Demand for filters in China is projected to increase 14.4 percent per year through 2011 to 41 billion yuan, according to a study by The Freedonia Group (www.freedoniagroup.com). The study, titled Filters in China, predicts advances in the country will be stimulated by solid growth in motor vehicle production in China, which together with a growing vehicle park, is expected to drive both OEM and replacement filter demand. In addition, growth in manufacturing output, building construction spending, and urbanization of the population are all forecast to stimulate demand for various types of filters. Government efforts to alleviate air and water pollution and to improve the quality of drinking water by enacting more stringent regulations and standards, will also contribute to gains, according to Freedonia. Meanwhile increased demand for newer products, such as motor vehicle cabin air filters and many varieties of household air and water filters, and the development of a significant aftermarket within these segments is expected to aid growth as well.
Demand for air filters is expected to post the fastest growth of the three major product types through 2011, spurred by rising manufacturing output of durable goods such as HVAC equipment and electronics and nondurable goods such as chemicals and pharmaceuticals. Rising concerns about air pollution in China will also boost demand for air filters used in a variety of markets. The internal combustion engine and related filters segment (e.g., air intake, oil, fuel, and cabin air) accounted for 62 percent of total demand in 2006 and will climb at a double-digit annual rate through 2011, according to Freedonia. Sales of fluid filters will be fueled by an acceleration in nonagricultural water use and ongoing urbanization. The implementation of tougher water and wastewater treatment regulations will also spur filter sales. Fluid filter sales will also be driven by the expected growth in production of industrial machinery and equipment, which often use fluid power filters.
The motor vehicle market will continue to account for the largest portion of demand through 2011. The high volume of air intake, oil, and fuel filters sold at the OEM level and in the large aftermarket will more than offset their relatively low unit prices. The water and waste treatment segment of both the utilities and consumer markets is projected to post the fastest gains. Demand for filters used by utilities will be driven primarily by the need to comply with increasingly stringent air and water pollution regulations, and the construction of numerous new power plants, water and wastewater treatment facilities, and waste incinerators. Freedonia predicts consumer market sales will be bolstered by rising personal income levels and growing concerns about air and water quality.