Bearings Market – Procurement Best Practices & Sourcing Strategies

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Bearings Market Global  Size:

ELINT Market Research’s recent study projects that the global bearings market size was reported approximately $142 billion in the year 2022. Also, this market is anticipated to further grow and reach $186 billion at a CAGR of 12% in the year 2025.

This rapid expansion illustrates that the bearings market is massively adopted by multiple end-user industries including automotive, heavy industries, consumer durables, railways, and aerospace. Thus, the bearings sector plays a crucial role in fulfilling the requirements of these sectors, for example, conducting efficient mechanical operations.

Bearings Market Definition:

Bearings operate as the key components in different kinds of mechanical systems. Their major work includes enabling smooth motion, lowering friction, and supporting loads in motorized infrastructures.

The bearing industry manufactures and distributes good quality bearings to those different industries that require such devices that can facilitate friction-free rotation among their industrial operations.

Basic Drivers of the Bearings Market:

1. The Rise of Globalization Increases Demand for Bearings Market –

The advancement of globalization is highly influencing the bearings market. Globalization comprises the exchange of products, services, knowledge, and ideas on an international level, which is establishing a more interconnected world.

Hence, as multiple businesses or sectors are extending their industrial operations across borders, the need for trustable mechanical systems is also increasing. In this context, bearings are very crucial to enabling the smooth movement in the functioning of machinery.

2. Electrification Causing High Requirement for Bearings –

Nowadays, the automotive industry is swiftly transitioning towards electric vehicles, and bearings operate as a key element in electric motors of EVs. Hence, this transformation toward electrification is automatically causing demand for the bearings market.

3. Bearings Market Witnesses Growth Due to Evolution of Renewable Energy Sources –

Investments and advancements in renewable energy are another major factor in propelling the bearings market growth. Multiple sectors are investing in the development of renewable energy sources like wind and solar plants to reduce increasing carbon footprints. This pushes the requirement for bearings; since they function to harness wind energy into wind turbines and also manage difficult conditions within these turbines.

4. Diversification Expansion Propels Success into Bearings Industry –

Bearings are very capable and adaptable devices that can work for a broad range of sectors like aerospace, automobile, heavy machinery, etc. Hence, this diversification expansion is largely driving the bearings market.

This sector can fulfill the individual mechanical operations needs of these different industries, which automatically contributes to its sustained growth.

Bearings Market Challenges:

1. Extreme Competition Among Industry Players –

One of the major challenges that the global bearings market faces is rapidly increasing intense competition among its industry participants. Both domestic and global level manufacturers compete for market share. Hence, organizations try to make their products unique from others to be ahead in the race, which causes the market to experience challenges in managing profit margins.

2. Uncertainty in Economic Conditions –

Worldwide economic conditions such as downturns and devaluing currencies are two significant factors that can cause reduced industrial operations and certainly will impact the bearings demand in different sectors.

These uncertainties in the economy can also affect capital investments and production throughout industries. Therefore, because of these unpredictability factors, manufacturers find it difficult to estimate consumer demand, which affects stock management and the market’s general stability.

3. Troubles Due to Technological Rise –

Constant evolutions of technology are undoubtedly helping greatly all kinds of markets, but these technological advancements carry both opportunities and difficulties to the bearings market.

Various manufacturers working in the bearings sector are required to keep pace with emerging technical solutions like Industry 4.0 and IoT (Internet of Things), and also integrate them into their products. Hence, smaller manufactories with limited resources find it hard to make substantial investments in research and development activities.

Bearings Market Opportunities:

1. Development in the Automotive Sector –

The automobile industry is continuously developing and making innovations like electric vehicles (EVs). Whether they manufacture standard or electrical vehicles, both demand high-performance bearings to manage uninterrupted operations in their different automotive parts. Hence, the automobile industry is proving as a great opportunity for the bearings market.

2. Expansion of Wind Energy Plants –

The development of renewable energy sources is expanding among multiple sectors which is a noteworthy opportunity for the bearings market. Bearings are vital parts of wind turbines; they assist in managing rotating blades and guarantee smooth power generation.

3. Construction of Lightweight Bearings –

The rising attention towards advanced and lightweight materials to build bearings is a major opportunity for the bearings market. Lightweight bearings help automotive and aerospace equipment to operate more efficiently.

Thus, manufacturers should develop bearings employing lightweight materials like ceramic or composite, which can improve performance attributes during industrial operations.

