World Power Tools. with forecasts to 2005 and New study finds:

Transcription

1 World Power Tools with forecasts to 2005 and 2010 New study finds: World demand for power tools is projected to increase 5.8 percent per year (including price increases) though 2005 to $24.6 billion The growing popularity of "do-it-yourself" home repairs, as evidenced by the rising number of books and television shows dedicated to the topic, will create opportunities in the US and Western Europe The top four power tools producers -- Black & Decker, Bosch, Atlas Copco and Makita -- accounted for over 29 percent of the global market in 2000

2 Freedonia Industry Study #1419 World Power Tools Study Publication Date: May 2001 Price: $4500 Pages: 249 World Power Tools, a new study from The Freedonia Group, provides you with an in-depth analysis of the major trends in the world market for power tools and the outlook for product segments and major markets -- critical information to help you with strategic planning. This brochure gives you an indication of the scope, depth and value of Freedonia's new study, World Power Tools. Ordering information is included on the back page of the brochure. Brochure Table of Contents Study Highlights... 2 Study Table of Contents and List of Tables and Charts... 4 Sample Pages and Tables from: World Supply and Demand... 6 Market Overview... 7 Supply and Demand by Country/Region... 8 Market Share... 9 Company Profiles List of Companies Profiled Forecasting Methodology About the Company Advantages of Freedonia Reports About Our Customers Related Studies Ordering Information... 16

3 Study Highlights World demand for power tools is projected to increase 5.8 percent per year (including price increases) though 2005 to $24.6 billion. The most significant opportunities exist in China, due to the vast population base and rising construction expenditures. Above-average growth is also expected in Latin America and the Africa/Mideast region, as well as in most of Eastern Europe. The growing popularity of "do-it-yourself" home repairs, as evidenced by the rising number of books and television shows dedicated to the topic, will create opportunities in the US and Western Europe. Electric tools ( plug and cordless) dominate world demand, comprising nearly three-fourths of power tool sales in Although advances for consumer users have outpaced the professional market in recent years, the professional market will remain dominant due to the rising levels of capital investment globally, which will boost construction expenditures. The top four power tools producers -- Black & Decker, Bosch, Atlas Copco and Makita -- accounted for over 29 percent of the global market in * Excluded from the study are non-powered hand tools, as well as machine tools. Freedonia Industry Study 2

4 Study Highlights World Power Tools Demand by Region, 2000 North America 39.8% Latin America 2.9% Western Europe 29.6% Asia/Pacific 20.2% Eastern Europe 4.2% Africa/Mideast 3.3% World Power Tools Demand (million US dollars) % Annual Growth Item /95 05/00 World Population (millions) $ power tools/capita Power Tools Demand Sample 32100Table North America: United States Canada & Mexico Latin America Western Europe Eastern Europe Africa/Mideast Asia/Pacific: China Japan Other Asia/Pacific Copyright by The Freedonia Group, Inc. Order form on last page 3

5 Table of Contents I. EXECUTIVE SUMMARY Summary Table... 3 Tables and Charts are featured for each region and country. Historical data and forecasts are presented for 1994, 1999, 2004 and Population (millions) GDP per capita Gross Domestic Product (bil 98 US$) $power tools/mil $ GFI Gross Fixed Investment (bil 98 US$) $ power tools/mil $ GFI Other Indicators: Urban Population (million) Motor Vehicle Park (million units) $power tools/capita Power Tools Demand (mil US$) By Type: Electric Tools Drills Electric Saw Blades Other Pneumatic Tools Engine-Driven & Others By Market: Professional Consumer net exports Power Tool Shipments II. III. MARKET ENVIRONMENT General... 4 World Economic Outlook... 5 Recent Economic Performance... 6 Macroeconomic Outlook... 8 Table - World Gross Domestic Product by Region Personal Income & Expenditure Trends Table - World Per Capita GDP by Region Fixed Investment Trends Table - World Fixed Investment by Region.. 15 Chart - Power Tools Demand/Fixed Investment Relationship, World Motor Vehicle Park Table - World Motor Vehicles in Use by Region World Population Overview Table - World Population by Region World Urbanization Patterns Table - World Urban Population by Region Power Tools Pricing Patterns Table - Power Tools Pricing Trends Technology & Product Innovation SUPPLY & DEMAND General World Power Tools Production Table - World Power Tools Production by Region World Power Tool Demand by Product Table - World Power Tools Demand by Product Electric Drills Saw Blades Other Electric Pneumatic Engine-Driven & Other World Power Tool Markets Table - World Power Tools Demand by Region & Market Freedonia Industry Study

