‌2025: Who’s "Sharpening Their Knives" Behind Air Compressor Distributors?

In 2023, China’s industrial air compressor market reached USD 6.8 billion, with a compound annual growth rate (CAGR) of approximately 9.6% from 2018 to 2023. It is projected to grow to USD 10.8 billion by 2030, with a CAGR of 6.8% between 2023 and 2030. However, beneath this seemingly optimistic outlook, air compressor distributors in 2025 face mounting crises, as if lethal threats lurk in the shadows.

‌Manufacturer Pressure: Profit Margins Severely Squeezed‌

The air compressor industry is becoming increasingly competitive, with market saturation and severe product homogenization triggering a price war. Over the past three years, the average selling price of air compressors has declined by 5–8% annually. Amid this environment, tensions between manufacturers and distributors are escalating. Some manufacturers impose unrealistically high annual sales targets on distributors, disregarding market realities. While China’s air compressor market has grown at a CAGR of 4.3% over the past five years, certain manufacturers demand distributors achieve annual sales growth rates of 50% or higher. To meet these targets, distributors are forced to stockpile inventory, leading to severe overstocking. In the first half of 2024, some distributors saw a 35% year-on-year increase in inventory, with turnover days extending from 60 to 90 days, tying up significant capital. If market demand underperforms, this excess inventory becomes a crippling burden, severely impacting cash flow.

Manufacturers are also tightening the screws through pricing and rebate policies. Some unilaterally raise wholesale prices while delaying or withholding rebate payments, exacerbating distributors’ financial strain. Surveys reveal that over 70% of affected distributors face severe inventory buildup and cash flow issues, with nearly 50% experiencing profit declines exceeding 30% within a year.