Demand for Gears Is up

Thedemand for gears and gear assemblies in the U.S. is forecast to increase 3.9percent per year to $30.1 billion in 2013, with gains supported primarily byrebounding levels of motor vehicle production.

"Gear manufacturers will also benefit fromvalue gains derived from product improvements and upgrades, such astransmissions with higher numbers of speeds," says Brendan Eyre, an analyst forThe Freedonia Group Inc., theCleveland-based industry research firm that recently completed the study.

Eyre says that concerns over fuel efficiencyand the environment is reversing a longtime trend, and passenger cars are accountingfor a growing share of the U.S. production mix relative to light trucks, vansand SUVs.

"Larger vehicles generally utilize more gearproducts both because they are larger and because they are more likely to befour-wheel drive. A decline in their popularity will hold back sales to somedegree," he says.

In 2008 more than three-quarters of all gearsales were motor-vehicle-related, despite unusually low levels of vehicleproduction. Trends within the automotive industry will also support increasedsales of higher-value gear products, as transmissions will generally featuremore speeds, power accessories will require more gearmotors, and more cars willfeature four-wheel-drive systems, which require the use of differentials.

Transfer case sales will also be boosted by stronggrowth in medium and heavy vehicle production. However, several emerging trendsin the motor vehicle industry will limit gear demand increases. Continuouslyvariable transmissions, which do not require gears, are rapidly gaining afoothold in the automobile segment of the industry.

Increased sales opportunities will alsopresent themselves in the relatively small but rapidly expanding wind turbinemarket, in which large, high-value gearboxes are required. Output in theaerospace equipment and machinery industries is expected to advance modestlyfrom its level a decade earlier, which will restrain gear demand in thosemarkets to some degree.

Within the individual gear category, helicaland bevel gears will register the strongest gains. Helical gears will continueto displace spur gears in a number of applications, while bevel gearmanufacturers will take advantage of high-value sales opportunities in theaerospace market.

"Both helical and bevel gear demandwill be boosted by recovering levels of machinery production and by the ongoingdisplacement of spur gears in a number of applications," says Eyre.

Compared to spur gears, he says helicalgears typically operate more smoothly and quietly, are capable of transmittinggreater loads and are more durable. Demand for these products is limited bytheir higher cost and the higher level of manufacturing precision required in makingthem.

Increases in bevel gear sales will besupported by many of the same factors as helical gears. In addition,manufacturers of these products will benefit from the growing popularity ofhigher-value spiral bevel gears in a number of applications because of their quietoperation and ability to transmit higher loads at greater speeds.

Original equipment manufacturingapplications, which accounted for nearly 70 percent of all gear sales in 2008,will outpace aftermarket demand increases through 2013 as motor vehicle manufacturingrecovers. Aftermarket demand will be restrained by the greater durability ofmany newer gear products, as well as by moderating growth in the US motorvehicle park.

SOURCE: The Freedonia Group Inc.
The FreedoniaGroup study shows that motor vehicle production is driving annual growth ratefor gears and gear assemblies, with modest increases in aerospace andindustrial applications.