World Gear Demand to Reach $169.5 Billion in 2013

Global demand for gears and gear assemblies is forecast to climb 4.7 percent annually through 2013 to $169.5 billion.  Market gains will be driven by rising motor vehicle production, ongoing economic growth, increased manufacturing output, and a shift in the product mix toward more expensive, energy-efficient units such as seven- and eight-speed automatic transmissions.  Strong demand in relatively small but fast-growing markets like wind and solar energy will also contribute to gear sales advances.  Demand in developing parts of Asia, Eastern Europe, the Africa/Mideast region, and Central and South America will outpace product sales in the US, Western Europe and Japan. These and other trends, including market share and product segmentation, are presented in World Gears, a new study from The Freedonia Group, Inc., a Cleveland-based industry research firm.

China and India will register some of the strongest market advances.  China is expected to account for one-third of all additional gear demand through 2013 and will surpass Japan to become the second largest national market behind the US.  By 2018, total gear sales in China will exceed product demand in the US.  Market growth is also expected to be healthy in Indonesia, Thailand, Iran and Russia.

Although advances will be less robust than in developing countries, gear product demand in the US and Western Europe will increase as well, spurred by renewed strength in motor vehicle output following a period of decline.  Gear sales in Japan, on the other hand, will slow noticeably, negatively impacted by a drop in automotive industry production and continued sluggishness in capital equipment markets.  However, a more favorable outlook for machinery manufacturing will provide some impetus to growth, and the large numbers of gear-containing equipment in use will help support aftermarket gear demand.

In 2008, seven-tenths of all gear product sales were automotive related, with motor vehicle transmissions alone accounting for 45 percent of the entire gear market.  Transmission demand will also grow at a faster rate than accessory, driveline, steering and other motor vehicle gear sales through 2013, bolstered by an upturn in industry output in the US, where more costly automatic transmissions are used in the vast majority of vehicles.  Machinery will remain the second largest gear market but will post somewhat slower gains.  However, suppliers will benefit from industrialization activity in China and other developing areas, fueling demand for gears used in construction and manufacturing machinery. 

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.