Hot runner systems are in full swing
The global market for hot runner systems (production of plastic parts or thermoplastics) will grow by 8.3% this year, further accelerating its growth (2016: 7.6%). Driven by the recovery of the Eastern European market and continued growth in Asia, the industry will continue to grow at an annual rate of 7.9% by 2020, according to Interconnection Consulting’s new study.
Asia and Eastern Europe are keeping the industry on its toes
Although the growth rates of the global market for hot runner systems are far from the growth rates of previous years, global growth will increase even further in 2018 (+ 9.0%). The regional growth drivers were once again China and other Asian regions such as India and Malaysia. Eastern Europe is also recording high growth with the relocation of production from Central Europe to Eastern Europe, especially in the automotive industry, contributing to the economic upturn in the region.
North America and Europe are benefiting from the economy
The regions of North America and Europe are already saturated markets. Growth in North America (USA, Canada) amounted to 4.9% last year. The expected protectionism of the Trump Administration could bring benefits to the US automotive industry and with it the market for hot runner systems. For example, Interconnection expects an average growth of 4.8% annually for the years up to 2020. The European total market grew by 5.3% last year. At the same time, the individual regions are developing differently. While the UK is battling the Brexit decision and only achieving a growth of 3.2%, Eastern Europe posted a 7.7% growth, with even better forecasts for the future. Northern Europe can also reckon with high growth rates for hot runner systems in the future. The comeback of Nokia, with three new smartphone models, as well as the renaissance of the Swedish car manufacturer Saab contribute to this.
China is the biggest market in the world
The largest market for hot runner systems is China. In 2016, the Middle Kingdom recorded a growth of 8.9% with a market volume of 657.6 million Euros. China not only benefits from lower production costs, but also increasingly from growing qualitative demands for hot runner systems in the billion-dollar state. As a result, China has become the largest consumer market in the industry, with a market share of 29.8%. This share will continue to rise over the next few years and by 2020 it will constitute more than a third. Growth in China is strongly driven by the automotive and electronics industries. On the other hand, India achieved the biggest growth (+ 12.3%). India is benefiting from the relocation of work, especially as labor costs in China and Korea are slowly increasing.
Medical market as an opportunity for saturated markets
The automotive sector, with a market share of 26.0%, is the dominant segment for the hot runner system industry. The number of new models, especially in the SUV segment, but also the increasing number of electric car models signals that these are the main drivers of the industry. The medical segment is also a market with high growth potential. New technologies such as "lab on a chip" could give new impetus to saturated markets such as North America and Europe. The market concentration on the world market remains stable. The top 10 companies share 60.1% of the total market.