Asia-Pacific Compressor Market Overview
Asia-Pacific compressor market was valued at $18.0 billion in 2017 and is forecasted to register a CAGR of 4.0% during 2018–2023. Growing automotive and HVAC market in the region predominantly in China, India, and South Korea, coupled with growing food & beverage industry buoyed the market positively.
Based on compressor type, Asia-Pacific compressor market is categorized into positive displacement and dynamic compressors. Positive displacement compressor category accounted for larger revenue share in 2017, and is expected to lead throughout the forecast period as well, primarily due to growing demand for rotary type of compressors. Positive displacement type of compressors used for most applications including industrial manufacturing, HVAC-R, automotive, food & beverage, power, construction, and minor applications in the industry including plant air and instrument air.
Based on positive displacement compressor type, Asia-Pacific compressor market is categorized into rotary and reciprocating compressors. Out of these two types, rotary category accounted for largest market share in 2017, predominately attributed to the growing demand for scroll compressors from automotive and HVAC-R applications. Also, efficiency plays a significant role in compressor’s overall cost, as more than 75% long term-cost arises from energy usage, resulting increased adoption for screw compressors.
Based on lubrication type, Asia-Pacific compressor market is split into oil-free and oil-flooded compressors. Oil-flooded compressor category held major market share in 2017, as it is more preferred by the end-users, owing to its ability of providing high pressurized air when compared to oil-free compressors. Oil-free compressors are not completely hermetically sealed due to the absence of oil; however, oil-free compressors are being increasingly used in applications such as food & beverage industries and hospitals; where the clean air is of the utmost importance. Surging growth in food & beverage, and healthcare industries in APAC is expected to support the growth of oil-free compressor category.
Based on application, Asia-Pacific compressor market is categorized into construction, power, industrial manufacturing, HVAC-R, chemical & cement, oil & gas, automotive, food & beverage, textile, and others. Out of these, automotive category held highest market share in 2017, majorly due to increasing production of motor vehicles, predominantly electric vehicles to cater to customers’ rising demand. However, HVAC-R application is expected to provide lucrative opportunities in the forecast period, due to increasing construction activities particularly in commercial sector. Moreover, rising tourism is expected to increase the construction of hotels and food outlets.
Asia-Pacific Compressor Market Dynamics
The region is exhibiting positive growth in demand for oil free compressor, primarily due to increasing sale of electric vehicles. Oil free compressor is suitable for electric vehicle, as it eliminates oil contamination of different parts of the vehicle and ensuring replacement cost is eliminated. Hence, the implementation of oil-free compressor in electric vehicles is posting higher demand. In addition, due to oil-free air technology, oil-free compressors do not produce oil-contaminated condensate. Thus, this type of compressor is also eco-friendly. As a result, oil free compressor is trending in Asia-Pacific compressor market.
Also, growing energy concern has led to increased demand for for energy efficient compressors. Several countries in APAC such as China and India are developing energy efficiency programs to conserve energy. For instance, in 2018, to scale up India’s energy efficiency program, EESL and World Bank signed a $220 million loan agreement, with $80 million guarantee pact. As a result, users of compressors in APAC are demanding compressors that are designed to reduce energy consumption. Thus, energy efficient compressors are trending in the Asia-Pacific compressor market.
Asia-Pacific compressor market is recording potential rise in infrastructure spending. Due to rapid urbanization in the region, demand for more sophisticated infrastructure is increasing year-over-year (Y-o-Y). Air compressors are applied for various constructional activities such as subways, tunnels, and bridges. Compressors are also applied in steel, chemical, mining, food processing, and machinery industries. As compressors are required in most of the infrastructural activities, the increasing infrastructure spending is resulting in growth in Asia-Pacific compressor market.
Initial investments in terms of procuring a compressor is relatively high and is one of the major upfront expenses for businesses. In addition, installation expense of a compressor is also very high. The price of a compressor can vary with type, for instance, screw compressors have higher initial purchase price than other types. In APAC, primarily India, China, Indonesia, Philippines, and rest of South Asian countries, price is one of the major factors hindering the market. Several developing countries in APAC such as Bangladesh, Bhutan, Pakistan, and India, have low Purchasing Power Parity (PPP). As a result, high initial purchase cost of compressors is exhibited to be restraining the growth of Asia-Pacific compressor market.
Asia-Pacific Compressors Market Competitive Landscape
Asia-Pacific compressor market is highly competitive owing to the presence of several large, and small and medium compressor manufacturers. With backing of stakeholders, these enterprises are heavily focused on research & development (R&D) of their compressors. For instance, Elgi Equipments Limited, India based compressor manufacturer, is focusing on developing IoT based compressors which is set to boost its market position in the coming years, primarily driven by the adoption of Industry 4.0 norms across the region.
Some of the major players in the Asia-Pacific compressor market include RECHI Precision Co. Ltd, Elgi Equipments Ltd, Kaeser Compression SE, Ingersoll-Rand plc, Atlas Copco AB, Kobe Steel Ltd, ANESI IWATA Corporation, Hitachi Ltd, Zhe Jiang Hongwuhuan Machinery Co. Ltd, MAHLE GmbH, Hanon Systems, Toyota Industries Corporation.