SOURCE: Freedonia Group, Inc.

September 26, 2007 12:42 ET

Demand in China for Elevator & Escalator Products & Services to Reach 62 Billion Yuan in 2011

CLEVELAND, OH--(Marketwire - September 26, 2007) - The market for elevator and escalator products and services in China is projected to increase 9.7 percent per year through 2011 to 62 billion yuan. Advances will be fueled by strong new construction expenditures, especially on multifamily buildings, and on office, commercial, institutional and industrial establishments. An increasingly large installed base of elevators and escalators will also contribute to market gains as it creates significant opportunities for the maintenance/repair service business. Although prices for elevator/escalator products have fallen over the last decade, value gains will be helped by expected price increases in the future. These and other trends are presented in "Elevators in China," a new study from The Freedonia Group, Inc., a Cleveland-based industry market research firm.

The product segment will continue to account for nearly three-quarters of the total elevator/escalator market through 2011. This proportion differs considerably from mature markets in Western countries. The higher proportion of products reflects in part China's industrialization process, since favorable new construction expenditures, which accompany industrialization, offer better opportunities for installation of new elevator/escalator systems. In the service segment, gains will be bolstered by a large base of installed systems (which offer favorable opportunities for maintenance/repair service business) and strong growth in new system sales (requiring installation services).

In 1996, two-thirds of domestic demand for elevator/escalator products in China was met by imports from industrialized countries like the US, Japan and Germany. Since then, China has made tremendous strides in elevator/escalator manufacturing, mainly due to foreign investment. As a result, China now has a sizable trade surplus in elevator/escalator products, which totaled 4.6 billion yuan in 2006. Exports totaled 6.1 billion yuan in that year, accounting for 18 percent of industry shipments. Common export destinations for Chinese elevator/escalator products include Southeast Asia, the Middle East and Eastern Europe. Elevator/escalator imports, on the other hand, were a comparatively small 1.6 billion yuan in 2006, representing approximately five percent of domestic demand.

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