The APAC compressor market is expected to reach $25.7 billion by 2030, advancing at a CAGR of 3.2% during the forecast period. The market is buoyed by the growing automotive industry, predominantly passenger vehicle category, along with overall growth in demand for electric vehicles. In terms of the automotive industry, the market is driven by the adoption of electric vehicles, wherein China and Japan are among the major shareholders, owing to their respective government support. The surging demand for vehicles and the expanding construction sector are propelling the APAC compressor industry.
The COVID-19 crisis has had a negative impact on the compressor market, especially in China and India. The nationwide lockdown imposed by several regional countries has resulted in complete or partial shutdown of industries, and manufacturing facilities. As China is the epicenter of the corona outbreak and it is also the largest producer of raw materials as well as finished goods in the region, the COVID-19 pandemic has disrupted the supply chain network of different industries in the country. It has resulted in the negative growth of the market in 2020. Moreover, the deterioration of the healthcare sector in other developing and under developed countries of the APAC region has led to the sluggish growth of the regional market.
The positive displacement compressor category accounted for larger revenue in the APAC compressor market in 2019, buoyed by the growing demand for rotary type of compressors. Owing to major use of these compressors in numerous applications, such as industrial manufacturing, HVAC-R, automotive, food and beverage, power, and construction, the category is projected to lead the market throughout the forecast period. Further, the general advantages offered by these compressors are low maintenance cost, long-service life, and high reliability.
Based on application, the automotive category held the highest market share in 2019, majorly due to the increasing production of motor vehicles, primarily electric vehicles, to cater to the rising demand. In 2014, APAC reported production of 37.5 million vehicles, which increased to over 45 million in 2019. In the passenger vehicle category, electric car’s demand recorded explosive growth of over 90% during 2014–2019. In APAC, China accounts for the largest electric vehicle production. For instance, the country reported production of 15.3 thousand electric vehicles in 2014, which increased to 579 thousand in 2019.
Among APAC countries, China generated the highest market revenue in 2019, due to the fact that it is the manufacturing hub, globally. China’s vision Made in China 2025 is one of the major factors contributing to the growth of the manufacturing sector in the country. According to World Bank, China’s manufacturing output grew by 5.2% during 2014–2019. Apart from this, the automotive industry is exhibited to be one of the leading end users of compressors in China and is projected to continue the trend in the years to come in the compressor market.
Mergers and acquisitions are the important strategic developments in the APAC compressor industry market. Major payers acquiring smaller companies and distributors operating in the market to increase their presence and foothold.
For instance, in December 2019, Elgi Compressors USA Inc., a subsidiary of Coimbatore-headquartered air compressor manufacturing company Elgi Equipments Limited, acquired Michigan Air Solutions, an independent distributor of air compressors in Michigan.
Similarly, in March 2020, Gardner Denver Holdings Inc. completed the merger with the Ingersoll Rand Industrial segment. The newly introduced company Ingersoll Rand Inc. (Ingersoll Rand) will begin trading on the New York Stock Exchange under the symbol “IR”.
Rechi Precision Co. Ltd., Elgi Equipments Limited, Kaeser Kompressoren SE, Gardner Denver Holdings Inc., Atlas Copco AB, Kobe Steel Ltd., ANEST IWATA Corporation, Hitachi Ltd., Zhe Jiang Hongwuhuan Machinery Co. Ltd., MAHLE GmbH, Hanon Systems, and Toyota Industries Corporation are among the major players operating in the APAC compressor market.