Generic selectors
Exact matches only
Search in title
Search in content
Post Type Selectors

Looming Changes in the Chinese Pump Market

Industry News

Looming Changes in the Chinese Pump Market

The Chinese pump market is massive, making up more than 60% of unit shipments in Asia Pacific.  This percentage is expected to rise above 65% by 2017, when annual pump sales in China are expected to reach nearly 13.5 million units.  Though the Chinese market is well-poised for substantial growth over the next five years, it is not clear which pump producers will be able to best take advantage of this expansion.  Because of the positive long-term growth forecasts for the Chinese economy, many pump suppliers are confident in their ability to open new facilities in China and compete with local manufacturers.  This influx of international companies has introduced a new dynamic to the competitive environment in the country, and the Chinese pump market is undergoing a major transition as a result.

Chinese manufacturers produce pumps that are typically only 80% as efficient as pumps manufactured in other developed regions of the world.  As a result, international companies that operate in China have been able to take the most advantage of a recent government subsidy program that encourages the use of energy-efficient water pumps.  The subsidy is granted to any manufacturer that produces compliant energy-saving pumps in mainland China.  This has encouraged companies like Grundfos, Wilo, Sulzer, KSB, and many other foreign pump suppliers to greatly expand their presence in China.  Several larger Chinese pump producers like Shanghai Liancheng, Hunan Neptune, Nanfang, and Shanghai East have also enjoyed the program’s benefits since its implementation late last year.

The smaller Chinese suppliers typically do not have the economies of scale or technical capabilities to manufacture water pumps that qualify for subsidies such as this one.  However, the large majority of customers still focus more on the pump’s initial cost than its long-term energy-savings potential, so the inability to take advantage of the subsidy has not had a significantly negative impact on these smaller companies.  Currently, the local Chinese companies account for well over half of the country’s pump market.  If this year-long subsidy program (which ends in November of 2013) is a precursor for broader energy-efficiency mandates that may be enacted in the future, the international players will be well-positioned to increase their market share in China.  Whatever the outcome, pump suppliers should be aware of the possible structural changes to the competitive landscape that will ensue as a result of the Chinese government’s future regulation of energy-using products.

For more information, contact me at Preston.Reine@ihs.com

Related Articles

Registration Opens for IMTS 2024

Registration Opens for IMTS 2024

Registration has opened for IMTS 2024 – The International Manufacturing Technology Show, taking place Sept. 9-14 at McCormick Place in…

Related Whitepapers

Upside Down Condos [Case Study]

This condo tower (324 units on 13 floors) had completed a previous retrofit that unfortunately left the variable speed pumps operating in a fixed mode…

Ras Al Khaimah saves 20% energy and 12% OPEX in wastewater pumping system

RAKWA is the RAK wastewater agency responsible for designing, building, operating, and maintaining all the public wastewater systems. Ras Al Khaimah—known as RAK—is the northernmost…

Intelligent Pumps Exceed Savings Estimates (Commercial Facility Installation Casestudy)

Design Envelope 6800 boosters reduced energy consumption by 76% compared to previous boosters, resulting in annual cost savings of $4,400 per system. Background The Heron’s…

Centaur’s Wireless Battery-powered Gateway

Our Solution Wireless sensors combined with a wireless battery-powered gateway can provide a flexible, safe, cost-effective, and reliable solution for collecting continuous condition monitoring data…

Comments

One response to “Looming Changes in the Chinese Pump Market”

  1. Tony says:

    Good article

Leave a Reply

Your email address will not be published. Required fields are marked *