Instrument and meter industry covers a wide range of areas and mainly includes about 20 industry segments such as analytical instrument, industrial automatic control system, optical instrument, electric instrument and meter, automobile instrument and environment monitoring instrument. In recent years, the growing Chinese economy has promoted the development of instrument and meter sub-industries.
From 2006 to 2010, the CAGRs of total industrial output value and sales of Chinese instrument and meter industry achieved 21.70% and 21.73%, respectively. In 2011, the total industrial output value of the whole industry increased 28.18% YoY to RMB609.855 billion, and the sales rose 28.21% year on year to RMB591.334 billion, which is mainly attributable to the following two aspects. On the one hand, the flourishing Chinese economy has boosted the demand for instrument and meter; on the other hand, the favorable policies introduced by the Chinese government have stimulated the industry vitality.
Overall, the instrument and meter industry in China characterizes the followings.
1. The whole industry is characterized by a large number of enterprises and a low degree of market concentration, but some sub-industries like environment monitoring instrument feature a high degree of market concentration. As of 2010, there were 5411 instrument and meter manufacturers in China, among which, top 26 ones accounted for only 13.5% of the total industrial output value of the whole industry, while the top two air quality monitoring system manufacturers occupied 73% of the air quality monitoring system market.
2. The trade deficit is significant and has been on the rise year by year, and the supply gap of high-end products is large in China. Between 2007 and 2010, the CAGRs of import value and export value of instrument and meter registered 14.62% and 10.87% separately, and the trade deficit increased to USD15.1 billion from USD9.05 billion.
3. The output is distributed near markets, mainly in economically developed regions with booming downstream sectors, and features a high degree of regional concentration. Presently, major producing areas of instrument and meter in China include Jiangsu, Guangdong, Zhejiang, Shandong, Shanghai and Beijing.
4. In Chinese instrument and meter industry segments, large foreign enterprises dominate the high-end product market, and Chinese companies possess certain advantages in some fields. For the time being, multinational companies including Thermo Fisher Scientific and Shimadzu occupy Chinese high-end instrument market, while Jiangsu Skyray and Hebei Sailhero have great advantages in element analyzer and environment monitoring instrument sectors, respectively.
It is in the report that covers the followings:
• Production, sales, profit, fixed asset investment and development environment of Chinese instrument and meter industry;
• Import & export of the whole industry and some products;
• Development status of Chinese instrument and meter production areas, including output, sales, profit, import & export and regional planning;
• Enterprise competition of each market segment, including major products and market share of related enterprises;
• Operation, project planning, R&D and forecast of 5 comprehensive multinational foreign enterprises and 8 Chinese companies.
The development strategies of Chinese companies include:
• Increasing the investment in R & D and establishing competitive edge in certain segments. For instance, Jiangsu Skyray Instrument continually invested in the field of precious metal analysis, with R&D expense ratio reaching 12.8% in H1 2011, and now it has established absolute advantage in the field of precious metal analysis in China.
• Coordinating with the large-scale projects of the government and large enterprises to develop new products and establish stable downstream sales channels. For example, winning the bid for national environment monitoring equipment procurement offered Hebei Sailhero Environmental Protection High-tech a steady sales channel.
The development strategies of foreign multinationals consist of:
• Increasing investment in China to enhance the localization and competitiveness of their products. For instance, the sales of Shimadzu in China made up 11% of the company’s total operating revenue in 2011, and China thus became the second largest contributor to the company’s revenue after Japan.
• Transferring R & D activity to China and taking advantage of Chinese human resources to improve their R & D capabilities and develop the products catering to the Chinese market. PerkinElmer and Thermo Fisher Scientific set up R & D centers in 2006 and 2010 respectively in China to enhance their R & D strength.