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Industry Profiles

Although the development of India's ball and roller bearing industry is not quite enviable, it can be said without contradiction that India has relatively strong base for the manufacture of bearings. There are about 12 large and medium units which together turn out over 100 million bearings every year.

Almost all the units have foreign collaboration. The Indian Bearing industry makes around 500 types of bearings as against over 30,000 types of bearings being used by the Indian industry. Bulk of these are only of standard types and are used mostly in low-technology areas like fans, electric motors, water pumps, and by the automotive sector.

The current Indian bearings industry is worth Rs.3500 crore. In this, automotive segment accounts for 45 percent of the revenues, which amount to Rs 1,350 crores and the remaining 55 percent of revenues are being contributed by industrial demand. In the automotive bearings market, the organized segment manufactures cater to 50 percent of the demand. About 15 percent of the production is by the unorganized segment in India, and the remaining 35 percent of demand is fulfilled through imports. Out of the total revenues in the automotive segment, 60 percent of the revenues are contributed by the OEMs and the remaining 40 percent is by the demand from the aftermarket. There has been a growth of 15 percent in the aftermarket segment and OE demand has increased by more than 25 percent from the financial year 2005-06.

Though the demand from the aftermarket segment is increasing, the growth rate is declining compared to the year 2005 - 06. In the aftermarket, 6 percent demand is from the engineering applications segment, 5 percent from LCV segment, 4 percent from MUV segment, 8 percent from car segment, 11 percent from tractor segment, and the remaining 15 percent from automotive ancillary segment. Rest of the 50 percent demand is from the Railway sector.

The market for automotive bearings is growing at a rate of almost 27 percent per annum in the year 2005 - 06. This is mainly because of multiple models in every vehicle segment entering the market.

The overall automotive industry has grown at the rate of 34 percent per annum from the year 2004. Hence, a definite increase in the demand for bearings in the OE segment is anticipated. Aftermarket demand for automotive bearings is increasing, but at a slower rate as compared to the growth in vehicle population. Manufacturers are expecting sustained growth of 15 percent in the aftermarket mainly due to increase in population of two wheelers, passenger cars, and utility vehicle segments.

Some of the restraints faced by the bearings manufacturers are longer life due to improved technology, improved fuel quality, and better maintenance of the vehicles. This reduces the replacement rate, which in turn leads to slower growth in the aftermarket demand. Increase of imports due to a 5 percent decrease in duty rates is affecting the market for the domestic participants.

Vehicle owners prefer imported bearings due to lower costs. Cost difference is almost 50 percent between the domestic bearings and the imported bearings. For example, the bearings manufactured in India are priced at Rs.25 and the bearings imported from China are priced at Rs.12 in the year 2004 - 05. There is an increase in imports from China and South Korea due to lower costs and greater demand.

There has also been increase in prices of domestic brands as the cost of production has gone up due to increase in steel prices. Indian manufacturers are also facing a threat from the spurious parts manufacturers who manufacture duplicate parts and sell them in the names of both domestic and foreign companies. This is the biggest threat to the Indian manufacturers as this eats away their share in the aftermarket and affects their growth.

Indian manufacturers are taking multiple steps to overcome the challenges facing the Indian market. Manufacturers are investing more in research to develop better technologies, which increase the life of the bearings. Companies are giving a warranty of 1 to 2 years on the bearings.

Generally, bearings have been standardised internationally i.e. the boundary dimensions of the product have been laid down.

However, with moderate modifications in the standardised designs, bearings have been manufactured and used for various applications the world over.

The manufacturing activity in the country started in the late 40's, with the production of small and standard bearings. The Indian industry today manufactures small and medium bearings mainly in five categories, i.e. ball bearings, cylindrical roller bearings, taper roller bearings, spherical roller bearings and needle roller bearings.

The popular size range is generally restricted to 140 mm OD, though larger sizes are also manufactured by some units.

Structural deficiencies
The bearing industry also suffers from structural deficiencies, which are making it less competitive in the global market. Low volumes in the domestic industry does not make it feasible to induct technology in the form of high-end automation. This ultimately affects quality. In addition, the industry is fragmented with no economies of scale. Another problem which domestic manufacturers face is that of high cost of imported equipment. Machine tools and precision measuring equipment have to be imported and they invite a custom duty of 25% thus making project costs high and un remunerative to undertake. The third problem is of cost-competitiveness due to higher import duties on raw materials (steel tubes, steel bars, grinding wheels etc).

The industry generally does not manufacture special bearings/high precision bearings. Some small scale units also manufacture bearings, but these generally cannot compare in quality or volume with those from the organised sector though a few do make some special designs. The organised sector manufacturers have generally imported the technology from internationally renowned manufacturers.

The rolling bearing manufacturers in India mostly manufacture bearings based on the original design and specifications obtained from their collaborators. Generally there is a limited facility available with the bearing manufacturers for research or development of new bearings of indigenous designs.

