Advancing market maturity and a weak economy pose an immediate challenge to manufacturers in the $3.17 billion European welding equipment and consumables market. The long-term market forecast is, however, optimistic with increasing demand for advanced welding equipment projected to push revenues to $3.51 billion in 2009.
“Manufacturers will need to embrace the future with streamlined operations and aggressive growth plans, as it is competitive strength that will generate growth for individual companies in this mature market,” warns Frost & Sullivan ( www.frost.com ) research analyst Ozan Dogruer.In keeping with end-user demands for advanced technologies, a positive outlook is envisaged for the laser cutting and welding equipment and the welding robots product segments.Laser cutting and welding equipment, currently the fastest growing product segment, also displays the highest growth potential within the overall market.
Increasing power ratings and sustained advances in beam quality and processes, such as remote welding, are expected to boost revenues. Recent improvements in solid state laser technology, including disc lasers and fibre lasers, are anticipated to reinforce growth trends.The arc welding equipment and welding consumable markets remain Challenging. Both markets are highly mature and certain product segments within them are expected to continue declining. Some segments, such as TIG and MIG/MAG welding equipment are projected to see positive developments over the next few years.
Some types of solid wire and flux cored wire are also expected to generate promising growth, such as stainless steel types. Spiralling labour costs and the falling number of skilled welders coupled with the rising demand for high-precision welding is poised to drive the uptake of welding robots. The sizeable capital investment required to install automated equipment is expected to sustain relatively stable revenue growth, however, price reductions continue to act as a barrier to more significant growth.Among the application segments, the automotive vehicle manufacturer and supplier segments are the most progressive and dynamic, continually investing in new technologies such as fibre lasers, remote laser welding and enhanced robotics.
Persistent demand from these sectors is expected to encourage technological advances and drive market revenue growth.Dominated by mechanical joining technologies, the aerospace sector is currently the smallest application segment for welding equipment. However, rising awareness of welding processes supported by continued advances in R&D present exciting new opportunities for welding equipment manufacturers.Despite slowdown in other regions, the welding equipment and consumables markets in Iberia and the United Kingdom have experienced steady growth. A vigorous construction sector and robust demand for automation and sophisticated product types have underscored strong performances by these regions.
In Spain particularly, demand levels have registered a sharp increase in recent times due to augmented development funds and strong industrial expansion. Both Spain and the United Kingdom are forecast to account for a larger share of overall market revenue in future.Market maturity and restrained growth levels have aggravated competitive pressures. While consolidation is expected to persist, the overall market is expected to remain highly fragmented. In 2002, for instance, there were over 200 manufacturers active in the market.
“Market penetration generally has to be gained by acquiring customers from the competition, since the customer base remains flat,” notes Mr. Dogruer. “It is increasingly up to manufacturers to play a proactive role in building their competitive strength and achieving growth by bettering the competition.”The leading manufacturer in the European market in 2002 was ESAB. The other main competitors in the fray included Air Liquide, the IWKA Group, ABB, Lincoln Electric, Boehler Thyssen and MEC Holding.
Price competition is rising within the welding market. As the end-user base consolidates, price-conscious customers are using their superior bargaining power to demand increasingly competitive prices. Most manufacturers have, therefore, been pressured to cut costs. “Competition will increasingly be focused on meeting the challenge of cost-effective technologies and value-added solutions,” concludes Mr. Dogruer.
“Manufacturers delivering higher efficiency and more value-added features with better priced products and those providing multiple technologies will be able to gain an edge over their competitors.”Frost & Sullivan, an international growth consultancy, has been supporting clients' expansion for more than four decades. Our market expertise covers a broad spectrum of industries, while our portfolio of advisory competencies includes custom strategic consulting, market intelligence and management training. Our mission is to forge partnerships with our clients' management teams to deliver market insights and to create value and drive growth through innovative approaches.
Frost & Sullivan's network of consultants, industry experts, corporate trainers and support staff, spans the globe with offices in every major country.
