Thursday, 16 May 2013
Engineering © Monty Rakusen / Cultura / Getty Images
Advanced engineering sector in the USA
The US advanced engineering industries are amongst the largest in the world and offer huge market opportunities. However, the sector is mature and sophisticated so UK companies should preferably be experienced exporters and clear on what differentiates then from the competition.
Advanced Engineering in the US is dominated by Automotive and Aerospace industries and underlying technology areas, such as materials.
The US aerospace industry is the largest in the world and covers all aspects including large civil aircraft, defence, general aviation, commercial space and rotorcraft. The industry has a large trade surplus and exports almost 50% of all production.
Whilst defence cuts and a business jet industry in recovery are squeezing aerospace growth, the civil aircraft industry is thriving. Boeing has back orders for a number of years and despite recent problems with the 787 Dreamliner the company is continuing to invest in new technologies. Large jet engine manufacturers, such as GE Aviation and Pratt & Whitney (UTC), also have healthy order books. Rolls-Royce has a significant presence in the United States, as does GKN. An increased focus on greener aviation is a key driver for the industry. Cost reduction is also key to new suppliers finding interest at the prime manufacturers.
The automotive industry is one of the largest in the world and home to 16 auto manufacturers including the US headquartered “Big Three” GM, Ford and Chrysler. US domestic sales reached 14.5m again last year and forecasts for 2013 are hovering around 15-16m vehicles. Pent up demand should fuel growth now that the average age of the US fleet is over 10 years old. The industry is thriving and investing in new technologies to meet fuel efficiency targets for the 21st century. The midsize segment, with increasingly fuel efficient engines, is a focus for the US automakers and accounted for 17.6% of the market in 2012.
The US also presents opportunities for companies looking to enter niche areas such as motorsport. A number of different race series’ create opportunities for UK expertise in the largest motorsport market globally i.e. NASCAR, Sports Cars, Drag Racing, Off-Road. Construction equipment also offers opportunities to UK companies with experience supplying the domestic industry and large OEMs such as Caterpillar, Bucyrus and John Deere.
Automotive – low carbon vehicle technologies.
Automotive – aftermarket opportunities due to the size of the US aging fleet, over 240m vehicles.
Aerospace – growing niche areas such as commercial space or UAVs offer opportunities.
Aerospace – integrated supply chain solutions to reduce cost can be attractive to the primes.
Getting into the market
The US industries are mature and world leading in many aspects. Companies wishing to enter the market need to consider their entry strategy carefully and clearly outline why their product or service is unique.
The large industry opportunities also bring large existing supply chains, so competition is fierce. Gaining approvals and understanding the technical requirements in advance is essential to being successful. There can also be a desire from US customers to have an in-market contact point for any supplier and UK companies will want to decide how best to service the client.
Market intelligence is critical when doing business overseas, and UKTI can provide bespoke market research and support during overseas visits though our chargeable Overseas Market Introduction Service (OMIS).
To commission research or for general advice about the market, get in touch with our specialists in country - or contact your local international trade team.
UKTI runs a range of events for exporters, including seminars in the UK, trade missions to overseas markets and support for attendance at overseas trade shows.
TAP funding available: Contact Motorsport Industry Association
4-8 March 2014
TAP funding available: Contact Construction Equipment Association
5-8 November 2013
NBAA Business Aviation Convention & Exhibition
22-24 October 2013
12-14 December 2013
4-8 March 2014
Aerospace and Defense Supplier Summit (Seattle)
11-13 March 2014