Despite the unchanged local production policy from May 2021, which requires 85% of systems to include locally made products, deals now take longer to finalize, with some purchases cancelled or delayed. Additionally, the Chinese government’s volume-based procurement strategy, initially applied to drugs and now to medical devices, is expected to drastically lower average selling prices. However, increased activity in higher-end systems by some Chinese vendors may partially mitigate this decline.

Japan: Yen depreciation hits the market again
Economic growth in Japan was projected to rise in 2023, supported by monetary and fiscal policies. However, the Japanese yen depreciated in 2023, causing the Japanese ultrasound market to decline in USD terms. Corporate profits will benefit from the weaker yen and previous project delays, boosting business investment.
Projected growth from 2025 to 2028 will be driven by Japan’s national health transformation plan starting in 2024, focusing on diseases like cancer, stroke, myocardial infarction, diabetes, and mental illness to address the growing aging population. The first phase, the 8th Medical Plan, will run from 2024 to 2029.

Southeast Asia: Investment will drive growth
Localisation remains a dominating factor in Asian Markets. The Indian government continued its strong push for local manufacturing, offering tax incentives and stipulating tenders that include around 50% locally manufactured components. While inflation caused significant price increases across most system pricing levels, aggressive strategies by vendors kept entry-level prices low. Local manufacturing helped mitigate overall price hikes in the country.

In Indonesia, a policy mandating that at least 25% of primary care systems be locally made facilitated market growth, largely due to government investment in cardiac disease and increased local manufacturing. The policy, expected to extend to other clinical segments soon, primarily impacts lower-end device manufacturers.

Large deals and government funding within the region have driven strong growth within the Asian market. Thailand saw a multiyear deal land in 2023 resulting in significant growth for the country. The Korean New Deal facilitates the implementation of smart healthcare infrastructure. Around 0.2 trillion Korean Won (USD $149.5 billion) will be invested between 2020 and 2025.

The Signify view
Though growth in 2024 is anticipated to remain low, due to the continuation of regional issues from 2023, more stable growth is projected for the next five years. Investment in healthcare still remains a priority for governments; frameworks and transformation plans starting this year will benefit the latter half of the forecast period. Vendor innovation continues to drive the market as they adapt to new challenges and varying demands from the consumers. Price sensitivity remains the core theme globally affecting purchasing habits and vendor preferences, driving vendors to diversify their portfolios with new releases in the low-end segments. International vendors are adding premium features to their performance solutions to retain a competitive edge in this increasingly competitive market. Whilst the market is currently mired in caution and uncertainty, a brighter horizon lies just ahead.

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