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Bearing Industry with the widespread of the new crown virus.


Previous crises are usually concentrated in one industry or one region, but the new crown virus is a global crisis that has affected more than 75% of global manufacturing output. This will undoubtedly have a cascading effect on the bearing market.

According to data from Fortune Business Insights, global commercial aircraft revenue in 2018 was approximately US$191.1 billion, and is expected to grow by approximately 2.93% annually. This will lead to good growth in the civil aircraft manufacturing industry and increase the demand for power transmission and bearing products.

However, aviation giants Boeing and Airbus are facing considerable resistance and difficulties, because large-scale quarantine measures around the world have brought the movement of people to a halt in most parts of the world. According to statistics, the number of daily international flights in the second quarter of 2020 has decreased by 87%.

After recently laying off 15,000 employees, Airbus CEO Guillaume Faury said his company "is facing the most severe crisis in the history of this industry."

Therefore, according to the Oxford Economics Research Institute, the manufacturing output of the aerospace industry fell by 25% from the fourth quarter of 2019 to the second quarter of 2020. At the same time, the production of the automobile manufacturing industry, which the bearing industry also relies heavily on, also dropped by 37%.

In addition, the output of some other industries that provide a large demand and source of income for the bearing industry has also lagged far behind their previous plans and expectations.

This includes the electrical equipment industry, according to Oxford Economic Consulting, the industry's output fell by 13%. On the other hand, the output of the industrial machinery industry also fell by 12%. According to Ariston's research, the global precision parts market is expected to grow by 10% during the period 2021-2025.

In addition, there is the metal and metal products industry, whose output has also fallen by 8%. However, we also see that “the global demand from January to May of 2020 is 9.86 million tons, which is higher than the 9.61 million tons in the same period in 2019. According to the report of the World Bureau of Metal Statistics, China’s demand from January to May of 2020 is 532 10,000 tons, 9.8% higher than the first 5 months of the same period in 2019.

We should see that although the operating income of some sub-sectors has fallen by more than 40% to 50%, the overall data of the bearing manufacturing and distribution market has only dropped by 20% during the global isolation due to the epidemic and various social activity restrictions.

The better news is that relevant data show that demand in the bearing industry has almost returned to the level before the lockdown, especially in the distributor market.

Although the new crown virus has severely disrupted the industry and the market, new business opportunities are emerging after its widespread spread. A good sign is that new and various small bearing and power transmission companies are being established, which is a clear manifestation of confidence in the rapid recovery and future potential of the bearing industry.

Compared with the obvious response of the distributor market, the measures that governments have and will take in relation to the epidemic and the revitalization of the economy, as well as laws and regulations, will have a greater impact on the recovery and development of the bearing manufacturing industry. Since this point is currently very uncertain, we are still unable to determine whether the future growth of bearing manufacturers is reliable.

To see the direction of the bearing industry, we must not only consider the overall situation of the entire bearing industry, but also the unique situation of a specific industry, including the current chaos and future prospects. For example, continued turmoil and change in the automotive manufacturing industry (which started before the spread of the new crown) is likely to have a significant impact on certain specific bearing types. As more and more countries introduce carbon-free emissions policies to deal with people's growing concern about climate change, companies are paying more attention to the manufacture of electric vehicles. Because electric vehicles require fewer anti-friction parts, this will lead to a reduction in the demand for machine tool parts that need to be processed for these anti-friction parts.

Contrary to the automotive industry, there are other industries around the world, such as food processing, agriculture, maintenance, medical equipment, electrical equipment, and robots, whose demand is expected to grow substantially, thereby contributing to maintaining the development of the bearing industry.

Although the current expectations for the growth prospects of the world bearing market are not as high as before the virus spread, the first signs of recovery of the world economy and industry have marked the beginning of a new era, so we expect the situation of the bearing industry to change rapidly. In the future, manufacturers will need to focus on developing more customized bearings and low-volume, high-profit products based on the ever-changing market structure and consumer demand trends.

