The conveyor industry will continue to drive the growth of the general purpose reducer market

It is expected that 2024 will be the low point in the growth of global general reducer sales, but from 2025, the market is expected to return to a stable growth of about 3% to 5% per year.

The overall growing demand for industrial automation and mechanical equipment has supported the sales growth of general reducer, but in the past two years, driven by the backdrop of persistent labor shortages in Europe and the United States, material handling applications and warehousing and logistics are expected to most significantly drive the demand for conveying equipment and reducer.

In 2022, 29% of the global general purpose reducer market sales will come from conveyor, crane, and hoist and winch applications, totaling a market size of $4.1 billion. Over the next five years, 34% of the global general purpose reducer market revenue increase is expected to come from these three types of material handling equipment.

Unit conveyor and bulk conveyor market

In our latest edition of the report, we further subdivide the conveyor industry into unit conveyor and bulk conveyor. The unit conveyor market will mainly benefit from investments in the warehousing, logistics, e-commerce and airport industries, while the bulk conveyor industry demand is closely related to the mining and construction industries.

Due to the different application industries, the growth trends of these two segments are different. For example, in the US market, due to weak demand in the warehouse logistics industry in 2023 and strong growth in the mining industry, the expected growth rate of reducer sales in the unit conveyor field is much lower than that in the bulk conveyor field. In contrast, in the Chinese market, the contraction of demand in the bulk conveyor industry is more obvious due to the downturn in the construction-related market.

Overall, demand from the warehouse and logistics sector is expected to grow faster than heavy industry over the next five years. We forecast a sales CAGR of 4.1% and 3.6% for 2023-2028 in the unit and bulk conveyor segments, respectively.

Increased market concentration,

But there are fast-growing challengers in the segment

Market concentration by product type CR10- The share of the top ten vendors continues to increase

As a mature market, the market pattern of general gear reducer changes little every year, but the concentration is slow and continues to improve. In 2022, the top 10 suppliers accounted for 62% of the global market revenue share, up from 60% in 2021. This figure is expected to increase further in 2023.

According to the survey statistics, the share of the top ten suppliers (CR10) has increased in the three product markets. Among them, the market share concentration of light gear motors and gearboxes is the highest, and SEW and Nord continue to gain share in the global market.

Still, relative “newcomers” in the industry are growing fast and doing well in specific regions or product types. For example, WEG is growing rapidly in the American gear motor market, some Chinese manufacturers from worm gear reducer products began to break through, and sales in the EMEA market have also achieved good growth.

Going forward, we do expect the market share concentration of general Motors to continue to increase slowly, but there are still good opportunities for small and medium-sized suppliers to grow rapidly in their key segments, especially after the downward cycle, when demand recovery will bring new opportunities, and in emerging regional markets, where the market landscape is far from a foregone conclusion.