Economic turnaround to boost Europe’s electric drives market
London, U.K.—Following a couple of years of lackluster results, prospects of improving economics in 2004 and growing end-user confidence are expected to boost demand in Europe’s $1.5-billion electric drives market, according to a new study by Frost & Sullivan.
London, U.K.— Following a couple of years of lackluster results, prospects of improving economics in 2004 and growing end-user confidence are expected to boost demand in Europe’s $1.5-billion electric drives market, according to a new study by Frost & Sullivan . Robust growth in the ac drives market, which is the mainstay of the European electric drives industry, coupled with more competitive price levels and an upswing in the all-important German market, are fueling expectations for a recovery in the European market for electric drives.
Frost & Sullivan adds that 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 and other players, have all introduced updated or new product series. Increasing demand for improved and more sophisticated drive technology is projected to boost performance of the overall market, with revenues expected to be close to $2 billion by 2009.
Mik Sabiers, Frost & Sullivan’s research manager, adds that, “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.”
This competitive environment is expected to remain fierce as manufacturers fight for a larger slice of the electric drives market. “It will be interesting to examine developments in the middle market tier, which is characterized by many suppliers seeking to enhance their international presence. New entrants may also focus on this market as growth increases, so manufacturers will concentrate on technological advancements, improving service and support, and maintaining competitive price levels,” adds Sabiers.
While many sectors in the motion controls arena have matured, the drives field continues to benefit from wider acceptance of the technology. This situation increases demand in multiple application areas and continuing technology developments.
Likewise, growth in the ac sector will be stimulated by new product launches, general technology developments, and greater confidence from the key customer sectors. The study projects that these factors will likely lead to a greater recovery in 2004, and will help lift European unit shipments of ac drives to 1.7 million units in 2009, translating to revenues of about $1.74 billion.
Meanwhile, that study found that dc technology is seeing a general decline in overall demand, and the impact of the economic slowdown has extended the troubling downward spiral. While the overall industrial 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.
In addition, despite its dominant position in terms of total market share, accounting for 36.5% of total revenues, Germany displays the poorest regional performance, depressed by “badly hit” confidence across the customer base. France is in second place, and is closely followed by the U.K., while Italy is in third place. Growth in all of these regions is forecast to be below the market average, though the customer base and penetration of ac drive technology remains well established.
The strongest-growing regional market is projected on the Iberian Penninsula, which is benefiting from good demand and interest in key sectors, such as HVAC, during the forecast period. Scandinavia is also expected to increase in relative importance, gaining from a focus by locally based manufacturers on building user interest and demand for drive technology.
This European market is served by a variety 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.
Sabiers concludes that this market is divided into three main competitive tiers. “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.”
Control Engineering Daily News Desk
Jim Montague, news editor