What is the impact of the "price increase trend" caused by foreign instrument giants on the domestic instrument market?
In recent years, with the continuous development and changes of the global economy, various industries are facing different challenges. In the instrumentation industry, a significant phenomenon is that foreign giants have announced an increase in product prices. From components to complete machines, this "price surge" has affected the entire industry chain and caused significant market fluctuations.
A widely circulated practice in the industry is that almost every year foreign manufacturers adjust the prices of their products, and the so-called adjustment is actually a price increase. It is reported that since the end of 2023, several well-known overseas instrument and meter companies have announced price increases for their products.
The rise in raw material costs is an important factor driving up the prices of instruments and meters. As is well known, the prices of raw materials such as copper, aluminum, and plastic have continued to rise in the past few years. For instrument manufacturers that rely on these materials to produce components and complete machines, the cost pressure increases accordingly. In order to maintain profit margins, many foreign brands have to choose to increase their selling prices.
The rise in global logistics costs cannot be ignored. Since the post pandemic era, international shipping costs have skyrocketed, coupled with the impact of various trade barriers, resulting in a significant increase in cross-border transportation costs. This is undoubtedly adding insult to injury for foreign instrument and meter companies that rely on global supply chains. In order to ensure the normal operation and profit margin of enterprises, price increases have become an inevitable choice.
The rise in labor costs is also an undeniable factor. With the development of the economy and the increasing trend of population aging, labor costs continue to rise. Especially in some developed countries, labor shortages are becoming increasingly severe, and companies need to pay higher salaries to attract and retain talent. In addition, as people's demands for work environment and welfare benefits increase, companies are constantly investing in improving employee welfare. These factors have led to a continuous increase in labor costs for enterprises, which in turn affects product pricing.
Exchange rate fluctuations have also had a certain impact on the prices of instruments and meters. Due to the fact that most foreign instrument and meter manufacturers sell their products globally, exchange rate fluctuations can have an impact on their revenue. When the domestic currency depreciates, the cost of imported components will increase, thereby increasing the manufacturing cost of the product. On the contrary, when the domestic currency appreciates, the price of exported products relatively decreases, but in order to maintain profit levels, companies may choose to increase the selling price of their products in the domestic market. The uncertainty brought about by such exchange rate fluctuations makes it even more uncertain for companies to set product prices.
The changes in the market competition environment are also one of the factors affecting the prices of instruments and meters. With the advancement of technology and the development of the global trade market, competition in the instrumentation industry is becoming increasingly fierce. In order to stand out in the competition, major manufacturers have increased their R&D investment and launched more competitive new products and technologies. However, the development and production of new products require a significant amount of capital investment, and the resulting costs are ultimately reflected in the product price. Therefore, the pressure of market competition has also to some extent driven up the prices of instruments and meters.
For domestic instrument manufacturers, in order to cope with the wave of price increases, they may choose to follow up with price hikes to maintain their profit levels and competitiveness. In this way, the overall price level of the domestic instrument market will be affected, which in turn will affect the healthy development of the entire industry; For domestic distributors who cooperate closely with foreign giants, they may face greater operational pressure, and price increases may lead to customer loss; For some research institutions and enterprises that rely on imported high-end instruments, it may be necessary to re evaluate the cost and feasibility of the project.
The "price surge" from components to complete machines is a real challenge faced by foreign instrument and meter manufacturers. In this context, how to balance costs and market competitiveness, and how to maintain brand image and consumer relations, will be important issues facing these large factories. In the future, how this trend will develop is worth our continuous attention.
(Source: China Instrument and Meter Industry Association)
