Original Equipment Manufacturers' (OEMs) Shift to Emerging Nations Constricts Development of New Production Facilities in North America
The shift of original equipment manufacturers from North America to other countries that offer lower costs has generated a decrease in manufacturing facilities in North America. Emerging nations, or newly industrialized countries (NIC), offer OEMs an opportunity to significantly reduce manufacturing costs through lowered labor and material costs. This reduces OEM demand for motion control technologies in North America.
The OEMs are seeking component sources closer to the countries where their facilities are located. Domestic manufacturers are finding their customer base shrinking as more companies move their manufacturing sites outside North America. They are also finding they must compete against global manufacturers who are able to sell at a lower price because of the strength of the U.S. dollar.
OEM's Demand for Lower Prices and Shorter Lead Times Hinders the Revenues
In order to stay competitive in the market, OEMs are looking at ways to reduce their costs. One of the ways is to demand lower prices and shorter lead times. This in turn, creates a challenge for manufacturers to meet these requirements. By providing their products at a lower price, manufacturers experience a decrease in their revenues. In order to meet shorter lead time requirements, manufacturers face the challenge of leaning down the production process and getting more efficient equipment to accomplish this. Few companies with deep pockets have opened up plants in Asian countries like India and China where they can produce the products with same specification at a much lower cost and can import them to North America. This one of the methods adopted by few companies to tackle this challenge.
Maintaining Profit Margins When the Price of Raw Materials is Increasing
The price increase of raw materials like steel, copper and aluminium, has heavily affected the profit margins of the motion controls manufacturers, especially the stepper motors and servo motors manufacturers, which form an integral part of the motion controls market. The price of commodities increased drastically in 2003 and 2004, and has seen an upward trend in 2005 also. This happened because of the global economic recovery and heavy intake of these commodities by China. This increase in commodity price has greatly affected the profit margin of the motor manufacturers due to the increase in production costs.
To compensate for the increase in production costs the motor manufacturers had to increase their product price, which made it difficult to maintain customer satisfaction. So motor manufacturers were forced to increase their prices slightly during the second quarter of 2004 just to survive and meet their break-even point, with the hope that the price of steel, aluminium, and copper would go down soon. There was another price increase of an average of 8.0 to 9.0 during the last quarter of 2004. This move was by all the motor manufacturers, who could not wait anymore for the commodity price to go down. With continued increases in price, the manufacturers foresee a possibility of reduction in the sales volume.
Benefits of this Service
Obtain Suggestions for Market Growth
The study inspects possibilities of the best possible way for existing vendors to create a path for themselves in the industry and this includes the formation of strategic alliances and partnerships
Obtain Revenue Analysis
The performance of each product segment has been evaluated in terms of the revenues and on the basis of the market trends a forecasted picture has been created in the study. With this information, vendors will be in a better position to align the company’s objectives with the industry’s rate of progress.
Market Sectors
Frost & Sullivan’s expert analysts thoroughly examine the following sectors in this research:
Motion Controls
Feedback Elements
Controllers Markets
What's Included
Discussions of technology related to Motion Control, Feedback Elements, and Controllers Markets
Trends by product types discussed
Revenue forecasts for each segment for the next 7 years
1. Executive Summary 1. Market Overview 1. Introduction 2. Competitive Analysis 2. Major Research Findings 1. Opportunities and Forecasts 2. Market Segment Analysis 3. End User Market Analysis
2. Total North American Motion Control Feedback Elements and Controllers Market 1. Overview 1. Introduction 2. Challenges 3. Market Drivers 4. Market Restraints 5. Market Engineering Analysis 2. Forecast and Trends 1. Total Market Revenue Forecast 2. Total Market Trends 3. Total Market End User Analysis 4. Total Market Competitive Structure 3. Frost & Sullivan Awards for North American Motion Control Feedback Elements and Controllers Market 1. Customer Value Leadership