In the period after the end of the virus, due to the need to continue to develop their own infrastructure, China, Indonesia, Vietnam, India, Thailand and other parts of the Asia-Pacific region will continue to increase the demand for construction, energy and industrial equipment, so that the world economy will continue to grow. carry on. For example, the rapid development in the field of renewable energy will drive more and more demand for roller bearings. Compared with 2019, the demand for parts and components in the energy industry in the Asia-Pacific region increased slightly during the spread of the virus, while water transportation and other marine and aquatic industries remained basically unchanged.

Because a more mature industry foundation has been built, North America and Europe will continue to contribute to the further development and growth of the world economy and the bearing industry. Driven by digitalization, these regions will increase investment in customized solutions and related products and industries for high technology and equipment. Our main expectation for European and North American companies is that they will shift from an efficiency-focused system before the spread of the new crown to a resilient resilience-centric system. The greatest result of the shift to a resilient resilience-centric system will be to restore and further optimize the supply chain, and to adopt more cautious strategies on how to globalize in the future, and pay more attention to risk prevention, control and response.

Examination considered to current widespread virus spread broadcast, you expect the global short-term shaft manufacturer's bearing business prospects?

Bearings are the heart of various rotating equipment and mechanical products. Its wide application in various industries and industrial fields makes it a very versatile supply component, so its development has a strong correlation with global industrial output. At present, the widespread spread of the virus has led to the shrinking of industrial activities worldwide, and the GDP of many countries and regions has decreased, which has led to a reduction in demand, which in turn reduces the output of manufacturers' bearings. The speed of economic recovery (expected to begin next year) will determine the recovery of bearing manufacturers' global production. In order to reduce the turbulent situation and various unknown impacts, the world's bearing manufacturers may carefully restart production and restore production capacity in stages, concentrate on adopting enhanced cost reduction measures, and reduce demand and production by increasing production flexibility And capture the benefits brought by new market demand and growth points. The key to effectively managing this situation lies in how the company can support its key suppliers, distributors, and their own employees, and ensure safe operations and the reliability of the supply chain during the spread of the virus.


The new crown for the global industrial sector shaft bearing distribution business business impact?

Global bearing distribution industry is a highly fragmented market, has mostly struggled in the highly competitive and shrinking profits before the outbreak. The new crown epidemic has further reduced demand, which has caused a sudden increase in the "stocking period" (or inventory turnover days, DSI) of bearing distributors, exacerbating the plight of bearing distributors. Many small distributors are now struggling to deal with cash liquidity challenges, and trying to use government funding and support to maintain business and operations in a variety of uncertainties. Larger distributors are focusing on developing industries that have experienced abnormal growth during the months of the new crown epidemic, such as medical equipment, food processing, and hygiene products.

Regulation die than relatively large shaft bearing sub- pin what providers are doing the count plan to degrees through which some indeterminate time period it?

Industrial distributors can plan to adopt the following strategies to deal with uncertain market conditions:

·        Focus on the management of cost reduction and increase of capital liquidity (monetization ability of assets such as inventory, accounts receivable, and ability of deferring accounts payable)

·        Seize high-growth areas and opportunities in the context of the new crown epidemic

·        Further analysis and optimization of "customer mix" and "product mix"

·        Establish the ability to "value-added services" instead of "sales and resale of simple products with no characteristics

·        Adopt digitization and accelerate the application of new technologies


And global shape potential in comparison , India and its various working industry leading prospects domain?

India’s fight against the new crown epidemic has its own characteristics. The governments action to restrict people’s activities was much earlier than in many countries. But in the past period of time, we have seen that the virus is clearly spreading in large numbers and rapidly. Due to the high population density, weak public health infrastructure, the overburden, the high incidence of non-communicable diseases, and the possibility of transmission from young people to the elderly through the family lifestyle of multiple generations, compared with most countries in the world, India Face a higher risk.

The economic impact of India’s home quarantine and other social restrictions in response to the epidemic is huge and unprecedented. Just one week later, industrial production in March fell by 16.7% year-on-year. In the manufacturing sector, the Purchasing Managers Index (an indicator for forecasting recent economic activity) shrank a record in April, and there was little improvement in May. Although there were some signs of slow recovery in June, it was far from the level before the new crown.

