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Industrial Products & Services Industry Outlook
+ Case studies of Spire's work in Industrial Products & Services
Tough times have arrived for the leading producers of industrial equipment as the full effects of the economic slowdown are felt by the industry. Demand for capital equipment is highly sensitive to economic swings and, in the current climate, this is worsened by lack of access to credit. However pockets of opportunity exist in low-income emerging markets where manufacturing investment continues, albeit at a smaller level. Vendors can also look to the market for servicing and optimizing existing capital goods.
As manufacturers continue to pursue a “China plus 1” strategy in organizing production, economies with low cost structures, such as Vietnam or inland China, are at an advantage over the coastal regions of China where costs are higher and have been on the rise. Other countries with similar potential include India, Indonesia and Bangladesh, albeit to a lesser extent given regulatory, political or infrastructural concerns.
The hiatus in capital expenditure will shift more attention to after sales service, as customers seek to lengthen the lifespan of existing equipment. Forward-looking vendors are increasingly positioning themselves as total solution providers, offering software and services to optimize both their own and their competitor’s plant and equipment. Stripped down versions of products and second-hand or refurbished machines may become in demand.
‘Green’ manufacturing has also gained traction, due to regulatory push factors. Industrial companies are faced with growing pressure to establish sustainable manufacturing operations, which will drive demand for technologies providing de-sulphurization, carbon capture and use of cleaner fuels such as natural gas.
In light of the slowing economy, Asian governments are pumping investment to bolster targeted industries, which are poised for growth in capital goods. Incentives are being dangled to attract investment into sectors such as biotechnology in Thailand and Singapore and photovoltaic cell production in Hong Kong and Shenzhen. South Korea also plans to develop Gimje into a center for auto parts, machinery and reusable energy with a newly designated free economic zone in December 2008.
There will be renewed emphasis on quality with the recent high-profile product recalls casting doubts over manufacturing standards in Asia. Governments will impose stricter regulation on safety standards in response, creating new demand for high quality industrial equipment.
In today's highly competitive environment, industrial companies and their suppliers need to exploit new niches and offer new solutions to enable their customers to cope with the most challenging environment for export-oriented manufacturing in a new generation.
Spire’s industrial products & services expertise
Spire has worked with many of the world’s leading industrial vendors to develop country and product launch strategies, implement strategic reviews of sales and marketing, evaluate potential importers as well as benchmark competitor products and pricing.
Our work in the industrial products and services space has addressed products ranging from environmental chambers, industrial compressors, hand-held tools and diesel generators to weighing equipment and clean room engineering.
Case Studies:
To request more information on our research and consulting services in the industrial products & services industry, please contact either our country offices or email info@spireresearch.com.
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