Economic Turnaround Boosts Renewed Advance In European Electric Drives Market According to a New Study by Frost & Sullivan | Automation.com

Economic Turnaround Boosts Renewed Advance In European Electric Drives Market According to a New Study by Frost & Sullivan

August 082003
London, 07th August 2003...A new study by Frost & Sullivan, the international market consultancy, provides evidence of a rebound from the recent poor developments in the European electric drives market.

Following lacklustre results over the last couple of years, the general prospect of improving economic figures in 2004 and growing end-user confidence will boost demand in the European market for electric drives, currently worth US$ 1.50 billion.

Robust growth in the market for AC solutions, the mainstay of the European electric drives industry, coupled with more competitive price levels and an upswing in the all-important German market, fuel expectations for a recovery in the European market for electric drives. The drives sector is beginning to draw strength from greater demand for the latest drives series being launched by the leading manufacturers. Siemens, Danfoss, Control Techniques, Bosch-Rexroth, amongst other players, have all introduced updated or new product series. Rising customer demands for improved and more sophisticated drive technology will boost the performance of the overall market, with revenues projected to be close to the US$ 2.0 billion mark in 2009.
Mik Sabiers, Research Manager at Frost & Sullivan, comments: “In the context of next generation drives, it should be highlighted that one of the factors supporting the development of the drives market is the number of local manufacturers. Europe has a greater total of indigenous manufacturers in contrast to other regions. These manufacturers have not only been advancing the technology, but have also been focusing on raising customer awareness and acceptance, a major impetus to growth.”

The competitive environment is expected to remain fierce, with manufacturers vying for a larger slice of the electric drives market. “It will be interesting to examine developments in the middle market tier, characterised by numerous suppliers looking to enhance their presence internationally. New entrants may also focus on the market as growth levels rise, with the result of manufacturers needing to ensure that they focus on driving technological advancements, improving service and support and maintaining competitive price levels,” Mr Sabiers continues.

While many sectors in the motion controls arena have reached a greater degree of maturity, the drives field continues to benefit from wider acceptance of the technology, increasing demand in multiple application areas and continuing technology developments.

Growth in the AC sector will be stimulated by new product launches, general developments in the technology and greater confidence from the key customer sectors. These factors are set to lead to a greater recovery in 2004 and will help lift European unit shipments of AC drives to 1.7 million in 2009, equating to revenues worth $1.74 billion.

DC technology is seeing a general decline in overall demand, and the impact of the economic slowdown has extended the troubling downward spiral. As the industry climate improves, the DC market is not expected to witness any real recovery with demand continuing to fall over the remainder of the forecast period.

Despite its dominant position in terms of total market share, accounting for 36.5 percent of total revenues, Germany displays the poorest regional performance, depressed by the badly-hit confidence across the customer base.

Ranking in second position is France, closely followed by the United Kingdom, with Italy in third place. Growth in all of these regions is forecast to be below the market average as the customer base and the penetration of AC drive technology remain well established.

The strongest growing regional market is projected to be seen in Iberia, benefiting from good demand and interest in key sectors such as HVAC over the forecast period. Scandinavia is also believed to increase in relative importance, gaining from a focus by locally based manufacturers on building user interest and demand for drive technology.

The European market is served by a varied range of competitors, stretching from leading industry giants such as ABB and Siemens to small specialist suppliers serving niche applications. The good overall level of growth potential has attracted a wide range of international suppliers, but European manufacturers have built a strong overall position with many of the leading innovators in the industry manufacturing in Europe.

The market is divided into three main competitive tiers, Mr Sabiers concludes. “The top tier consists of ABB and Siemens which have focused on meeting demands across multiple product, regional and application markets as they look to provide complete solutions for the customer base. The overall result is that these two manufacturers are the only ones to have a market share in double figures.”

Price: EUR 5,500
Report Code: 6640


Background
Frost & Sullivan is an international marketing consulting company that monitors a comprehensive spectrum of high-tech markets for trends, market measurements and strategies. This ongoing research is utilised to complement a series of research publications to support industry participants with customised consulting needs. Interviews and free executive summaries are available to the press.
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