The global compressor market accounted for $39.9 billion revenue in 2019, and it is expected to reach $48.5 billion in 2030. The growing demand for vehicles and expanding construction sector are propelling the compressor industry. Additionally, the increasing industrialization rate, especially in Asian countries, is prognosticated to open new avenues for compressors in various verticals. Factors such as the increasing use of multi-stage compressors, high adoption of screw compressors, and growing pipeline network are further projected to drive the market growth in the years to come.
Manufacturing is among the worst-hit sectors due to the current coronavirus pandemic. The COVID-19 crisis has had a negative impact on the compressor market, with the major economies of the world, including the U.S., China, Japan, Germany, the U.K., and India, imposing restrictions on the movement of people and a temporary shutdown of industries. Such factors have resulted in the non-availability of raw materials and components, low inventory levels, delay and cancelation of orders. Thus, the compressor industry is recording subdued growth in 2020.
Positive Displacement Category To Dominate Market Throughout Forecast Period
Based on compressor type, the positive displacement category held the larger share in 2019, and it will continue its dominance throughout the forecast period. This is ascribed to the widespread adoption of positive-displacement compressors in small and medium-scale industries. Positive-displacement compressors offer various advantages, such as a higher pressure-to-size ratio, higher efficiency, and lower operating cost. Further, the increasing adoption of rotary compressors is contributing to the compressor market growth.
Based on application, the automotive category recorded the fastest growth during the historical period (2014–2019), and it is expected to maintain the trend in the years to come. The consistently growing electric vehicle production across the world is, in turn, fueling the compressor market advance. Further, the increasing focus on incorporating energy-efficient practices in the automobile industry, to drastically reduce the amount of CO2 and waste generated, is supporting the market growth. For instance, the EU Industrial Emissions Directive, which focuses on regulating the emissions from industrial installations, helps improve the efficiency of the compressors deployed in auto plants.
The Asia-Pacific (APAC) region held the largest revenue share in 2019, and it is projected to dominate the industry throughout the forecast period. This is attributed to the increasing demand for vehicles in the region, due to which automakers are increasing their production. Vehicle production in APAC stood at 49 million units in 2019, as per the Organisation Internationale des Constructeurs d'Automobiles (OICA).
Apart from this, APAC is expected to be the largest market for industrial compressors, due to the increasing government support in the region. For instance, the ‘Make in India’ initiative taken by the Indian government is expected to offer ample opportunities to compressor manufacturers in the forecast period. In the same vein, the ‘Made in China 2025’ initiative aims at making China the world’s manufacturing hub, which will create huge opportunities for the compressor market in the region.
Mergers and Acquisitions Are Important Strategic Developments
Mergers and acquisitions are among the primary strategies followed by the players operating in the global compressor market. Acquiring smaller regional players with advanced product offerings helps the major companies in the industry in consolidating their position.
For instance, in August 2020, Atlas Copco AB acquired THN Druckluft and Produktions GmbH & Co.KG (THN), a German distributor of compressed air solutions and construction services, to serve industrial customers.
Similarly, in July 2019, Nidec Corporation completed the acquisition of the compressor business (Embraco) of Whirlpool Corporation, following the European Commission’s approval granted in June 2019.
Mitsubishi Heavy Industries Ltd., Gardner Denver Holdings Inc., Kaeser Kompressoren SE, Accudyne Industries LLC, Atlas Copco AB, Kobe Steel Ltd., ANEST IWATA Corporation, Zhe Jiang Hongwuhuan Machinery Co. Ltd., MAHLE GmbH, Sanden Holdings Corporation, Valeo SA, Hanon Systems, and Toyota Industries Corporation are the major players operating in the global compressor market.