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

Related Whitepapers

Axial Flow Check Valves for Pumps and Compressors

Pumps and compressors are essential devices used in a wide range of industrial plants and buildings. They are the power source that make it possible…

Proven Seal Technologies for CO2 Capture and Supercritical Applications

Advanced seal technologies for CCUS and sCO2 applications support energy transition initiatives Companies increasingly are prioritizing energy transition initiatives to reduce greenhouse gas emissions known…

Accurate & Reliable Pumps for Lease Automatic Custody Transfer (LACT) Units

Hydra-Cell Seal-less Pumps provide accurate and reliable custody transfer of crude oil, produced water, and NGL’s. They feature a compact design, require minimal maintenance, and…

Liquefied Natural Gas [A Complete Flow Control Portfolio]

Liquefied natural gas (LNG) will play a pivotal role as companies transition from coal and oil to cleaner energy sources during renewed efforts to significantly…

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.

Join the #PumpTalk Community


By submitting this form, you are consenting to receive marketing emails from: Empowering Pumps & Equipment, 2205-C 7th Street, Tuscaloosa, AL, 35401, http://www.empoweringpumps.com. You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email. Emails are serviced by Constant Contact