Global Welding Market in Automotive Applications

Welding Manufacturers to Tap into Growth Opportunities in Emerging Geographic Markets

The world market for welding equipment and consumables for automotive applications is strongly influenced by investments in automotive industries. With automotive companies in the United States seeking a bailout, the market may appear to be on a decline over the short term. However, business from other regions, together with spare parts and garage applications, has kept the welding industry afloat in recent times. "There are also growth opportunities in several countries of the Asia Pacific region with hubs like Thailand and China producing larger numbers of both light passenger vehicles and heavy vehicles for energy distribution and cargo haul," notes the analyst of this research. "Currently, the welding industry has good growth prospects. It will have to focus on niche markets, ensure deeper geographic penetration in areas where there is sufficient demand as well as manufacture low-cost but powerful welding tools." "Over the last decade, countries like China, India and Thailand in Asia Pacific and Hungary, the Czech Republic, Romania and Poland in eastern Europe have witnessed strong growth in the automotive sector," remarks the analyst of this research. "The demand for welding equipment and consumables is expected to rise in line with the increase in production output of these automotive manufacturers, despite the global recession." Revenue growth in the global welding market is anticipated to be relatively low over the short term but is set to rise over the long term with higher vehicle manufacturing.

Multi-Pronged Strategy Critical to Cresting Current Crisis in Auto Industry

Automotive manufacturers are now very price-conscious and are strictly monitoring the cost of production. Inevitably, they prefer welding manufacturers who can provide high-quality goods at competitive prices. Accordingly, welding manufacturers will need to reduce their production costs. This is one of the biggest challenges faced by the industry currently. There has been a global increase in the price of nickel, cobalt, aluminium and steel in the last few years and this rise is projected to continue. However, prices are fairly stable at present and the rise in prices is minimal when compared to the past. "Welding manufacturers will have to try to cut down further on their costs in order to remain competitive," advises the analyst. "They should also investigate new, low-cost raw materials that could potentially contribute to further cost reduction." The challenge for welding manufacturers is to expand globally and provide welding equipment and consumables to regions that present growth opportunities. This strategy demands an efficient supply chain. Welding manufacturers should try and meet customers' demands through the optimal use of resources, including distribution capacity and inventory. "Welding manufacturers should establish efficient distribution systems either by having their own distribution agencies or by partnering with local distributors to avoid any bottlenecks in penetrating remote regions," says the analyst. "Delivery process must not only be quick, but also economically feasible, with products being made available at a competitive price." Welding manufacturers have to continually upgrade their technology. They should focus on providing additional training, free installations, workshops, recognising historical customers through awards or excellence programmes, redress grievances and offer quick replacements and spare parts delivery. Welding manufacturers should position themselves as both solution and service provider. They need to improve their service portfolios and broaden their market reach by enhancing their penetration into emerging economies where automotive conglomerates have a sizeable presence.

Market Sectors

Expert Frost & Sullivan analysts thoroughly examine the following market sectors in this research:

• Welding equipment
• Welding consumables

Technologies

The following technologies are covered in this research:

• Arc
• Resistance
• Laser
• Gas
• Friction stir
• Electron beam welding technology
• Solid wires
• Flux cored wires
• SAW wires
• Fluxes
• Stick electrodes