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Demand for Gears Is up

Demand for Gears Is up

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

"Gear manufacturers will also benefit from value gains derived from product improvements and upgrades, such as transmissions with higher numbers of speeds," says Brendan Eyre, an analyst for The Freedonia Group Inc., the Cleveland-based industry research firm that recently completed the study.

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

"Larger vehicles generally utilize more gear products both because they are larger and because they are more likely to be four-wheel drive. A decline in their popularity will hold back sales to some degree," he says.

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

Transfer case sales will also be boosted by strong growth in medium and heavy vehicle production. However, several emerging trends in the motor vehicle industry will limit gear demand increases. Continuously variable transmissions, which do not require gears, are rapidly gaining a foothold in the automobile segment of the industry.

Increased sales opportunities will also present themselves in the relatively small but rapidly expanding wind turbine market, in which large, high-value gearboxes are required. Output in the aerospace equipment and machinery industries is expected to advance modestly from its level a decade earlier, which will restrain gear demand in those markets to some degree.

Within the individual gear category, helical and bevel gears will register the strongest gains. Helical gears will continue to displace spur gears in a number of applications, while bevel gear manufacturers will take advantage of high-value sales opportunities in the aerospace market.

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

Compared to spur gears, he says helical gears typically operate more smoothly and quietly, are capable of transmitting greater loads and are more durable. Demand for these products is limited by their higher cost and the higher level of manufacturing precision required in making them.

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

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

U.S. GEAR DEMAND (million dollars)

Annual Growth Rate

2003

2008

2013

2003-2008

2008-2013

Gear Demand

23,694

24,800

30,100

0.9

3.9

Motor Vehicles

19,684

18,950

23,800

-0.8

4.7

Aerospace Equipment

1,775

2,500

2,800

7.1

2.3

Machinery

1,535

2,470

2,530

10

0.5

Other

700

880

970

4.7

2


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