US Gear Demand to Exceed $30 Billion in 2013

US demand for gears and gear assemblies is forecast to increase 3.9 percent per year to $30.1 billion in 2013.  This will be a considerable improvement from the less than one percent yearly growth posted during the 2003-2008 period.  Gains will be supported primarily by rebounding levels of motor vehicle production.  In 2008, over three-quarters of all gear sales were motor vehicle related, despite unusually low levels of vehicle production.  Gear manufacturers will also benefit from value gains derived from product improvements and upgrades, such as transmissions with higher numbers of speeds.  Increased sales opportunities will also present themselves in the relatively small but rapidly expanding wind turbine market, in which large, high-value gearboxes are required.  Output in the aerospace equipment and machinery industries is expected to advance modestly from its level a decade earlier, which will restrain gear demand in those markets to some degree. These and other trends, including market share and product segmentation, are presented in US Gears, a new study from The Freedonia Group, Inc., a Cleveland-based industry research firm.

The motor vehicle market for gears and gear assemblies is forecast to record the fastest gains of any market through 2013, advancing 4.7 percent per year to $23.8 billion.  Trends within the automotive industry will also support increased sales of higher-value gear products, as transmissions will generally feature more speeds, power accessories will require more gearmotors, and more cars will feature four-wheel-drive systems, which require the use of differentials.  Transfer case sales will also be boosted by strong growth in medium and heavy vehicle production.  However, several emerging trends in the motor vehicle industry will limit gear demand increases.  Continuously variable transmissions, which do not require gears, are rapidly gaining a foothold in the automobile segment of the industry.  Furthermore, while not an immediate threat, steer-by-wire technology could eventually limit the use of gears in steering assemblies.

Within the individual gear category, helical and bevel gears will register the strongest gains.  Helical gears will continue to displace spur gears in a number of applications, while bevel gear manufacturers will take advantage of high-value sales opportunities in the aerospace market.

Original equipment manufacturing applications, which accounted for nearly 70 percent of all gear sales in 2008, will outpace aftermarket demand increases through 2013 as motor vehicle manufacturing recovers.  Aftermarket demand will be restrained by the greater durability of many newer gear products, as well as by moderating growth in the US motor vehicle park. 

The Freedonia Group is a leading international business research company, founded in 1985, that publishes more than 100 industry research studies annually. This industry analysis provides an unbiased outlook and a reliable assessment of an industry and includes product segmentation and demand forecasts, industry trends, demand history, threats and opportunities, competitive strategies, market share determinations and company profiles.