Bearings Market Segmentation:

1. Type of Bearings –

The prominent segmentation for the bearings market depends on its types, which include roller bearings, ball bearings, plain bearings, etc. Each of them fulfills the particular operational requirements of different businesses.

2. End User Industries –

Multiple end-user sectors play a pivotal role in segmenting the bearings market such as automotive, heavy machinery, consumer durables, railways, and aerospace. In this context, the automotive industry possesses a significant market share of 57%, which implies that this sector utilizes bearings at a large level.

Further, those sectors that conduct different industrial processes have a 57% market share, and the remaining industries have an 8% stake.

3. Materials of Bearings –

Another key factor for segmentation is the material of bearings; since they can be built from different materials like ceramics, steel, and polymers. Steel bearings can help in heavy-duty operations, while ceramic bearings speed up the processes due to their lightweight nature.

Lastly, polymer bearings help protect from corrosion and friction because they are made of materials like nylon or PTFE.

Emerging Engagement Strategies of the Bearings Market:

New engagement strategies are emerging in the global bearings market, in which the first technique is to make partnerships with suppliers that have the best technologies. Thus, nowadays, manufacturers are making collaborations with such vendors to acquire high-performing bearings.

Moreover, in another strategy, businesses source bearings from quality suppliers or distributors depending on their order volume and lead time needs. This technique facilitates better management of stocks and guarantees a more effective manufacturing process.

Sales Channels in the Bearings Market:

The global bearings market comprises distinct sales channels for distribution. The first channel is OEMs (Original Equipment Manufacturers) which hold a notable share of 40% of bearing sales and assist in the direct supply of bearings to manufacturers.

The next channel is industrial distributors which constitute 21% of the market stock. Also, they work as mediators among producers and end users and ensure efficient allotment of bearings in a variety of industries. Moreover, the after-market category has a noteworthy 9% part of sales and the other channels have a 30% stake.

Impactful Cost Components of the Bearings Market:

In the worldwide bearings market, manufacturers must understand the major cost components to stay ahead in its competitive landscape. The first component is raw material prices which constitute approx. 50-55% of the total expenditure of bearings. Hence, any kind of variations in raw materials prices can prove troublesome for industry players. Moreover, the next cost element is labor and energy expenses which include 20–30% of the total bearings cost structure.

Negotiation Levers of the Bearings Market:

The manufacturers and suppliers working in the bearings industry must learn about useful negotiation lavers to survive. The first strategy is volume discounts; with this approach, bearings producers can reserve cost benefits by placing bigger orders and making long-term partnerships with distributors.

Another important strategy is rebate management, which enables manufacturers to bargain for better prices depending on pre-established sales targets or other performance indicators.

Moreover, guaranteed reduction agreements are a systematic method that guarantees a predetermined decrease in costs within a predetermined timeframe.

Further, the last negotiation lever is the performance & incentive structure which makes agreements between manufacturers and suppliers and they mutually agree upon some parameters. If suppliers fulfill the mentioned targets then they receive incentives. These accords balance the ambitions of both sides and promote a healthy partnership.

Sourcing Strategies of the Bearings Market:

Businesses must seek effective sourcing strategies to satisfy distinct industry demands. In the first approach, manufacturers can acquire sophisticated and customized bearings from global organizations or OEMs. On the other hand, when manufacturers want to obtain standard bearings, they can request distributors and regional or local suppliers.

High and Low Maturity Regions for Bearings Market:

The worldwide bearings market depicts distinct maturity levels across different nations. The high-maturity regions include China, the U.S., Japan, Germany, France, and Italy; in these nations bearing sector is flourishing at a stable and developed stage. Contrarily, low-maturity countries comprise India, Australia, the MEA (Middle East & Africa), Brazil, and Eastern Europe.

Contract Period in the Bearings Market:

The contract duration in the bearings industry is crucial to improving business connections between manufacturers and customers. The average contract period for bearings is 2–3 years in which producers guarantee that they are liable for a consistent supply of bearings to clients.

Leading Suppliers of the Bearings Market:

Some of the famous industry players in the global bearings market include IKO International  Inc., Minebea​, Nachi Technology Inc.​, FYH Bearing​, C&U Group Ltd., Luoyang Bearing Science & Technology Co. Ltd.​, Harbin Bearing Manufacturing Co. Ltd, LYC Import & Export Corp., Tianma Bearing Group Co. Ltd., NRB Bearings​.