Pneumatic components market: Changes stir tranquil waters
IHS reports that the pneumatic valve market landscape is starting to radically change as Chinese suppliers start to expand into the U.S. and Europe.
The global market for pneumatic valves and actuators, estimated to be worth nearly $8 billion in 2012, is undergoing a competitive shakeup as low-cost Chinese suppliers continue to expand into the U.S. and Europe.
Pneumatic power is a well-established technology and the market is forecast to grow essentially in parallel with overall demand for industrial machines, according to the new report entitled “Pneumatic Valves and Actuators” from information and analytics provider IHS.
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 the worldwide revenue in 2012.
In general, pneumatic valves and actuators are part of the large market for industrial machinery components. However, just below the surface is a teeming mass of up-and-coming suppliers, many of which are based in Ningbo, China. These companies are aggressively expanding into new markets in the West, a development that is expected to trigger intensified competition for established suppliers.
The Chinese suppliers are focusing on standard legacy pneumatic valves and actuators and compete very aggressively on price. They now are turning their attention to the large markets in Europe and North America, which they are addressing 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 much harder for the low-cost foreign manufacturers to provide.
Because modern factory operations and processes steadily have been increasing in their complexity, engineers working in these facilities value the control, feedback and condition monitoring properties that the higher-end products offer. Therefore, one of the key focus areas 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. 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 at these companies would be well advised to get their hands on current, reliable and actionable market intelligence to guide them through the increasingly competitive landscape.