Analysis Of The World Bearing Industry: Current Situation Snd Prospects

Global bearing demand is expected to grow at an annual rate of nearly 5%, reaching 80 billion euros in the next five years. This accelerated growth follows the economic downturn caused by the COVID-19 pandemic and the post-pandemic policy/restriction reversal. The disruptive event of the COVID-19 pandemic continues to leave a legacy of uncertainty; including the Russia/Ukraine war, raw material shortages, inflation and current macroeconomic policies. Nonetheless, continued consumer spending is leading to positive global economic growth. Foreign investment in highly concentrated manufacturing industries such as Asia/Pacific continues to trend upward. Finally, new bearing technologies and developments are moving forward with growing concerns about environmental issues and the introduction of more ecological and carbon-neutral products.

The global bearing industry is recovering from the epidemic
There are fewer pandemic restrictions around the world, which has increased the activity of people and businesses. Consumer spending and demand for durable goods are increasing in most countries. Supply chains have stabilized, and financial constraints imposed by fluctuations in currency values and available loans have decreased. Together, these and other factors have helped the world economy, allowing the global bearing industry to recover from a double-digit decline in demand for non-consumer tangible products.

All major industries around the world now need more bearings due to lower demand. The diminishing impact of price sensitivity experienced by manufacturers and consumers has reinvigorated industry strategic investment and R&D spending. New product launches are no longer widely delayed. Finally, with the increase in the use of machinery, including automobiles, bearing replacement has once again become an urgent need, boosting aftermarket sales.

Regionalized demand and supply

In the next five years, the Asia-Pacific region will account for the largest proportion of economic growth, with China and India leading the way. Countries in the Asia-Pacific region are ideally positioned to host growth due to their focus on exports and competitive costs. The global market is still dominated by large multinational bearing companies. Most major bearing manufacturers strategically concentrate their production facilities in countries with large domestic markets. Today, China has one of the largest domestic markets and has become a hot spot for continued investment by almost all major bearing manufacturers. China continues to promote regional growth and continues to consolidate its industrial layout. The most advanced bearing manufacturing is still in Japan, the United States, Sweden and Germany. These countries are home to several of the world's top bearing manufacturers. Companies serving these large growing markets focus on high-tech, high-value bearings. Although these countries maintain a certain market share served by strong domestic bearing manufacturers, they still rely on imports from low-cost countries to meet the basic needs of the domestic market.

Europe
Demand and production of bearings in Europe are expected to continue to increase, driven primarily by government initiatives to encourage the reshoring of manufacturing and a general increase in manufacturing activity itself. The main challenges in the medium to long term remain the price, supply and diversification of energy resources, including the need for and changes to the sustainable development of production activities. The main drivers in terms of market demand in the coming years will be investment in the household durable products industry and the recovery of the after-sales market.
Asia-Pacific

The Asia-Pacific region, which accounts for more than 60% of global production and demand, will benefit the most from economic growth in the coming period. Japan, China and India will become the driving force regions for growth in bearing production and exports. Population growth and an increase in total income will further drive economic growth in the region.

Middle East
Demand in the region is expected to continue to be one of the fastest growing between now and 2030, as foreign investment, manufacturing capacity development, large-scale infrastructure projects and demand from a booming population increase.
North America

Demand for bearings in the region, which includes Mexico, the United States and Canada, is expected to grow at an average annual rate of 3% over the next five years. Japan and China are currently the main suppliers to the North American industry, and this trend is expected to continue.
South America
By 2030, demand in Central and South America is expected to grow by more than 6% annually. After the COVID-19 epidemic, with the growth of industrial output, the economies of various countries in the region recovered rapidly, and bearing sales also recovered significantly. Brazil is creating the largest demand and supply in the region.

Rapid growth of the bearing industry
Large manufacturing industries account for a high proportion of bearing demand. These include, but are not limited to, automotive, aerospace applications, heavy machinery, industrial equipment, engines and other drivetrains. Every individual market experiences recurring trends. Most OEMs maintain safety stocks in anticipation of higher demand. During difficult economic times, such as during the COVID-19 pandemic, manufacturers will limit inventories and reduce materials on hand. When demand recovers and inventories need to be replenished, manufacturers will increase production levels, causing demand for bearings to increase. In the next five years, global bearing sales are expected to grow significantly, and the proportion of motors and automotive drives will far exceed 1/3 of new product demand.

