Abstract
Shifting Production to Low-cost Countries to Offset Price Competition
Domestic hydraulic valve manufacturers face stiff price competition from
overseas manufacturers, especially from those in countries with cost advantages.
Companies have risen to this challenge by improving servo valves and building
new valve manufacturing plants outside North America to benefit from lower labor
costs as well as fewer regulations in those countries. This way, domestic
manufacturers will be able to provide low-priced products of quality comparable
to those currently produced in the United States and Canada. Having
manufacturing plants abroad will also provide exposure to new, developing
markets.
This Frost & Sullivan research examines the North American Hydraulic
Valves Markets. It offers revenue forecasts by market segment and covers key
drivers and restraints affecting market growth. It also provides strategic
recommendations to overcome market challenges. This market has been segmented
into directional, pressure, and flow control valves.
Advanced Controls in Hydraulic Valves Stimulate New Sales
Demand for hydraulic valves is likely to escalate with the incorporation of
newer and more advanced electronic controls. "These new products combine
the force of hydraulics with the intelligence of computers and microprocessors
for improved efficiency purposes," states the analyst. When hydraulic
components interface directly with electronic controllers, it is possible to
eliminate human error in the use of equipment and provide accurate measurements.
Customers benefit from improved efficiencies in plant operations and
energy-saving machinery.
Innovative electronic products in hydraulic equipment and the transition of
mechanical machinery to hydraulic actuation are expected to drive sales of new
valves as replacement of older products becomes more prevalent. "The
electrical controllers can be attachments to the valves, making them more
intelligent and highly controllable," notes the analyst. The diminishing
costs of microprocessors needed to produce the devices are enabling
manufacturers to provide greater value to customers at no extra cost.
Smart Valves Place Manufacturers in the Driver's Seat
The smarter and smaller the valves, the greater their acceptance in the
market. North American manufacturers that have dealt in smart valves have
improved their market share despite the economic slowdown. "As the demand
for sophisticated hydraulics become a trend, an increasing number of
manufacturers will find it commercially viable to produce and market higher
quantities of such valves," comments the analyst. Proportional and
hydroelectric valves segments are likely to register the highest growth.
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