Steady growth of a fragmented market

The ASSA ABLOY Group originated in the Nordic region in 1994, as the spinoff of Assa AB from the Swedish security company Securitas and the acquisition shortly thereafter of the Finnish lock company Abloy. Since then the Group has expanded by a combination of acquisitions and organic growth.

Growing faster than GDP
Viewed over a business cycle, the industry is steadily growing 2-3 percent a year faster than general gdp growth. This continuing expansion is due to increasing wealth in the developing
world and to an increasing sense of vulnerability in the world.

The global lock market remains fragmented. In western Europe and North America, a number of companies are still family-owned, with strong and well-established relationships with their local distribution networks and leading positions in their own home markets. In other parts of the world established lock standards and strong brands are less common. However, in some markets a regional consolidation can be seen.

The major players
ASSA ABLOY is the global market leader, with annual sales approaching eur 3 billion. The second largest is Ingersoll Rand, followed by Kaba, Black & Decker, Stanley and Dorma, with more of a regional strength. Other players have grown too, some on the international market through export sales or by establishing operations away from home.

The size of the global market
There is no established method to estimate the size of the global lock market accurately. Few countries produce welldefined statistics for the industry. The information also depends on exactly what product areas are included. At ASSA ABLOY estimates are based on the Group’s own product range. Door automatics are therefore included as well as doors for the professional end-user market in the USA.

Another uncertainty is at what level in the distribution chain the sales should be measured. Today most lock sales are made through distributors, but most of the quoted figures represent lock manufacturers’ sales. This means the total end-user market for products, i.e. excluding installation costs, will be 50-100 percent higher. Based on manufacturers’ sales, our best estimate for the world lock market today is around eur 25 billion. This gives the ASSA ABLOY Group a world market share of 10-12 percent.

Advanced technologies grow
In the past year, the sales of advanced security technologies and notably electronic lock cylinders have started to take off. ASSA ABLOY alone delivered more electronic cylinders in Scandinavia and Germany in 2002 than during the whole fifteen years since the product category was introduced.

Other technologies continue to spur market development. HID’s new iCLASS card, which can incorporate biometrics for additional identification security, has aroused much interest.

Market imbalances
In the industrialized world there are still major imbalances between markets. The USA spends at least twice as much as Europe on emergency exit devices. Conversely, Scandinavia, Finland, Germany and Switzerland spend 3–4 times as much as either southern Europe or the USA on high-security locks.

Similarly automatic doors have 3–4 times the penetration in Switzerland, Sweden and the Netherlands as elsewhere. Today, there are no reasons for these differences to remain. Instead, there is a challenging business opportunity to level these imbalances through education of the market.

Security initiatives after 11 September 2001
Following 11 September 2001, longrunning us initiatives to develop new security Standards and to reconsider security arrangements were significantly accelerated, especially at government institutions like the Department of Defense. Interest in high-security locks, biometry and smart cards has increased considerably and has triggered activity in the many ASSA ABLOY companies well-established in these fields.

In many European countries the new European Standards have now come into force and have started to influence national requirements and thereby also the products. This has had a major influence on the use and sales of exit devices such as panic bars, which traditionally have had a much larger penetration in the USA than in Europe.