Report examines automotive welding market

Edited by the Engineeringtalk editorial team Mar 20, 2002

The European metallic welding equipment market for automotive applications is expected to expand against a backdrop of strong price pressures and intensifying competition.

The European metallic welding equipment market for automotive applications is expected to expand against a backdrop of strong price pressures and intensifying competition.

In this market - valued at $626.4 million in 2001 and projected to rise to $746.6 million in 2008 - the fast-advancing arena of laser welding technology offers exciting opportunities for growth.

Currently, metallic welding equipment manufacturers are grappling with rising competitiveness based on the twin demands for lower prices and enhanced product quality from end-users.

Falling prices have been a consequence of escalating competition and advances in manufacturing techniques.

Also, with end-users increasingly clamouring for lower prices, leading players have been forced to pursue aggressive pricing policies.

This presents a challenge for manufacturers to maintain profitability while adapting to declining prices.

As Ozan Dogruer, Research Analyst with Frost and Sullivan states: "Price leadership remains important.

Companies unable to compete on price will struggle to win business".

Competitiveness is also growing, on two parallel fronts.

On the one hand, manufacturers of metallic welding equipment are contending with increasing usage of substitutes to welding, such as clinching, riveting, and gluing.

On the other hand, opposing technologies within the field of welding equipment are competing with each other for market share and revenues.

The most prevalent example is laser welding, which is successfully competing in a growing number of markets due to its superior performance characteristics.

This technology has been continually advancing over recent years, enabling improved performance and an expanded range of applications.

High growth in this segment is expected to continue, to the detriment of rival welding technologies such as resistance welding.

In serving the automotive sector, innovation is seen as being critical in addressing end-user demands for increased product value and performance.

Already, equipment quality is improving as manufacturers continue to develop innovative features aimed at increasing the value of their products.

In turn, end-users are receiving more value for money than before.

The growth in high-specification instruments and newer technologies such as mechanised equipment, weld sensors, software integration, welding simulation programmes, and improved power sources has further underlined the importance of innovation.

"Companies that do not innovate, or do not have the capacity to produce these products, will remain at the lower end of the market with lower revenue shares", warns Dogruer.

The use of new metallic materials such as aluminium and magnesium alloys in the automotive industry is also creating new applications and market opportunities for metallic welding equipment.

Increasing demand for sophisticated welding equipment that can produce quality results with these materials is growing, making it a key requirement for manufacturers to develop advanced technologies, or face the risk of losing market share.

In future years, ensuring global availability of products and services is likely to be a key challenge for equipment suppliers.

In order to retain their competitive edge, manufacturers will also need to provide complete solution packages augmented by comprehensive before and after sales service.

While there is good scope for advancement in the sales of welding equipment to the automotive sector, the pressure the industry faces means that all suppliers will have to ensure they focus on more effectively servicing user needs with a broad and affective range of cost effective technology.