Research from Siemens Financial Services reveals growing market for machine retrofit

May 15, 2025

A whitepaper about the retrofit revolution and its role in managing the production machine portfolio

Manufacturing technology:

Research from Siemens Financial Services reveals growing market for machine retrofit

 

  • Over 50% of Original Equipment Manufacturers (OEMs) and vendors are promoting retrofit as a key part of their ‘sustainability’ portfolio, helping customers move towards a circular economy.
  • Research from Siemens Financial Services (SFS) shows that 75% of manufacturing machine builders offer retrofit modernization of existing machines.
  • Machine builder respondents reported that retrofit can represent between 5% and 30% of annual revenues.
  • A majority of respondents noted the power of flexible financing to get retrofit deals over the line and overcome investment hesitancy.
  • 66% of respondents stated that integrated financing options helped them sell more sustainability-enabling equipment.

 

A new research report from Siemens Financial Services (SFS), A perfect (retro)fit: The retrofit revolution and its role in managing the production machine portfolio, has gathered opinion from 100+ OEMs and vendors internationally to understand retrofit market demand, product offering and financing techniques.

 

Manufacturing respondents to the SFS report understand the benefits of digital transformation. The challenge is how to invest in that transformation without tying up precious capital. This is where the value of flexible financing can make the difference between investing or not.

 

For the manufacturer, each week without modernized capabilities is a week of lost revenues. In some cases, acquiring brand new replacement equipment can involve long lead times from the OEM. Therefore, according to research respondents, manufacturers who wish to bridge the gap between the investment burden of digital transformation and its well-publicized benefits – efficiency, productivity, reduced cost-per-piece – often make the choice of retrofitting and modernizing existing machines.

 

Respondents to the SFS study emphasized that retrofit should be seen in the context of an OEM or vendor’s whole offering, with the whole machine portfolio carefully managed throughout the lifespan of the machines and through their upgrade and replacement cycles to optimize value and productivity.

 

The SFS research project, named Talking Sustainability, delivered a number of key findings about today’s manufacturing machinery retrofit market, an important component of circularity in the sector:

 

  • Respondents confirmed that many manufacturing machine builders have a very established retrofit business. Three quarters of respondents offer retrofit options to their manufacturing clients, with a slight bias towards companies selling into international markets.
  • Respondents who gave an idea of the breadth of their retrofit business estimated that it represented between 5% and 30% of annual revenues. Furthermore, a selection of respondents noted that the margins of profit on retrofit projects are equal to those on sales of new machinery solutions.
  • Many respondents expect their retrofit business to grow over the rest of the decade. Moreover, a handful of the machine builders taking part in Talking Sustainability specifically noted that they were now designing machines with future retrofit in mind.
  • Nevertheless, financing structures to specifically support retrofit sales are at an early stage of development, said respondents. While two thirds state that integrated financing options helped them sell more sustainability-enabling equipment (of which the retrofit proposition is one), only a few pioneers are yet working with specialist financiers such as SFS to provide integrated retrofit financing solutions.

 

John Bolton, Sales Manager, Industry Finance, Siemens Financial Services notes, “Retrofit is definitely a growing segment, as OEMs and vendors seek to offer best value to their manufacturing customers, even though many will still prefer brand new models. The beauty of flexible finance is that it makes the transition to digitalized, more sustainable equipment affordable and cash-flow friendly for manufacturing customers whether they opt for the new or the retrofit option.”

 

Research methodology

Over 100 machine builders were interviewed in 2024 – via a combination of qualitative and quantitative research methods. These machine builders were located across the globe, including the U.S., Europe, India and China. Respondents were asked their views on:

  • The drivers of sustainability for manufacturing customers
  • The ways in which their machinery and technology enables sustainability for those manufacturing customers
  • The role of finance to ease investment in more sustainability-enabling machines.

 

 

For the full insight study, please visit: www.siemens.com/the-perfect-retrofit

 

For further information about Siemens Financial Services (SFS), please visit: www.siemens.com/finance

 

Follow us on LinkedIn at: www.linkedin.com/showcase/siemens-financial-services

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