The global precision parts market size is projected to reach USD 300 billion by 2025, anticipating a growth rate of 10% during 2020-2025. The market observes growth on account of the increase in industrial automation and innovation in the healthcare and medical devices industry. The global industrial automation market is growing continuously as the demand for integrated and scalable products is at an all-time high. Industries across the world are witnessing a shift to digitalization in the production line. Factories are no longer run at the surface level. Still, they need to collect data from different sensors to measure throughput, and systems need to provide analysis in real-time and controls for optimized performance.
One of the key sectors driving innovation in the healthcare and medical devices industry is micro-manufacturing. The demand for minimally invasive curative and diagnostic procedures is growing exponentially as medical service delivery organizations and patients are striving to reduce operational and recovery times and increase the accuracy of diagnosis. As technology providers are increasingly forging partnerships with medical device OEMs, there arises a need for highly optimized solutions. However, the demand for key components and spare parts is set to grow high, facilitating the easy availability of precision parts.
- The automotive segment is expected to reach over $65 billion by 2025. This is on account of the availability of supportive government policies, an increase in environmental awareness, a rise in petrol prices, and the introduction of stringent emission norms.
- The healthcare segment is likely to grow at a CAGR of approx. 11% during the period 2019–2025. The growth is due to the accelerated growth of minimally invasive surgery solutions.
- The APAC region is projected to reach approx. $150 billion by 2025. The growth is driven by the tremendous growth of precision parts manufacturing in aerospace, electronics and semiconductor, and automotive industries in the region.
- North America is likely to grow at the highest CAGR of close to 11% by 2025. This is due to increased automation in the US market and the high adoption of precision manufacturing in the automotive sector.
PRECISION PARTS MARKET SEGMENTATION
This research report includes a detailed segmentation by
INSIGHTS BY END-USERS
Automotive: The increased vehicle demand, especially in emerging markets such as Asia and Africa and the introduction of stringent vehicle regulatory compliance, are major factors that are driving the spares and automotive precision components market. This development is increasing the requirement for precision parts engineering facilities to accommodate the high demand. However, the trade spat between the US and China is expected to have an impact on shorter timelines.
Impact of COVID-19: Automobile sales are expected to be volatile due to lockdowns and the implementation of safety measures. The effect of the pandemic is expected to be high on the segment. The supply chain has been disrupted in H1, 2020; hence, a realignment of contracts is expected in the auto industry.
Electronic and Semiconductor: The trade dispute between China and the US has been impacting the semiconductor market as most companies in Taiwan and China cater to US clients. Trade negotiations between the countries have been going on continuously, and the last two years have been dynamic due to tariff wars, and restrictions on technology usage. Sourcing and production have been re-assessed by the electronics and semiconductor industry as it is expected to observe breather in trade concerns between China and the US.
Impact of COVID-19: There exists a high likelihood of supply disruptions in the semiconductor industry until the end of 2020. China is one of the largest players in the semiconductor industry. The precision parts and products requirement is significant; however, the availability of the same has been disrupted since the outbreak of COVID-19 in APAC.
Healthcare: The sector is undergoing a rapid transformation driven by advances in IoT and its focus on scalability, connectivity, security, and sustainability. The accelerated growth of minimally invasive surgery solutions has given rise to many medical equipment of varied designs and shapes, which contribute to the growth of precision part manufacturing in the sector.
Impact of COVID-19: The global medical devices market has been pegged to cross the $500 billion market by the end of 2020. The outbreak of COVID-19 has led to high demand for healthcare devices across the world. With healthcare manufacturing categorized as essential service, the industry demand for precision parts has been the highest compared to other industries since the eruption of the pandemic. The US and Western Europe are the major manufacturing centers for medical devices. However, COVID-19 related supply chain disruptions in the US and Western Europe have led China to emerge as a major manufacturer, increasing its market share in the production capacity.
Aerospace: The slowdown and disruption of air traffic due to the pandemic has a high impact on the aerospace industry. Passengers are deferring air travel; hence new aircraft deliveries are currently on hold. High capital requirements characterize the aerospace industry; however, with the declining demand, concerns due to liquidity are flagged. Precision parts manufacturing is expected to bear the brunt of low demand and deferred project delivery. With spare parts requirement also drastically reducing on account of non-operations, the precision parts market is affected on a broader scale.
Impact of COVID-19: The outbreak of the pandemic put a complete halt to airline operations across the world. Thousands of carriers grounded their fleet, and many new purchases were put on hold in Q1 2020. The ripple effect had many airlines and airline manufacturing companies staring at bankruptcy. Boeing, especially, had a challenging year in 2019 on account of grounding its 737 Max due to security concerns. The recovery in 2021 is expected to be slow. Commercial international flights are yet to resume operations in several countries as of July 2020.
INSIGHTS BY GEOGRAPHY
The market growth rates in APAC are truncated on account of COVID-19 in several end-user sectors. The growth of the APAC precision parts market is challenged by the lack of technological advances in the manufacturing industry. The upgrading of technology is limited to a few major players in the industry. The impact of labor shortage, productivity, strikes, and job cuts will be high during the period 2020–2025, as the shift toward automation, will exert pressure on the APAC labor-intensive market. Automotive, electronics, and semiconductor industries hold over 40% of the precision parts market shares. The automotive industry outlook is strengthened on account of the abolition of tariffs on imported completely built-up vehicles. The growth of light vehicle sales was affected across the globe in 2019 and also in H1 2020, and APAC took a major bow on account of slowdown in the auto market of India. Precision parts manufacturing companies in India are increasingly getting advance due to the well-established IT services industry in India, which is aiding the design and development of precision manufacturing techniques and products.
INSIGHTS BY VENDORS
The global precision parts market share is highly fragmented with no major vendors having a significant share in the market. Vendors are mainly located near the manufacturing hubs to enable collaboration on the design and development of precision parts. A downturn in one of the end-market categories will not impact the overall market as many vendors are not into servicing a single end-market. The market is characterized by vendors that are application-specific, product-specific, or multiple-service vendors at any point in time.
The precision parts market research report includes in-depth coverage of the industry analysis with revenue and forecast insights for the following segments:
Segmentation by End-user
- Light Vehicles
- Two-wheelers & Three-wheelers
- Light, Medium, & heavy Commercial Vehicles
- Medical Imagining
- Patient Monitoring
- IVD Analyzers
- Electronics & Semi-conductor
- Semiconductor Industry
- Electronic Industry
- Watchmaking Industry
- Industrial Equipment
- Heavy Equipment
- Marine & Offshoring
- Power Tools
- Electric Industry
- North America
- South Korea
- Latin America
- Middle East & Africa
- Saudi Arabia