Compressors are mechanical devices that are used to increase the pressure of air, refrigerants, and other gases. They have widespread applications in commercial and industrial HVAC systems, refrigeration, and gas transmission. Compressors play a vital role in air conditioning systems by cycling refrigerants at high pressures and temperatures, thus allowing heat exchange and cooling. Rapid industrialization and commercialization across developing regions have necessitated increased use of air conditioners for process cooling and ambient temperature control in workplaces. Furthermore, rising disposable income has augmented the sales of household refrigerators and air conditioners.
The global Compressor Market is estimated to be valued at US$ 42.6 Bn in 2023 and is expected to exhibit a CAGR of 5.1% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Opportunity:
The growing need for commercial and industrial air conditioning across manufacturing plants, warehouses, offices, hospitals and other establishments is estimated to drive the demand for compressors. Developing regions in Asia Pacific and Middle East are witnessing rapid infrastructure development which will necessitate greater installation of HVAC systems powered by compressors. Moreover, rising construction of cold storage facilities and adoption of food retail chains will augment the sales of commercial refrigeration compressors. Government initiatives to boost manufacturing industries and favorable FDI policies are fostering industrialization, thus propelling the compressor market growth.
Porter's Analysis
Threat of new entrants: The compressor market requires high R&D investment and capital costs to maintain modern technologies and meet global standards. This poses high entry barriers for new players.
Bargaining power of buyers: The presence of numerous compressor manufacturers allows buyers to negotiate on prices. However, customized solutions per project requirements reduce buyers' ability to compare easily.
Bargaining power of suppliers: Major raw material suppliers like steel have established global presence. This grants them bargaining power over manufacturers depending on a single or few suppliers.
Threat of new substitutes: Compressor technology faces low threat as they serve critical industrial processes. However, energy-efficient alternatives can displace outdated compressor models.
Competitive rivalry: The global compressor market sees intense competition among leading global players. Manufacturers differentiate based on efficiency, IoT/AI capabilities, service quality, and competitive pricing.
SWOT Analysis
Strengths: High demand from industries supports stable revenues. Leading brands have strong R&D and talent to deliver efficient solutions.
Weaknesses: Significant investments required to adopt new technologies like IoT/AI. Vulnerability to economic cycles affects project order volumes.
Opportunities: Growth in process industries and focus on energy efficiency drive sales opportunities. Emerging regions expanding industrial infrastructure offer high growth.
Threats: Trade conflicts and supply chain disruptions impact manufacturing costs. Stricter emission norms can penalize products not aligned with sustainability.
Key Takeaways
The global compressor market is expected to witness high growth at a CAGR of 5.1% during the forecast period of 2023 to 2030. Rising demand from manufacturing industries like oil & gas, power generation, chemical & petrochemicals is a key growth driver. The market size for compressors was valued at US$ 42.6 billion in 2023.
Regional analysis: Asia Pacific dominates with over 35% share led by China, India, Indonesia, and other developing countries rapidly boosting industrialization. The region's market is projected to grow the fastest during the forecast period due to ongoing investment in new plants and infrastructure expansion across sectors.
Key players: Key players operating in the compressor market are Aerzener Maschinenfabrik GmbH, Ariel Corporation, Atlas Copco AB, Baker Hughes Co., Bauer Compressors Inc., Burckhardt Compression Holding AG, Ebara Corporation, Ingersoll Rand INC, Siemens Energy AG, Sulzer AG. The top five players namely Atlas Copco, Ingersoll Rand, Siemens, Elgi Equipments, and Kaeser Kompressoren together accounted for over 30% of the global revenue share in 2023.
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