However, commendable efforts have been made by some units to design and develop bearings, particularly larger diameter ball and roller bearings, to suit specific customer requirements. There are also small scale units producing bearings in small quantities from imported components by assembling them. The following are the major manufacturers of bearings in India:

S.No. Manufacturing Bearings
1 Associated Bearing Company Ltd., Pune (Maharashtra)
2 Asian Bearings Company Ltd., Hosur (Tamil Nadu)
3 Karnataka Ball Bearing Corporation Ltd., Mysore (Karnataka)
4 HMT Ltd., Hyderabad (Andhra Pradesh))
5 Tata Iron and Steel Company Ltd., (Bearings Division) Kharagpur (West Bengal)
6 Shriram Bearings Ltd., Ranchi (Bihar)
7 National Engineering Industries Ltd., Jaipur (Rajasthan)
8 FAG Precision Bearings Ltd., Vadodara (Gujarat)
9 Antifriction Bearing Company Ltd. Bharuch (Gujarat), Lonavala (Maharashtra)
10 Union Bearings Manufacturing Co., Porbunder (Gujarat)
11 Needle Roller Bearing Co. Ltd., Thana/Jalna (Maharashtra)
12 Shriram Needle Industries Ltd., Ranchi (Bihar)
13 Deepak Insulated Cables Ltd., Mysore (Karnataka) (Needle Bearings Division)
14 Austin Engg Company Limited Junagadh , Gujarat
15 Karnataka Ball Bearing Co Ltd., Mysore
16 Mysore Kirloskar Ltd, Harihar (Karnataka)
17 Needle Roller Bearings Ltd, Thane
18 Needle Roller Bearings Ltd., Waluj
19 SKF India Limited , Chinchwad, Pune
20 SKF India Limited, Bommasandra, Bangalore
21 Timken India Limited, Jamshedpur
22 ZKL Bearings India Pvt. Ltd., (setting up manufacturing)

Bearings of various types and sizes are used for different applications.
The major applications are as follows:

  • Automobiles
  • Railways
  • Electrical Motors
  • Electric Fans
  • Diesel Engines
  • Pumps
  • Machine Tools
  • Textile machinery and
  • Other heavy industries
  • Steel Plants
  • Sugar Plants
  • Process Plants
  • Heavy Engineering Industries
  • Heavy Earth Moving Equipment
  • Cement Plants
  • Power Generation Units

The demand for bearings cane be clubbed under following Categories:

A. Original Equipment Manufacturers (OEM) Market
The OEM market for bearing represent the demand arising out of the original vehicle and industrial manufacturers. The demand for the OEM market directly depends upon the growth in user industry. OEM market accounts for 40% of total demand of bearing industry. This market is characterized by requirements of high quality, stringent delivery norms and lower margins.
OEM’s have been facing price competition in their own markets, continue to exert price pressure on the local bearing suppliers. The bearing capacity available in the country is in excess of demand, resulting in price reduction. The OEM bearing market is likely to witness better days ahead on account of up swing in automobile industry and manufacturing sector.

B. Replacement Market
OEM demand is mostly generated in Automobile, Machine manufacturer , Plants manufacturers, where in the bearings is used as part of the new equipment or machinery.
Replacement Demand is the after demand where as a part of the maintenance of the machines or rotating machine , the bearings are replaced by new bearings after it is failed as natural life deterioration / wear or tear or due to premature failures and need replacement The replacement market represents the demand arising on account of replacing the used and worn-out bearings. The size of replacement market is dependent on equipment population and frequency of maintenance. Replacement market accounts for 40% of total demand for bearing industry. The margins in this market are relatively higher placed as compared to OEM market.
The replacement market is highly price sensitive and has higher share of unorganized players and cheaper imported bearings. Exhibit4 represent the bearing demand per sector.

Bearings Industry

Figure : Bearing Demand Per Sector.

In the last two years, Indian automobile and industrial sectors are facing a increased market and economy growth.
This has led to higher growth in OEM segment and higher growth in replacement demand. The organized players have been concentrating on improving share in the replacement market, which earlier was dominated mostly by the small scale and cottage industries.

Bearings worldwide were doing significantly better. Orders were increasing globally and were forecast to grow 6.5 percent per year through 2005 to $42 billion. With supply levels remaining high worldwide, bearing prices overall were stable and not expected to rise in 2003. Conversely, prices for imports were expected to increase in 2003. As bearings from China came into the United States, selling at below market values, the federal government has levied anti-dumping duties of up to 59.3 percent. Lead times for all bearings continued to fall 10 to 20 percent with 60 percent of buyers receiving product within a week, according to one survey. Average lead time was about 2.6 weeks, down 19 percent from one year ago.

Supply and demand for different bearing designs - ball, roller, etc. - can vary based primarily upon the types of applications most prevalent in the country's industrial sector. But because each of the major anti-friction bearing designs (i.e., ball and roller, with other types tending to be derived from the major designs) is used in such a wide and diverse array of settings, most countries that comprise significant bearing markets (i.e., over about $100 million per year in annual sales) utilize both types in relatively large amounts.

