With corporate profit and access to credit forecast to grow, downstream buyers are likely to invest in AGV systems, allowing for suppliers to raise their prices to match demand.
Los Angeles, CA (PRWEB) October 29, 2013
Automatic guided vehicles (AGVs) have a buyer power score of 2.9 out of 5. Scores closer to 5 represent better negotiating conditions for buyers. In the three years to 2013, suppliers in this market have benefited from the recovering levels of corporate profit and the greater access to credit of businesses that faced financial pressures during the recession. “The desire to maintain profitability and low labor costs fueled an upward trend in prices for AGVs,” says IBISWorld procurement analyst Andrew Rebhan. “Prices are forecast to continue their growth pattern over the next three years as AGV systems continue to become more advanced.” Buyer price risk will be heightened due to the generally high level of volatility associated with the input cost drivers and external drivers of price for AGVs. The cost of certain raw materials, such as steel, can fluctuate greatly and influence price levels that suppliers charge.
The current automatic guided vehicles market is heavily concentrated, with JBT Corporation, Jervis B. Webb Company, Dematic Corporation and Kollmorgen Corporation holding the greatest market share. “High market share concentration hurts buyer negotiation power because there are fewer vendor bids to use as leverage,” adds Rebhan. Given the customized nature of AGV systems and the low number of suppliers to choose from, buyers are not as likely to talk down prices or impact the high profit margins that suppliers obtain per AGV sale. The supply chain risk for AGVs is not substantial, but buyers will face some risk in terms of how suppliers are able to acquire the necessary inputs to manufacture AGVs. Imports are growing as a percentage of the market, and suppliers are starting to face a growing level of competition from international players. Buyers may be able to benefit from this competition as the market is likely to become more fragmented over time.
While negotiation power is low for buyers, AGVs do offer their share of benefits. The total cost of ownership for buyers is low because the initial outlay costs of AGVs are often recouped after a few years due to reduced labor costs and greater operational efficiencies. Switching costs can be high for buyers, but will likely decrease in the coming years, given the development of flexible AGV systems and newer forms of navigation that require less modifications to a facility's infrastructure. For more information, visit IBISWorld’s Automatic Guided Vehicles procurement research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of automatic guided vehicles. These types of vehicles consist of mobile load carriers that can take the form of forklifts, towers, trays and carts used for material handling and tracking. These vehicles are computer-controlled and programmed to operate without a driver, while navigating through commercial facilities by following set markers or other guidance systems. Suppliers of automatic guided vehicles are the vehicle manufacturers.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Vendor Financial Benchmarks
Buying Lead Time
Key RFP Elements
Buyer Power Factors
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