6 Market Environment IV. Professional Consumer International Trade Flows Table - World Power Tools Net Exports by Region NORTH AMERICA General Overview Supply & Demand United States Canada Mexico V. LATIN AMERICA General Overview Supply & Demand Brazil Other Latin America VI. VII. WESTERN EUROPE General Overview Supply & Demand France Germany Italy Netherlands Spain Sweden Switzerland United Kingdom Other Western Europe EASTERN EUROPE General Overview Supply & Demand Poland Russia Other Eastern Europe VIII. AFRICA/MIDEAST General Overview Supply & Demand South Africa Turkey Other Africa/Mideast IX. ASIA/PACIFIC General Overview Supply & Demand Australia China India Japan South Korea Taiwan Other Asia/Pacific X. INDUSTRY STRUCTURE General Industry Composition Table - World Power Tool Sales by Company, Market Share Chart - World Power Tools Market Share, Product Development & Manufacturing Marketing Distribution Financial Requirements Mergers, Acquisitions & Industry Restructuring Table - Selected Acquisitions & Divestitures..192 Cooperative Agreements Table - Selected Cooperative Agreements Company Profiles Order form on last page 5

7 Market Environment The Market Environment Section discusses key indicators that drive demand for power tools, including demographic and social trends and Freedonia s uniquely developed macroeconomic indicators. MARKET ENVIRONMENT This information provides you with an understanding and an analysis of the climate in which the global power tools industry operates and helps you build your market strategy to sustain longterm growth. Power Tools Pricing Patterns Prices of power tools vary across product types, from a few dollars for accessories such as drill bits to hundreds of dollars for advanced items such as power drills. Pricing also varies within product categories. For example, electric grinders can SAMPLE PAGE range anywhere from about $30 to over $150. On average, prices of tools are expected to increase two percent annually through Advances will be limited by continued pricing competition, especially in light of the consolidating distribution channels in the industry. In addition, competition from lower cost producing nations will continue to limit gains. However, these factors will be offset somewhat by a changing product mix in favor of more powerful tools, and rising raw material costs. Maintaining established trends, the product mix of tools will continue to shift in favor of higher-end, power products as professional users seek more reliable and efficient capital equipment to improve profitability. The consumer market will also shift somewhat in favor of more powerful and expensive tools, as do-ityourselfers (DIYers) and hobbyists seek professional-grade equipment. The ability of producers to develop higher-end, new technology for power tools will enable pricing gains to continue through Professional users and avid DIYers are often willing to pay a premium for improved performance. Opportunities also exist for developers of more ergonomically designed products, which carry a premium in the professional market. However, pricing is expected to become increasingly competitive due to pressures from producers with low production costs. Pricing growth in developed markets will also be slowed somewhat by weakening demand, and by the consolidation of distribution channels to the retail market. As the major chain home improvement outlets continue their supplantation of small hardware stores, these chains are able to negotiate lower prices in Copyright by The Freedonia Group, Inc. 6 Freedonia Industry Study