This situation has put the Indian manufacturing industry into a tense situation, because the manufacturing industry accounts for almost 20% of India's GDP, and 50% of it comes from the automotive industry. In fact, before the epidemic, the Indian auto industry was struggling to cope with a sales drop of more than 15% and a 5% to 10% reduction in production. This situation is a greater challenge for micro, small and medium-sized industries, because these companies, which are inherently weak and weaker due to their own financial resources, are more affected by uncertainty.

The future of the Indian economy will directly depend on how to manage the COVID-19 situation and how quickly India can seize the opportunities presented by the global situation, including establishing itself as a reliable and cost-effective global manufacturing center.

What is the recent vision of the Indian industrial bearing distributor business?

Because the demand in traditional industrial growth areas is shrinking, Indian industrial bearing distributors will look for new growth points in the pharmaceutical, medical equipment and food processing industries to make up for the weak demand in the transportation industry (automotive, aviation and railway). Priority will shift from "high-volume, low-margin" business to "small-volume, high-margin" business areas. However, the possibility of panic selling at low prices cannot be ruled out in the short term.

As the government and society "Made in India" initiatives and requirements are more urgent, Indian domestic bearings will be more favored than imported bearings. Considering the uncertainty and geopolitical situation that may affect their own business in India, Indian distributors may also reconsider the "brand portfolio" of the products they sell.

Economic pressure may lead to contract renegotiations between dealers and customers and changes in distribution channels. Distributors who do not intend to survive the risk smoothly in the current unstable situation will reap huge benefits in the recovery phase after the new crown.

Also what the other shaft bearing business related important concept of the point where you are willing to share it ?

Resilience is the most important leadership trait in this time of the exam. Leaders who can promote the development of the enterprise by building a cohesive network of inclusive, trustworthy suppliers, subcontractors, motivated employees and satisfied customers, and making the right decisions to promote the development of the enterprise will be established A sustainable corporate organization and benefit from the rapid growth that emerged after the crisis.

Send language to Chinese bearing enterprise sector:

Faced with more challenges, the transformation and upgrading of China's manufacturing industry, including bearings, must be accelerated. "To act is to die, not to act is to wait for death" is the entanglement of many companies. How do companies find breakthroughs in transformation and upgrading to deal with traditional challenges such as rising costs and labor shortages, as well as new challenges from trade frictions and the current epidemic? I always believe that the key breakthrough lies in completing the transformation and upgrading of the business philosophy from price winning to value-driven.

Although the academic and dictionary definitions of the term value itself are vague in a broad sense, the value that manufacturing companies can provide to customers can be specifically classified into four categories, namely: 1) Help customers increase the market price of their products; 2) Help customers complete market orders faster; 3) Help customers reduce total operating costs; 4) Help customers reduce purchase prices. The "Four Values" tells us that, on the one hand, only by making contributions to customers and solving problems in these four areas, manufacturing companies can bring real value to customers and be recognized by customers. On the other hand, if a company can only contribute to customers in one area, it will only seize a quarter of the opportunity. In reality, most Chinese manufacturing companies have been able to contribute to customers in only one area of price. Once the advantage in this area is lost or the focus of market demand shifts from price to other areas, it is quite logical for companies to be in crisis. For example, what many key overseas companies most urgently need is quick response, or rapid development of anti-epidemic materials urgently needed in the market, and faster delivery of orders for special industries such as medical, food, and energy, rather than reducing costs.

In response to the current epidemic, Chinese bearing companies need to strengthen their research on how to meet customer needs in four areas, provide corresponding value, and how to make customers recognize value. One aspect is the need to shift from simple sales to more emphasis on business development. Bearing export manufacturers must have an in-depth understanding of the final application and sales channels of their products abroad. For example, the same small deep groove ball bearings or related parts depend on whether they will use much-needed electricity, medical equipment, or equipment for manufacturing PPE (personal protective equipment) and drugs related to the epidemic. The same applies to electrical products, depending on whether it is supplied to online sales companies or physical stores. Depending on the situation, the continuity of orders, the ability to grow, and the ability to maintain good prices will vary greatly. Not only must we understand our direct customers, but we must also keep track of the final application of the product in overseas markets. During the epidemic and during the recovery period, other industries and related companies that are licensed by governments to continue to operate or encourage the development of "business that meets basic needs" or "critical production and infrastructure" should become export companies' priority to strive for and ensure delivery. Key objects.

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