Industry trend: Focus on automation, centralization, mechanical and electrical integration, domestic substitution of four major trends

(1) Benefiting from the aging population and the trend of industrial automation, the scale of the industry continues to expand

Population aging, industrial automation trend for the reducer industry to bring long-term development space. In May 2021, the National Bureau of Statistics released the data of the seventh National population census. The number of people aged 60 or above was 264 million, accounting for 18.70% of the total population, an increase of 5.44 percentage points over 2010. The introduction of the three-child policy shows that under the rapid economic development, the population structure of the domestic labor force is facing the transition, or will step into the aging society. In order to reduce labor costs and improve production efficiency, enterprises are constantly expanding the covering surface of machinery and equipment in the production process to promote industrial automation. According to industrial Control network, the market size of industrial automation parts in China will reach 253 billion yuan in 2021, with a growth rate of about 23%, the highest in the past decade. Among them, the industrial automation parts market covers all kinds of drivers, relays, contactors, instruments, valves and other basic parts used to achieve industrial automation.

Under the trend of industrial automation, the demand for reducer will be greatly improved. As one of the essential basic components of industrial power transmission, the reducer is widely used in the machinery that needs to be driven. Take automated stereoscopic warehouse as an example, the main body of automated stereoscopic warehouse is composed of roadway type stacking crane, conveyor system, automatic sorting system, etc. The stacking crane walks through the roadway between the shelves to complete the storage and pick-up work. The conveyor system is the main peripheral equipment of the stereo warehouse, which is responsible for transporting goods to and from the stacker. The working process of these machines requires a reducer. Therefore, the trend of industrial automation has brought new impetus for the development of the reducer industry.

(2) The speed of industry integration is accelerated, and the market share of leading enterprises is increased

The market share of domestic leading enterprises is increasing obviously. As small and medium-sized enterprises in the industry find it difficult to meet the ever-increasing capital expenditure needs, and constantly improving technology and quality requirements, downstream customers, especially large customers, are increasingly inclined to buy products produced by large enterprises with guaranteed quality and service. Industry resources further concentrated to the leading enterprises, industry integration accelerated. Based on the estimated 39.5% share of general gear reducer in the overall gear reducer market in 2021, the market share of the three leading general gear reducer enterprises, Guomao Group, Ningbo Dongli and Kone Technology, increased from 7.1% to 10.1% in the domestic general gear reducer industry from 2019 to 2021. This indicates that large domestic manufacturers are integrating the domestic general reducer market, and the concentration is rising obviously.

(3) Product technology progress promotes the domestic substitution trend of high-end universal gear reducer
The performance of domestic leading brand products has approached or reached the level of international famous brand benchmarking models. In recent years, the industry’s leading enterprises attach importance to research and development investment, independent innovation, and continue to promote the development and upgrading of new products, significantly narrowing the gap with foreign enterprises in the structure design, quality control, reliability and other aspects of similar products, domestic substitution continues to deepen.
(4) The trend of modularization and mechatronic integration is obvious, and the industry giants have laid out the field of motor and controller
Mechatronics strategy is an important extension of modular design. On the basis of the reducer, the wave of electromechanical integration will extend the idea of modular design to the upstream and downstream of the reducer industry chain. Mechatronic integration can help enterprises to integrate their own reducer, motor, controller and other matching components into one product, reduce the number of interfaces, and minimize the connection cost. By providing a series of products including mechatronic drives, frequency converters, control software technology and so on, traditional reducer enterprises can realize the transformation into an automation solution provider, by providing solutions to downstream customers to sell products in complete sets, promote the development of the enterprise’s various product lines, while increasing the profit level and volume. A wide range of options and accessories bring a high degree of flexibility, enabling each customer to quickly tailor personalized solutions to their desired scenarios, enhancing customer engagement.