8 World Supply & Demand The World Supply and Demand Section highlights the key issues that have affected the global power tools market over the past ten years and summarizes contributing growth factors. This information helps you: Focus your sales and marketing efforts on high growth areas. Propose new areas for development SUPPLY & DEMAND Electric Power Tools - Drills Electric drill demand is forecast to rise 6.3 percent annually to $4.1 billion in SAMPLE PAGE 2005, spurred by the rising level of construction expenditures, particularly in developing regions. In addition, gains will be boosted by the development of improved cordless types, which will prompt replacement demand among both professional and DIY users. Gains in the consumer market will also result from the development of multifunctional drills with varied attachments (e.g., all-purpose driving tools for use with drill and screwdriver bits, and square drive sockets). Consumers in developed nations, especially casual DIYers, seek multipurpose tools as a way of minimizing their tool costs. However, these factors will be offset somewhat by the slowing macroeconomic outlook in the vast US market, which will limit advances in the industrial sector. Electric drills are the most versatile and most commonly used power tool. In addition to drilling holes, electric drills can be fitted with numerous accessories, World Power Tools including Demand those by that sand, Region grind, & polish Market and drive screws and nuts; such accessories (million make electric U.S. dollars) drills essential all-purpose tools. Product trends include escalating voltages. This increase in voltages is due in part to rising end-user demand for Item more powerful 1990power 1995 tools, and 2000 the small price 2005difference 2010between voltages. As a result, cordless drills with lower voltages (e.g., 7.4 volts) have faded from the World Population (millions) market $ power tool/capita Innovations in electric drill technology include Bosch s DUAL SOURCE system, World available under the SKIL brand name. DUAL SOURCE tools have a corded backup By Region: North America: United States Canada & Mexico to run the tool and recharge the battery after the battery has been exhausted The DUAL 3290 SOURCE 4600 line includes 6665 a 9.6-, and 14.4-volt drill/driver, light and inflator. This 425 drill features 485 a six-position 775 torque 1065 control 1400 and textured, soft-grip T- Latin America handle Western Europe SAMPLE 5510 TABLE Eastern Europe In addition to 785 the continuing 585 popularity 775 of 1050 cordless drills, 1350 another major trend in Africa/Mideast the drill sector 300 is the ongoing 410 diffusion 610 of keyless 875 chuck 1120 drills. In keyless drill Asia/Pacific: China Japan Other Asia/Pacific By Market: Professional Consumer Copyright by The Freedonia Group, Inc. Order form on last page 7

9 Supply & Demand by Country/Region The Market Sections analyze demand trends and consider the threats and opportunities in each country and region. Spain - Supply & Demand WESTERN EUROPE Spain comprised a $470 million market for power tools in 2000, largest among the non-g7 nations of Western Europe. Moreover, growth in power tools demand SAMPLE PAGE exceeded the regional average from 1995 to 2000, despite minimal growth in population size. These gains are the result of the improved capital investment outlook in recent years, a turnaround from the declines experienced in the earlier part of the decade. Shipments of power tools from facilities located in Spain reached $305 million in 2000, which left the country with a trade deficit in these products. Net imports comprised about 35 percent of domestic demand in 2000, with significant activity China - Power Tool on both Supply the import & and Demand export sides. The Spanish industry finds key export (million markets U.S. throughout dollars) the EU area. In addition, the US is a major external supplier to the Spanish market, along with its West European neighbors and Asian-based producers. Item Population (million) The market for power tools in Spain is projected to rise five percent per year $ power tools/capita t hrough million, a slight Power Tool Demand deceleration from the recent historical 980 performance 1750 and in line with the forecast By Type: average pace for the region as a whole. Gains will result from Electric Tools 70 the 160continued 415healthy 705 capital investment 1280 outlook in the nation. Drills Power tools shipments from facilities in Spain will expand Electric Saw Blades percent per annum through 2005 to $420 million, above the Other pace of domestic demand, although a widening in the country s Pneumatic Tools 15 40SAMPLE 90 TABLE Engine-Driven & Others 15 trade 35 deficit will 80 continue. 130 Among 225the multinational producers active in Spain are Actuant, Hitachi, Makita, Stihl and Textron. By Market: Professional Consumer net exports Power Tool Shipments Copyright by The Freedonia Group, Inc. 8 Freedonia Industry Study

