INVESTMENT CASTING MARKET OVERVIEW
- The aerospace & defense segment is expected to reach a revenue of over USD 6.3 billion by 2025.
- The healthcare end user segment is likely to observe an incremental growth of over USD 0.59 billion by 2025 on account of the increased use of investment casting in medical devices.
- The investment casting market in India is projected to register a CAGR of over 2% by 2019–2025, driven by the increased government focus on domestic manufacturing.
- The APAC region is expected to achieve an incremental growth of over USD 1.1 billion by 2025 because of the robust growth of the automotive industry and increased FDI investments in defense and infrastructure.
MARKET GROWTH OPPORTUNITIES
The industry is expected to witness a higher number of transactions with respect to M&A to overcome COVID-19 related economic and consequent demand slowdown. The diversification of the product portfolio is recommended to keep the production lines operating.
From a demand perspective, the aerospace and automotive industry holds over 50% of the share in the investment casting market on account of higher volume and high-quality critical products used in the industries.
Globally, the sales of automobiles, such as passenger cars and medium and large trucks, have fallen. China, the world's largest automaker, is struggling to revamp this drop. Automakers in China faced an average decline of around 9.5% in the sales volume in 2019.
INVESTMENT CASTING MARKET SEGMENTATION
The investment casting demand from the automatic and defense industry is expected to be low in 2020 and will take a minimum of two years to reach the pre-pandemic levels. The aerospace casting industry will be in the red for a long duration than the defense industry (as the defense spending is not dependent on consumer spending). The price escalation by the casting industry is estimated to be a short-term measure to spruce up capital and sustain the operations, which have been shut due to the COVID-19 pandemic.
The demand for investment casting for the medical industry is expected to be volatile during 2020, as there exists low demand for non-critical non-COVID-19 medical devices. On account of the COVID-19 pandemic, the demand for medical devices reduced in H1 2020, and the same is expected to be lower for H2 2020. Several people have delayed their hospital visits and surgical procedures. The demand currently is more for devices related to COVID-19 emergencies.
The demand in the commercial vehicle sector is expected to be low than the passenger vehicle sector. This is mainly attributed to logistics firms holding on to cash for longer sustenance of business and also acquiring used vehicles in place of newer vehicles for any business scale up. Uncertainties continue with COVID-19 infections mounting in several countries of Asia and Latin America.
INSIGHTS BY GEOGRAPHY
North America was the largest market, followed by APAC and Europe. However, APAC is expected to emerge as one of the leading countries during the forecast period. The demand for investment casting in North America is likely to depend on the automotive, aerospace, and IGT industries. The demand for the investment casting process, although impacted by COVID-19 related economic pressure in North America, is expected to recover faster (in some of the components if not all) as it constitutes a key factor part of the overall functioning of any industrial production plant. Post COVID-19, the challenges have further increased for vendors in North America. The industry is expected to witness low production levels in the short term, and profit margins are expected to shrink. With developing countries of APAC facing an uphill task in controlling the spread of the pandemic, end-user sectors are expected to re-strategize. The resulting shift in the supplier strategy is expected to impact the North American investment casting market positively.
INSIGHTS BY VENDORS
The global investment casting market share is highly fragmented, with no global leader providing a full portfolio of products and services across countries. This is mainly due to different regional demands and also the need for proximity to the client’s location. The industry is characterized by the presence of diversified companies at local and regional levels. Not many vendors in the market are investing in advanced technology. Only prominent vendors with deliverables to critical end-users have investments in advanced technology. The procurement of raw materials and the machinery involved in manufacturing are major cost factors. M&A activities are expected to increase as players look to consolidate. The lack of demand on account of COVID-19 is expected to increase consolidation, and at the same time, smaller vendors are looking to exit the high capital intensive market. Vendors must set apart their product and service offerings through a clear and unique value proposition.
The global investment casting market research report includes in-depth coverage of the industry analysis with revenue and forecast insights & competitive landscape for the following segments:
- Aerospace & Defense
- Industrial Machinery & Heavy Equipment
- North America
- South Korea
- Latin America
- Middle East & Africa
- Saudi Arabia
- South Africa