3. North American Servo Motors and Servo Drives Market 1. Total Market Overview 1. Introduction 2. Market Drivers 3. Market Restraints 4. Market Engineering Analysis 2. Total Market Forecast and Trends 1. Total Servo Motors and Servo Drives Market Revenue Forecasts 2. Total Servo Motors and Servo Drives Market Competitive Analysis and End User Analysis 3. Total Servo Drives Market 1. Overview 2. Market Trends 4. Total Servo Motors Market 1. Overview 2. Market Trends
4. North American Stepper Drives and Stepper Motors Market 1. Total Market Overview 1. Introduction 2. Market Drivers 3. Market Restraints 4. Market Engineering Analysis 2. Total Market Forecast and Trends 1. Total Stepper Drives and Stepper Motors Market Revenue Forecasts 2. Total Stepper Drives and Stepper Motors Market Competitive Analysis and End User Analysis 3. Total Stepper Drives Market 1. Overview 2. Market Trends 4. Total Stepper Motors Market 1. Overview 2. Market Trends
5. North American Feedback Elements Market 1. Total Market Overview 1. Introduction 2. Market Drivers 3. Market Restraints 4. Market Engineering Analysis 2. Total Market Forecast and Trends 1. Feedback Elements Market Revenue Forecasts 2. Feedback Elements Market Trends 3. Feedback Elements Market Competitive Analysis and End User Analysis
6. North American Controllers Market 1. Total Market Overview 1. Introduction 2. Market Drivers 3. Market Restraints 4. Market Engineering Analysis 2. Total Market Forecast and Trends 1. Controllers Market Revenue Forecasts 2. Controllers Market Trends 3. Controllers Market Competitive Analysis and End User Analysis
7. Appendix 1. Decision Support Database 1. Crude Steel Production 2. Copper Mine Production 3. Coal Production 4. Hydraulic Cement Production 5. Paper and Paperboard Production 6. Pulp and Paper Mills
List of Figures
SEGMENT 2
Total Motion Control, Feedback Elements and Controllers Market: Impact of Industry Challenges (North America), 2006-2012
Total Motion Control, Feedback Elements and Controllers Market: Impact of Industry Drivers (North America), 2006-2012
Total Motion Control, Feedback Elements and Controllers Market: Impact of Industry Restraints (North America), 2006-2012
Total Motion Control, Feedback Elements and Controllers Market: Percent of Revenues by Product Type (North America), 2002-2012
Total Motion Control, Feedback Elements and Controllers Market: Revenue Forecasts (North America), 2002-2012
Total Motion Control, Feedback Elements and Controllers Market: Percent of Revenues by End User (North America), 2002-2012
Total Motion Control, Feedback Elements and Controllers Market: Market Share Trends of Major Market Participants (North America), 2005
SEGMENT 3
Servo Motors and Servo Drives Market: Impact of Industry Drivers (North America), 2006-2012
Servo Motors and Servo Drives Market: Impact of Industry Restraints (North America), 2006-2012
Servo Motors and Servo Drives Market: Revenue Forecasts (North America), 2002-2012
Servo Motors and Servo Drives Market: Market Share Trends of Major Market Participants (North America), 2005
Servo Motors and Servo Drives Market: Percent of Revenues by End User (North America), 2002-2012
Servo Drives Market: Revenue Forecasts (North America), 2002-2012
Servo Motors Market: Revenue Forecasts (North America), 2002-2012
SEGMENT 4
Stepper Drives and Stepper Motors Market: Impact of Industry Drivers (North America), 2006-2012
Stepper Drives and Stepper Motors Market: Impact of Industry Restraints (North America), 2006-2012
Stepper Drives and Stepper Motors Market: Revenue Forecasts (North America), 2002-2012
Stepper Drives and Stepper Motors Market: Market Share Trends of Major Market Participants (North America), 2005
Stepper Drives and Stepper Motors Market: Percent of Revenues by End User (North America), 2002-2012
Stepper Drives Market: Revenue Forecasts (North America), 2002-2012
Stepper Motors Market: Revenue Forecasts (North America), 2002-2012
SEGMENT 5
Feedback Elements Market: Impact of Industry Drivers (North America), 2006-2012
Feedback Elements Market: Impact of Industry Restraints (North America), 2006-2012
Feedback Elements Market: Revenue Forecasts (North America), 2002-2012
Feedback Elements Market: Market Share Trends of Major Market Participants (North America), 2005
Feedback Elements Market: Percent of Revenues by End User (North America), 2002-2012
SEGMENT 6
Controllers Market: Impact of Industry Drivers (North America), 2006-2012
Controllers Market: Impact of Industry Restraints (North America), 2006-2012
Controllers Market: Revenue Forecasts (North America), 2002-2012
Controllers Market: Market Share Trends of Major Market Participants (North America), 2005
Controllers Market: Percent of Revenues by End User (North America), 2002-2012
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