10 Industry Structure Sample page from Freedonia Industry Study Gain #1111 a better World global Security understanding Products of & Systemscompetition and analyze your your company's position in the industry with information about: industry composition Product Development & Manufacturing INDUSTRY STRUCTURE market share product development manufacturing marketing distribution financial requirements mergers & acquisitions industry restructuring cooperative agreements Despite the mature nature of much tool technology, new product development is important in most power tool segments, as moderating growth opportunities have resulted in increased efforts among manufacturers to develop improved products to sustain market share. Since the potential for truly innovative new tools is limited, most research and development activity revolves around making general performance improvements and enhancing the ergonomic qualities of tools. SAMPLE PAGE Unlike hand tools, which have existed for centuries, power tools offer significantly more room for innovation. The design of more powerful, longer-lasting cordless products allowed by advances in battery technology continues to be one of the most significant areas of product development. Other trends in new products include tools targeting specific applications and the development of quieter tools. Due to the specialized requirements of certain tool users, producers often must work closely with end users in new product development. Motor vehicle applications are among the most commonly specialized, due to the use of complex systems and smaller engine compartments by automotive OEMs. These factors have led to the increasing need for specialized products, both in terms of function and size. To target these end users, tool producers must closely coordinate product development with auto producers, mechanics and technicians. Ergonomics is another key research and development issue for power tool producers. The introduction of tools that are more comfortable and cause less fatigue stimulates replacement purchases, especially among professionals and other frequent tool users. For power tools, ergonomics are improved by reducing the weight of the tool and making the grip more comfortable. Basic power tool manufacturing requirements do not in themselves present a major barrier to entry in the tools industry, as most of the production processes entail Copyright by The Freedonia Group, Inc. Order form on last page 9

11 Company Profiles The profiles section analyzes 29 companies active in the world power tool industry. These profiles represent a sampling or cross-section of the types of companies involved in the industry. Divisions, subsidiaries, joint ventures, etc., are discussed under appropriate parent companies. Electrolux AB S:t Goransgatan Stockholm Sweden COMPANY PROFILES Sources for profiles included: Information provided by key staff members in the respective companies Annual reports 10-K reports Security analysts reports Corporate product literature Frigidaire Home Products 250 Bobby Jones Expressway Augusta, GA Electrolux operated in four business segments in 1999: Household Appliances, Professional Appliances, Outdoor Products and Other. In 2000, the Company reorganized into two segments: Consumer Durables and Professional Products. Electrolux had 2000 sales of $13.6 billion, down from $14.5 billion in Of SAMPLE PAGE the Company s 1999 sales, $7.2 billion were to Europe, $5.8 billion were to North America and $1.4 billion were to the rest of the world. The Company employed 86,270 in The Company is active in the world power tools industry through its Professional Products segment. The segment is grouped into two divisions: Outdoor Products and Indoor Products. Chainsaws, clearing saws, landscape maintenance equipment and power cutters are manufactured by the Outdoor Products division, which generated 2000 sales of $877 million. According to the Company, Electrolux is a leading chainsaw marketer globally with a market share of 40 percent. Major operations for the Outdoor Products division are located in Europe and North America. In Europe, chainsaws are sold under the HUSQVARNA and JONSERED brand names. Produced by Sweden-based Husqvarna AB, HUSQVARNA chainsaws are Copyright by The Freedonia Group, Inc. 10 Freedonia Industry Study