Russia/Ukraine War Russia/Ukraine War
Beyond the aftermath of the COVID-19 pandemic, the most significant current event that will undermine future economic gains is the ongoing conflict between Russia and Ukraine. Uncertainty in global markets has led to investor hesitation, continued inflation, and further disrupted global supply chains. The energy and food production sectors are among the most sensitive and of particular concern. However, reallocation of resources and adjustments to supply chains are pushing demand to other regions. Most bearing manufacturers and suppliers are not affected by economic downturns in specific regions and/or countries. This is because bearings are critical components on which the world is highly dependent. Demand will vary from market to market: high demand in one area can lead to lower demand in other areas.

Environmental issues
With the increasing focus on sustainability and energy efficiency, environmental concerns are likely to play no small role in the future of the global bearing market. Consumers and governments are increasingly aware of the environmental impact of products and production processes, and will therefore turn to more energy-efficient and environmentally friendly (carbon-neutral) bearing products and solutions.

Another area of concern for the bearing market is the use of renewable and recycled materials. There is growing interest in using recycled materials in bearing production as these materials help reduce the environmental impact of the manufacturing process. Additionally, the use of renewable energy in bearing production is likely to become more important as companies seek to reduce their carbon footprint and meet increasingly stringent environmental regulations.

Summarize
Overall, during the COVID-19 pandemic and the ongoing local war situation, the bearing industry is still moving forward with ups and downs. Experts generally believe that the future of the global bearing market is full of exciting opportunities and challenges. Growing demand from emerging markets, including China, is likely to continue to play an important role in driving further growth and innovation in the industry. As many regions and countries continue to develop and industrialize, the demand for bearings and other mechanical components is likely to increase, providing exciting opportunities for manufacturers.
This article was published in the 10th anniversary edition of Bearing News.
Another message to Chinese bearing companies in 2023 (Yang Wensheng):

Facing more challenges, China's manufacturing industry, including bearings, agrees that transformation and upgrading need to be accelerated. At the same time, "If you take action, you are seeking death; if you don't take action, you are waiting for death." This is also a dilemma for many companies. How can enterprises find breakthroughs in transformation and upgrading to cope with traditional challenges such as rising costs and labor shortages, as well as new challenges brought about by trade frictions and century-old changes? I have always believed that the key breakthrough lies in completing the transformation and upgrading from price-winning to value-driven business philosophy.
Although the academic and dictionary definition of the word value itself is very vague in a broad sense, according to my many years of research and summary, the value that manufacturing companies can provide to customers can be very specifically summarized into four categories, namely: 1) Help customers improve The market selling price of its products; 2) helping customers complete market orders faster; 3) helping customers reduce total operating costs; 4) helping customers reduce purchase prices. The "four theories of value" tell us that on the one hand, only when manufacturing companies contribute to customers and solve problems in these four areas can they bring real value to customers and be recognized and paid for by customers. On the other hand, if a business can only contribute to customers in one area, it is only capturing a quarter of the opportunity. In reality, most Chinese manufacturing companies still mainly contribute to customers in the area of price. Once the advantages in this field are lost (for example, due to the impact of tariffs and rising costs), or the focus of market demand shifts from price to other fields, it is natural that the company will be in crisis. In fact, what many overseas companies urgently need now is to no longer just focus on reducing procurement costs in the context of post-epidemic, severe inflation and local wars in the world. The purchasing departments of some large enterprises have even completely removed indicators of supplier price reductions in some periods. What they need more now is to quickly develop and produce products that are urgently needed by the market (requiring suppliers to cooperate with technological innovation and project management, etc.) to seize market opportunities and increase the added value of their products or services (so that they can increase prices for customers); increase supply Chain visibility and compliance, reducing the total operating cost of the entire supply chain (including own production + incoming logistics and warehousing); or to develop more new energy industry products (especially electric vehicles, wind energy, solar energy), so there is an urgent need for low energy consumption , lightweight and insulating bearings and parts with good performance. Of course, some domestic bearing companies still complain that they must continue to reduce prices to maintain business. I think this is mainly because they have not found a way to contribute to customers in the other three value areas or cannot express it clearly to customers in detail.
In view of the current market situation, Chinese bearing companies urgently need to complete the transformation and upgrading from a single price contributor to a comprehensive value contributor better and faster. The "Four Values" can become the theoretical basis and action framework to guide this transformation. We hope that companies will make great efforts to carefully study what specific needs they or their target customers have in these four value areas, how companies can use their own resources to provide the relevant value that customers need most, and how to make customers recognize the value they bring to them – take to quality orders! Regarding how bearing companies can make good use of the four value models and how to develop more and better overseas markets, you are welcome to send specific questions to the official account. We will consider arranging relevant experts to answer or have further exchanges with your company.

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