At present the world bearing market is virtually divided among eight major multinational companies with a combined market share of 80%. Their main production facilities are located mainly in Germany, China, the U.S., Sweden and Japan. At the same time, many Chinese companies, stay in for only 10% of the world market, but at the same time, China’s economy is the largest in the world and its need for bearings only continues to grow, creating a significant gap between supply and demand, which is rapidly filled by foreign manufacturers.
National bearing industry in China are required to overcome several obstacles to mass-produce high-tech, high-precision and high-margin bearings
This situation, of course, is a concern of representatives of national bearing industry of China. Despite the fact that the Chinese bearing factories mastered the production of over 70 thousand types and sizes, their products are poorly represented in the market of high-tech, high-precision and high-margin bearings. Taking into account the fact that the bearings are often the key details of the mechanism, which are widely used in economics, construction and military equipment, the Chinese experts tend to believe that the national bearing industry will be able to take a significant position in the world market through the establishment of one of the most high-tech and capital-intensive industries in China.
But they must overcome a number of obstacles, such as:
1) strong price competition between domestic producers – because of the large number of industries (especially small business), weak consolidation, low barriers to entry and the lack of mechanisms to exit from the market;
2) technological backwardness – poorly developed automation, weakly present CNC machining centers , absence of breakthrough research and development, in particular in the development of new steel grades, improve the quality of already produced steel in the field of lubricants, new production and processing of bearings;
3) Timeless business model – requires a transition from simple maintenance needs consumer organizations to closer integration with industry as down (mining, metallurgy and machine tools), and up (automotive, construction, mechanical engineering, etc.);
4) Volatility in the market of special steels. In order to overcome an intensive use (with the help of government policy) measures such as:
– Price controls;
– Structural adjustment;
– Increase investment attractiveness;
– The availability of credit;
– Increasing demand due to the well-being of citizens.