12 Companies Profiled Actuant Corporation Applied Power Incorporated Enerpac American Tool Companies Incorporated Atlas Copco AB AEG Power Tools Alliance Tools Chicago Pneumatic Tool Company Desoutter Georges Renault Milwaukee Electric Tool Corporation Tool Technics NV Best Power Tools Company Black & Decker Corporation Emhart Fastening Teknologies Blount International Incorporated Oregon Cutting Systems Bosch (Robert) GmbH S-B Power Tool Company LLC Cooper Industries Incorporated Deere & Company Homelite Incorporated DEPRAG-Schulz GmbH and Company DESA Holdings Corporation Electrolux AB Cushion Cut Dimas Frigidaire Home Products Husqvarna AB JKS Lamage Jonsered Magnum Diamond & Machinery Emerson Electric Company Ridge Tool Company Hilti Corporation Ammann Holding AG Hitachi Limited Illinois Tool Works Incorporated Duo-Fast Corporation ITW Ramset/Red Head Paslode Ingersoll-Rand Company Kulkarni Power Tools Limited Makita Corporation Matsushita Electric Industrial Company Limited Pentair Incorporated Delta Machinery DeVilbiss Air Power Company Porter-Cable Corporation Ryobi Limited SENCORP Senco Products Incorporated Snap-On Incorporated The Stanley Works MAC TOOLS Stihl (Andreas) AG & Company TechTronic Industries Company Limited Textron Incorporated Fairmont Klauke Greenlee Textron TRUMPF Group Order form on last page 11

13 Forecasting Methodology Freedonia does not just collect and reprint data; Freedonia develops data. Our analysts thoroughly investigate an industry by extensively interviewing key industry participants and analyzing information from sources such as associations, government and trade literature. Once this research is complete, Freedonia establishes one set of forecasts. All writing, editing and forecasting is done in-house to assure quality and consistency. In cases where data does not exist, Freedonia develops the data based on input/output ratios, bills of materials and flow charts. The following chart summarizes Freedonia's methodology. The Freedonia Economics Group Consistent framework of indicators on... Gross Fixed Investment Gross Domestic Product World Population... and many others Freedonia In-house Research Quantitative forecasting Industry structure & market share analyses Product analyses & forecasts Methodology for World Power Tools Extensive Interviews Key participants Industry experts End-users Proprietary Electronic Database Trade publications Government reports Corporate literature Online databases... and many others 12 Freedonia Industry Study

14 About The Freedonia Group The Freedonia Group, Inc. is a leading international industry study/ database company. Since 1985, Freedonia has published over 1,600 titles covering areas such as plastics, chemicals, coatings and adhesives, building materials, industrial components and equipment, health care, packaging, household goods, security, and many other industries. Freedonia has produced a wide variety of titles, including: Power & Hand Tools Batteries Machine Tools - Private Companies Report Insulated Wire & Cable Because Freedonia is a reliable information source, our forecasts are cited in numerous publications such as The Wall Street Journal, The Financial Times, National Home Center News and Do-It-Yourself Retailing. Advantages of Freedonia Reports In-house operations Because all of our staff work at the same location, interaction between analysts and departments provides a strong system of checks and balances. Consistency Our Economics Group develops indicators that are used by all analysts. Therefore, every Freedonia study is based on a consistent set of economic assumptions (GDP, gross fixed investment, world population, etc.). Reliable forecasts Because all of our forecasts consider the environment in which a product or industry is operating, as well as threats and opportunities to the market, Freedonia forecasts are reliable indicators of future performance. One-on-one interviews All studies are produced by conducting interviews with key industry participants and end-users. Proprietary electronic database Freedonia s analysts can tap into an extensive in-house electronic database containing corporate literature (including private company information), trade publications, government reports and many other sources of information. Order form on last page 13

15 About Our Customers Freedonia's clients include major US and international companies in the manufacturing, services, consulting and financial sectors. Typical purchasers of Freedonia studies : Key Executives Corporate Planners Market Researchers Financial Analysts Information Centers New Product Developers Merger & Acquisition Specialists Since 1985 we have provided research to customers ranging in size from global conglomerates to one person consulting firms. More than 90% of the industrial companies in the Fortune 500 use Freedonia research to help with their strategic planning. Some of Freedonia's customers in the power tool industry include: Atlas Copco, Black & Decker, Deere & Company and Snap-On Incorporated. 14 Freedonia Industry Study

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