IHS has been monitoring the market for linear motion precision machinery parts and linear motors since 2001 and has been producing worldwide market statistics since 2004.
It is understood that the Japanese suppliers of linear motion precision machinery parts hold a leading position in the world market. If the Japanese market is excluded, more than a quarter of the worldwide revenues are supplied by Japanese vendors. However, Japanese suppliers have been steadily losing market share and suffering at the hands of competition from European and North American based suppliers.
The Great East Japan earthquake in 2011 was followed by an unprecedented strengthening of the Japanese yen against the US dollar. This adversely affected export demand for the supply of precision machinery parts from Japanese suppliers. Following the earthquake, Japanese manufacturers not only faced logistical challenges, but declining orders from foreign customers as Japanese products became more expensive compared to overseas competitors.
However, since late 2012, the Japanese yen has been in a state of steady decline against all major currencies and, on average, fell 22 percent against the U.S. dollar in 2013. As a result, Japanese suppliers are upping their marketing efforts to go after business that was lost in 2011 and 2012. In the near future, I expect companies like NSK, THK and IKO to come roaring back in the market to win back share.
Japanese exports of linear motion components to American, European and other Asian markets are projected to increase on the backdrop of the weak yen. Even though this means that import of materials such as steel and aluminium will be more expensive for Japanese manufactures, the steel prices are currently at historic low negating high import costs.
As we move into 2014 I’ll certainly be keeping a close watch on the performance of Japanese suppliers and the effect that their resurgence has on manufacturers from other countries such as Germany, Taiwan and the U.S.
Mohammad Mian is an analyst at IHS.