A new report from Frost & Sullivan, 'World Proximity and Displacement Sensors Market', says that robust economic growth in emerging economies and the pursuit of production efficiency will likely drive the growth of the world proximity and displacement sensors market in the coming years.

At the same time, increasing price pressure represents a big challenge for market participants and necessitates a focus on product differentiation strategies as well as 'complete solution offerings'. Overall, market success will rely heavily on superior customer service and product distribution.

The report reveals that this market earned revenues of EUR1.56billion ($2.26billion) in 2006 and estimates this to reach EUR2.12billion ($3.07billion) in 2013.

Prashanth V, a senior research analyst at Frost & Sullivan, comments: “The need for improved production efficiency in verticals such as process industries, automotive manufacturing and industrial applications is expected to be the key driver for the proximity and displacement sensors market. Sensor solutions are crucial for achieving production efficiency and eliminating unnecessary costs in the manufacturing process. This is imperative in a global economy where customers are insisting on zero-defect products at very low prices.”

Moreover, concerns about factors such as pollution control and worker safety have led to government regulations aimed at improvements. These regulations have a positive impact on the proximity and displacement sensors market, since an efficient sensor-based system can significantly improve energy efficiency and reduce process variation. This driver will have a particularly strong impact in the European Union and North America.

However, the presence of numerous manufacturers and a lack of technology differentiation forces participants to compete as commodity manufacturers. This competition, in conjunction with the entry of cheaper sensors from countries such as China, especially in the low-cost sensor areas, has had a negative impact on the profit margins as well as the overall market revenues.

Prashanth states: “Pricing pressure will intensify toward the latter stages of the forecast period as low-cost manufacturers improve techniques and introduce better products. Economic weakness in Western Europe and the lack of technology innovation in certain segments represent the other major challenges seen in the market.”

Going forward, companies need to provide customers with 'complete solutions' and invest in developing engineering expertise. Additionally, product differentiation will help improve profit margins.

World Proximity and Displacement Sensors Market