Pneumatic shift in sight
5 Sep 2013
Report warns of root changes to the global pneumatic components market.
The global market for pneumatic valves and actuators is undergoing a competitive shake-up as low-cost Chinese suppliers continue to expand into the US and Europe, according to a new report.
A well-established technology with a market estimated to be worth nearly $8 billion in 2012, pneumatic power is forecast to grow in parallel with overall demand for industrial machines according to information and analytics provider IHS.
The report, entitled Pneumatic Valves and Actuators, claims the market is dominated by a handful of large manufacturers led by SMC from Japan and Festo from Germany, which together accounted for slightly more than 45%of worldwide revenue in 2012.
Incumbent manufacturers are focusing on complex, sophisticated and high-end products and services
However, a large number of up-and coming suppliers - many of which are based in Ningbo, China - are aggressively expanding into new markets in the West according to the report. And this is expected to trigger intensified competition for established suppliers.
Chinese suppliers are focusing on standard legacy pneumatic valves and actuators and they compete aggressively on price, states IHS. They are now turning their attention to the large European and North America markets through local distributors.
In order to protect their dominant positions in these massive established markets, incumbent manufacturers are focusing on complex, sophisticated and high-end products and services that are harder for the low-cost foreign manufacturers to provide.
The report claims that modern factory operations and processes have steadily been increasing in their complexity and that engineers working in these facilities value the control, feedback and condition monitoring properties that the higher-end products offer.
Therefore, a key focus area for market leading suppliers has been pneumatic valve blocks that incorporate networked communications capabilities.
Consequently, sales of pneumatic valve blocks are forecast to grow nearly three times faster than revenue for single valves during the next five years.
“In what initially seems to be a flat market for established and simple technology components, there are some key product replacement trends that will influence the future development of the market,” states the report. “The way that market suppliers address these trends will shape the competitive environment in the years to come.
“Therefore, strategic marketing, product management and business development personnel would be well advised to get their hands on current, reliable and actionable market intelligence to guide them through the increasingly competitive landscape.”
