, VDMA calls for urgent political action on the issue of digital vaccination passports.
Other EU countries accounted for 34% of last year’s order inflow to German firms, on a par with equipment exports to the Asian region as a whole. Around 18% of new business emanated from China, which took 14% of German production exports during the same period. It is anticipated that the picture will change again in 2021 in favour of China, where shipyards are experiencing strong growth in newbuild demand.
Nonetheless, German equipment manufacturers face a rising competitive challenge globally from Chinese counterparts, such that VDMA feels that intervention is needed. “To secure a level playing field, trade policy instruments in Germany and Europe must be realigned. This involves, on the one hand, protecting the EU’s internal market from subsidised competition from third countries and, on the other hand, opening up markets in third countries,” stated the VDMA.
Digitalisation and digital products are seen as crucial to business development over the coming years. In mechanical engineering, open interfaces based on the Universal Machine Technology Interface (umati) are being defined for all sub-sectors.
“The joint efforts of the German maritime industry in drawing up the VDMA standard sheet on Module Type Package (MTP) give the industry a head start. But other nations, above all China, also want to set the standard,” observed the association.
