ARC reports China’s PLC market will double by 2008

Dedham, MA—China’s market for PLCs is expected to grow at a 14.1% compound annual growth rate (CAGR) over the next five years from $370 million in 2003 to nearly double that by 2008, according to a new study by ARC Advisory Group.


Dedham, MA— China’s size, fast growing manufacturing industries, and capacity to invest increasing export revenues are helping it exceed 20% annual growth in some automation segments. As a result, China’s market for PLCs is expected to grow at a 14.1% compounded annual growth rate (CAGR) over the next five years in spite of a decline in prices. The market was about $370 million in 2003, and is forecasted to nearly double by 2008, according to a new study by ARC Advisory Group.

While local presence, commitment to service, technologically superior solutions, and low pricing are among the key ingredients necessary for success in this overheated marketplace, PLC users in China are extremely selective about the products and suppliers they favor.

"Suppliers' success clearly depends on the location of their facilities, the industries they focus on, the product mix they offer, and the technical and cultural competency of the sales and support channels they establish," says Himanshu Shah, ARC senior analyst and co-author of ARC's "Programmable Logic Controller Outlook for China."

ARC reports that several factors are driving growth of China’s PLC market. For example, power flowing in from the Three Gorges Dam and Yellow River power generation projects will remove constraints for further growth of power hungry manufacturing industries. The outsourcing trend by multinational companies, who are setting up production bases in China is fueling the use of automation. Meanwhile, upgrading of older, now-privatized State Owned Enterprises (SOEs) will demand more automation to compete in export markets. The surge in engineering education and adoption of the latest technologies by local Chinese companies aiming to export will support PLC adoption at a broader level, while the booming Chinese machine tool market will continue to demand more PLCs.

Control Engineering Daily News Desk
Jim Montague, news editor

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