The research report on the precision parts market covers market sizing and forecast, market share, industry trends, growth drivers, and vendor analysis. The market study includes insights on segmentation by end-users (watches, healthcare, aerospace, electronics and semiconductors, automotive, and others) and geography (APAC, Europe, North America, Latin America, and MEA).
The rise of industry 4.0 and Internet of Things is likely to drive the precision parts manufacturing market
The precision parts market is set to display an impressive growth during the forecast period with the increased automation expenditure, increased diversity of substrate materials, and the rise of industry 4.0, and Internet of Things (IoT).
The US, along with a few European economies such as France, Italy, and Germany, is set to expand their manufacturing base in emerging economies, particularly in APAC. Over the past few decades, emerging economies in APAC, which are characterized by high economic growth and massive high consumption with increasing industrial and manufacturing competitiveness, have challenged the dominance of developed countries in global manufacturing. Hence, the emergence of APAC as a manufacturing hub is expected to augur well for the precision parts manufacturing market.
Further, 3D printing has started to play a decisive role in the global precision parts market. Additive 3D printing technology reduces the overall material waste, cost, and time in the manufacturing sector. The automotive industry and the healthcare sector are the prominent end-users of printing technique. Further, open architectures and rising subscription-based CAD software are emerging trends, which are expected to change the precision machining outlook. The global precision parts market is expected to grow at a CAGR of around 12% during the period 2018–2024.
This market research report includes a detailed segmentation of the market by the end-users and geography.
Precision Parts Market: End-users
Stringent regulations and technological transformations in the automotive industry are contributing to the growth of the precision parts market
Stringent regulations and technological transformations in the automotive industry are vital factors contributing to the growth of the market. The automotive segments witnessed the largest market share in 2018. While autonomous driving and new mobility solutions are expected to affect traditional vehicle manufacturers, it is seen as an opportunity for precision parts manufacturers. Hence, restructuring agreements between auto component suppliers and automobile manufacturers are expected to affect the growth of the segment.
Europe and North America are facing increased competition from APAC-based vehicle manufacturers. China, Taiwan, and the US are expected to increase their spending on fab equipment by over 15−25%. The growth of the fabrication industry in Taiwan and South East Asia has accelerated the growth of precision parts manufacturing market in APAC, which is boosting the electronics and semiconductors segment. The market size of consumer electronics is expected to continue its momentum during the forecast period. Further, China, Korea, and Japan are aiming to expand its facilities by 2020.
Germany, France, Italy, the UK, and Spain are the significant players in the aerospace precision market. The increased demand for commercial and defense aircraft is driving the precision parts market in the region. Further, the healthcare segment is undergoing rapid transformations, which are mainly driven by advancements in IoT and other factors such as scalability, connectivity, security, and sustainability practices.
Precision solutions are expected to emerge as game changers in several domains such as virtual surgical planning, design, and manufacturing of medical tools, dental component manufacturing, anatomical models, and laboratory equipment and bionics. The US and Western Europe are the major manufacturing hubs; however, China is expected to grow its share in the global market.
Precision engineering is extensively deployed across the aerospace industry with thousands of components sourced and assembled from several hierarchies. These components are often “life-critical” and need to meet precise specifications with required tolerance thresholds. Hence, manufacturers with historical results in timely delivery and the availability of advanced machinery at the manufacturing facility have a better chance of being provided with orders from the aerospace industry.
The increased adoption of automation in the manufacturing of watches and the usage of new metal and alloys have significantly contributed to the increased growth of precision parts. Japan and Hong Kong are the largest watchmaking countries in the APAC region.
The precision parts market by other segments comprises construction, defense, marine and offshoring, heavy equipment, and power tools. The demand for precision products in marine and offshore drilling industry is expected to remain stable over the forecast period.
Precision Parts Market: Geography
Aerospace, electronics and semiconductor, and automotive industries have contributed to the growth of the APAC precision parts manufacturing market
APAC was leading the global precision parts market in 2018 with the increasing growth in consumption. Aerospace, electronics and semiconductor, and automotive industries have tremendously contributed to the growth of the market in the APAC region. Vendors are focusing on the expansion of facilities in APAC and South America due to significant growth potential for high-precision products.
In North America, the easy availability of raw materials, along with easy access to the largest consumer markets, US and Canada, has increased the growth of value-added manufacturing output. The demand for precision manufacturing in the US is driven by the massive size of end-user industries such as automotive, aerospace, defense, marine, and healthcare. The adoption rate of new machinery is positively affecting the market in the region.
The European precision parts market is large and is driven by the demand from key end-user industries in Germany, the UK, Italy, and France. With significant R&D budgets and the presence of eminent players, precision parts manufacturing market in Europe is growing significantly. Automotive, healthcare and aerospace industries are expected to witness unprecedented growth during the forecast period.
In Latin America, the precision parts market is likely to be driven by expansionary investments in infrastructure and potential synergistic demands from sectors such as automotive, power transmission. The region’s construction and the infrastructural outlook is likely to observe an expansionary demand for industrial spares and precision parts. Recent reforms related to the energy sector have received an investment of around $80 billion, which is likely to increase the demand for engineered components in the region.
Small and medium enterprises dominate the precision parts manufacturing industry in MEA. The market mainly depends on the economic growth of Middle Eastern countries such as Turkey, Saudi Arabia, and Israel. Further, free trade zones, improvements in port infrastructure, and low taxation policies are expected to bring increased investment to the MEA region, thereby driving the market.
Key Countries Profiled
Key Vendor Analysis
The precision parts market is highly fragmented with no major vendors having a significant share in the market. They are mainly located near manufacturing hubs to collaborate for the design and development of precision parts. The vendor's selection criteria mainly depend on the access to the raw material and the production line of the manufacturing facility. The market is characterized by vendors that are either application-specific vendors or product-specific vendors or service multiple vendors at any point in time.
Further, the market is divided into developing and developed regions, with high variation in demand and supply. Developing regions have primitive machinery and unsophisticated manufacturing techniques. The precision parts manufacturing market is not known for mergers and acquisitions and is limited to the specific regions.
Other Prominent Vendors Aequs, Armor Meca, Beyonics, BonfiglioliRiduttori, Dana Brevini Power Transmission, Greystone, Gudel, Hoppe Technologies, Mecachrome Group, Precision Castparts Corp (PCC), Sigma Components, Tessa Precision Products, and WSI Industries.
Key Market Insights
The report provides the following insights into the precision parts market for the forecast period 2019–2024.
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