Manufacturers across Europe are experiencing the effects of declining automotive production. The European Automobile Manufacturers Association (ACEA) reported an 11% drop in vehicle production in 2024, a downturn caused by supply chain disruptions, increased material costs, and shifting consumer demand toward electric vehicles (EVs). As automakers reduce reliance on internal combustion engine (ICE) components, suppliers that once held long-term contracts are left searching for new revenue streams.

For companies specializing in precision CNC manufacturing, the transition is particularly challenging. Engine components, transmission parts, and exhaust systems, the bread and butter of many machine shops, are becoming obsolete as EV production scales up. Many manufacturers are now looking to aerospace, medical technology, and high-performance industrial sectors as alternatives. The key challenge is identifying buyers who require their exact machining capabilities and connecting with them before financial strain forces downsizing or closure.

AI Is Changing CNC Procurement

Finding new clients has traditionally been a slow and uncertain process for suppliers. Relying on trade fairs, industry referrals, and word-of-mouth outreach can take months, and many businesses lack the resources for an extensive business development effort. The introduction of AI-powered platforms has significantly reduced the time it takes manufacturers to match with buyers looking for their specific production capabilities.

Partfox, an AI-driven CNC matchmaking network, is designed to streamline this process by automating buyer-supplier connections. Instead of manufacturers manually searching for potential clients, the platform uses artificial intelligence to assess production capacity, material requirements, and machining specifications, instantly identifying buyers with matching needs. This real-time capability allows manufacturers to shift their focus from finding clients to fulfilling contracts.

Derek Tanner, CEO of Orderfox, noted that the ability to cut down on wasted time is critical for CNC suppliers trying to adapt. “The industry is changing rapidly, and companies need access to new markets now, not in six months. AI-driven precision matching eliminates the guesswork, allowing suppliers to transition smoothly into industries that need their expertise.”

Manufacturers Shifting from Automotive to Aerospace and Medical Sectors

For CNC manufacturers adjusting to the changing market, aerospace and medical technology have become primary focus areas. Aerospace companies require high-precision components made from lightweight materials such as titanium and aluminum, similar to those used in automotive engineering. The European aerospace sector is projected to grow by 6.8% annually through 2030, creating steady demand for CNC machining services.

A Munich-based machining firm specializing in ICE engine components saw a 60% drop in orders last year. To address the problem, the company integrated with Partfox’s AI-driven matching and connected with aerospace suppliers needing titanium turbine parts. The shift required only minor adjustments to the machining process, allowing the firm to retain its workforce while reducing dependence on automotive contracts.

Medical technology is also providing new opportunities for CNC manufacturers. The European medical device market is expected to reach $178 billion by 2027, driven by the demand for precision-machined surgical instruments and robotic-assisted surgery systems. A supplier in Turin that previously produced aluminum casings for fuel injection systems is now manufacturing surgical drill components after securing multiple contracts through AI-powered matching.

Timur Göreci, CRO of Orderfox, emphasized that adapting production capabilities to new industries is becoming necessary for long-term stability: “Manufacturers that still rely entirely on automotive contracts will find themselves increasingly fragile. The ability to transition into sectors like aerospace or medical technology will separate those that thrive from those that struggle to survive.”

Reducing Costs Through AI-Driven, Commission-Free Procurement

Beyond finding new clients, manufacturers also face increasing cost pressures. Many traditional procurement platforms charge transaction fees or commissions on supplier-buyer connections, which reduces profitability, particularly for small and mid-sized CNC shops.

Partfox operates on a commission-free model, allowing suppliers to connect directly with buyers without intermediaries. CNC manufacturers can negotiate contracts without added costs, making new client acquisition more sustainable. The AI-driven system also ensures that suppliers receive real-time updates on production needs, preventing the delays that often come with batch-updated procurement databases.

AI Procurement Becomes an Industry Standard

With traditional procurement methods declining, manufacturers are relying on AI-powered systems to keep their businesses running at full capacity. Automakers are localizing supply chains and consolidating supplier networks, making it more difficult for smaller CNC firms to compete. AI-based matching provides an alternative by giving suppliers access to industries that continue to grow, such as aerospace, medical technology, and consumer electronics.

As automotive production continues to shift away from legacy supply chains, CNC manufacturers that integrate AI-driven procurement into their operations are positioning themselves for long-term growth in industries where demand is increasing rather than shrinking.