On account of the positive economic trends in Europe and China, global sales in the hot runner systems market grew by 8.2% in 2017. However, the intensifying trade war between China and the USA, as well as the EU, is dampening prospects. According to a study by Interconnection, average annual growth through 2021 is expected to be only 5.7%. Overall, the global market volume was EUR 2.4 billion.

Quality Standards on the Rise in China

In spite of the strong growth, the times of double-digit growth rates in the hot runner systems market seem to be a thing of the past. Markets such as Central Europe and the USA have matured to a point that impedes high-level growth. China was once again the clear driving force in the market, with an 11.8% growth rate and a market volume of EUR 735 million. With a 30.7% share of global sales, China thus remains the largest market for hot runner systems – and its dominance is only expected to increase. The Chinese market is benefiting from both lower production costs and rising quality standards. The growth in China is being fueled to a large extent by the auto industry, though it is not just a matter of production. China is also witnessing a rising demand for cars due to an increase in disposable income. So it is not surprising that rising production costs are forcing production to drift more and more to India from China.

Protectionism Helping the US Auto Industry

The North American market grew 6.2% in 2017, a slight increase over the previous year. The market volume was EUR 432.6 million. Nonetheless, the slowing economic trends are showing all the signs of a saturated market. Even if the current economic conditions are sound, forecasts have been downgraded on account of Trump’s protectionist policies. And yet the US auto industry is actually expected to benefit from Trump’s protectionism and will remain the driving force behind the hot runner sector. Interconnection forecasts a 4.8% average annual growth in the sector through 2021.

Eastern Europe Compensates for Brexit

In Europe, the market volume in 2017 was EUR 639.1 million following an uptick in growth to 6.3%. The economic boom in Eastern, Central, and Southern Europe was thereby able to more than make up for the weak developments in Great Britain, which has been stagnating on account of Brexit. Eastern Europe’s growth in 2017 was 8.1% and will continue to stimulate European growth. Average annual growth through 2021 is expected to be 5.9%. In Europe as well, the market for hot runner systems is also being fueled by the auto industry. The higher production volume in Eastern and Southern Europe, along with the increasing number of new car models, is responsible for the upsurge in the industry.

19/11/2018

Copyright: Interconnection, Publication free of charge for coverage regarding the study and InterConnection Consulting.