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For years, rumors have circulated about "exorbitant profits" in the air compressor industry, but in reality, this era ended long ago. Factories and distributors now grapple with declining profit margins year after year. This article delves into the industry’s actual profitability and its evolving dynamics.
Early High-Profit Drivers
1. Technological Monopoly & Limited Competition
In the last century, screw air compressor technology was nascent, with only a handful of international giants like Atlas Copco and Ingersoll Rand mastering core patents. These companies leveraged their R&D dominance to monopolize markets. In China, the industry was still in its infancy, with local manufacturers lagging technologically and relying on imported products. For example, a small imported screw air compressor system could sell for 3–5 times its production cost after taxes and markups, creating massive profit margins.
2. High Demand vs. Low Supply
Rapid industrialization drove explosive demand for air compressors, but production capacity lagged. In China, annual demand surged by 20–30%, while domestic manufacturers struggled to keep up. Supply shortages kept prices inflated, with industry-wide profit margins averaging 40–60%.
