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Surplus of Inexpensive, Imported Products, Causes Shift of Production Facilities to Low-cost Countries

Surplus of Inexpensive, Imported Products, Causes Shift of Production Facilities to Low-cost Countries

Palo Alto, Calif. — October 22, 2003 – Inexpensive, yet high quality hydraulic cylinders and accessories produced in Asia challenge domestic manufacturers for sales.

To stave off pricing pressures from imported products, large domestic manufacturers are increasingly building new production facilities in countries where labor costs are low and environmental regulations, less stringent.

New analysis from Frost & Sullivan (www.frost.com), North American Hydraulic Cylinders and Accessories Markets, reveals this industry generated revenues totaling $4.29 billion in 2002. Total market revenues are expected to reach $5.76 billion in 2009.

With appropriate training in process quality control for foreign managers, overseas facilities would be able to produce products comparable in quality and price with those from low-cost countries. The shift will also provide exposure for new and promising markets.

“As the economic situation and infrastructural facilities improve in these countries, they will sustain demand for hydraulic equipment domestically, reducing the flow of products to the North American market,” states Frost & Sullivan Industry Analyst Dr. Rajender Thusu.

A glut of manufacturers, both domestic and foreign, and the availability of alternative technologies have created stiff price competition in the market. Rising material and labor costs coupled with price cuts has restricted market development and penetration, especially in small and medium-sized enterprises (SMEs).

“The positive upshot of this challenge includes reduction in operating costs, improvement in standards of operations, and plant upgrades,” observes Dr. Thusu.

Manufacturers also have to overhaul their marketing and business practices to be more Internet-friendly, particularly because e-commerce is likely to become a standard trading procedure.

“E-commerce offers customers access to their orders and delivery status, enhancing client-manufacturer relationship,” notes Dr. Thusu.

For SMEs to gain recognition globally, it is imperative they have web sites detailing their profiles, this develops a market image and unique identification.


This ongoing growth opportunity analysis is part of the Factory Automation subscription, which also includes market insights on North American Hydraulic Valves Market, Hydraulic Motors and Hydrostatic Transmission Market, and Hydraulic Pumps Market. Frost & Sullivan also offers custom growth consulting to a variety of national and international companies. Summaries and interviews are available to the press.

Frost & Sullivan, an international growth consultancy, has been supporting clients' expansion for more than four decades. Our market expertise covers a broad spectrum of industries, while our portfolio of advisory competencies include custom strategic consulting, market intelligence and management training. Our mission is to forge partnerships with our clients' management teams to deliver market insights and to create value and drive growth through innovative approaches.  Frost & Sullivan's network of consultants, industry experts, corporate trainers and support staff, spans the globe with offices in every major country

North American Hydraulic Cylinders and Accessories Markets
Report: A544

Contact:
Nuha Kadri
Media Relations Executive
P: 210.247.2440
F: 210.348.1003
E: nkadri@frost.com
www.frost.com

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