While the industrialized nations tend to exhibit the largest and most mature (and thus most cyclical) bearings markets, the fastest growing markets are usually found within the developing nations of Asia, Latin America and (to a lesser extent) Africa/Mideast. Many such countries have been reforming and liberalizing their economies in recent years, in order to attract external investment capital and develop and expand their industrial sectors.

Industrial machinery applications dominate the world bearings markets, accounting for over half of total global demand. Industrialization programs in developing countries tend to involve substantial amounts of such machinery, and while in many cases these countries import machinery already incorporating bearings, the aftermarket tends to be sizable. The motor vehicle sector comprises the second largest application for anti-friction bearings in value terms, although it is far smaller than its industrial machinery counterparts

Investments and implementation of new production technologies continually improve productivity. With very rapid scientific advances, the bearing technology cycle has been squeezed into shorter periods so that productivity has been growing faster than bearing end-markets. This puts continuous pressure on the industry to consolidate.

The entry of China, for example, into world markets has not only created additional capacity, but also lowered prices of some bearings to levels not seen since the 1960s.

The China factor has also cut into some of Japan's exports, thus impacting Japan's incountry capacity (as Thailand and Singapore did with small ball bearings) and the United States by lowering general price levels. Eastern Europe, India, and other areas are developing in a similar pattern.

In addition, bearing materials and bearing quality have improved and extended bearing life. Longer bearing life reduces the demand for replacement bearings, and thereby, further contributes to surplus capacity. Lastly, the closed Japanese market contributes to overcapacity in slow economic times elsewhere in the world.

The international manufacturers have directed the thrust to higher precision, coupled with high productivity. Their efforts are concentrated on improving the quality of the bearings to the highest levels possible. Thus, the life of bearings would be improved, they would carry higher loads and the noise levels would be reduced to the minimum.

Though bearing sizes and nomenclature have been standardised, design modifications do take place continually in order to improve the overall performance of the product. New products as such, may not be a significant area of concentration. With the onslaught of excellent quality volume production by the Japanese manufacturers, some bearing manufacturers have moved towards bearings with special applications, including ready assemblies that carry rolling bearings integrated into them.

Newer materials such as plastics and even ceramics have been experimented with and developed for special applications. Other manufacturers have re-organised to bring in economy of large volumes, experimented and developed, such as use of plastics and even ceramics.

The pace and achievement of the above mentioned goals in bearing manufacture can directly be linked to innovations in machine tools, process technology and material properties. In machine tools, the stress is constantly on improving the precision levels and productivity.

Automation at every stage is most common.

This is done within the machine and in transfer from machine to machine into line manufacture, to achieve close control on operations and monitor the pre-process corrections.

India V/s China Bearing Industry Competitiveness

In resent years, with the rapid development of machinery industry, Chinese bearing industry is developing at a speed higher than national economy. A lot of national key engineering projects, such as delivery of west gas to the east, transmission of west electricity to the east, transference of south water to the north, Three Gorges reservoir on the Changjiang River, Beijing Olympic Games in 2008, and Shanghai World Exhibition in 2010, will need great amount of machinery as well as great amount of bearings.

This situation will provide large market space for bearing industry development. It is estimated that in a few years, bearing market will grow at a speed of over 10%.

In 2005, market capacity of Chinese bearing industry was nearly 5 billion sets.

Major demand for bearings in China in near future
According to analysis, major demand for bearing products in China in near future will be in four categories.

First category is bearings for automobile and motorcycle. These bearings have large demand and high additional value. This category includes hub bearing, separating bearing in clutch, shaft-connecting bearing in water pump, compressor bearing in air conditioner, bearing in gear box, bearing in engine, and so on.

Second category is bearings with high technology and high reliability, such as bearing in locomotive, passenger train and freight train, bearing in steel rolling mill, and bearing in engineering machinery.

Third category is sealed bearings of high precision and low noise, such as spindle bearing in machine tool, bearing in electric motor, bearing in soft and hard drive of computer, and so on.

Fourth category is bearings for agricultural machinery and agricultural vehicle.

China aims of world largest bearing producer
Since bearing industry is the industry of labor intensity and technology intensity. With labor cost increasing continuously, many foreign bearing companies are entering China. Ten largest bearing companies in the world have established factories of joint-venture or of their own investment in China. Recently, new projects and new factories are being constructed with increasing scale. Famous bearing companies, such as NSK and Timken, are supplementing investment to set up factories in China.

Comparative Advantage of machinery industry in China
Consider the Luoyangn province which is like Jaipur in India where the first bearing enterprise stated in China today has a strong foundation of machinery industry, as there are many large machinery factories in the city. China First Tractor Group, Luoyang Bearing Group, Luoyang Copper Processing Group, Zhongxin Heavy Machinery Company and Luoyang North Ek Chor Motorcycle Company are all well-known enterprises in China and in the world.

There are 500 thousand workers and 120 thousand technicians in the city. There are more than 300 scientific and technical research institutes, in which 14 are national research institutes, 6 are national technology centers and 6 are national examination centers.

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