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Demand for Electric Drives Increasingly Fragmented by End-user Segment21 December 2005
Valued at US$305.0 million in 2004, the French electric drives market is likely to reach US$347.4 million by 2011 at a compound annual growth rate (CAGR) of 1.8 per cent. In this highly competitive market, growth is likely to be increasingly dependent on manufacturers' ability to identify specific sectors in which they can compete as well as develop and target suitable products.
"Electric drives manufacturers need to closely screen all their potential markets in order to rule out sectors that are less profitable," says Frost & Sullivan (http://industrialautomation.frost.com) Programme Manager Mylan Nguyen. "This will enable them to focus on areas that offer them the opportunity to establish strong, defendable and long-term positions."
Despite the relative maturity of this market in France, competition is increasing from many quarters, especially from countries such as China and South Korea. Manufacturers in these countries have a distinct advantage in their ability to offer economical but high-quality products and are entering the French market in a bid to establish their positions. The low-cost options offered by these new entrants pose a strong threat to existing market participants.
Western manufacturers have tended to dismiss developing economies as being incapable of making products that can match their own in terms of quality. However, many Chinese companies are disproving this notion and are adhering to extremely high standards when building their plants and developing their processes and products.
Moreover, low production and labour costs allow these competitors to offer their products at far more attractive prices than those of their European competitors. In such a situation, Western manufacturers will find competing on cost extremely difficult.
"Market niching could offer an effective solution to manufacturers and provide a solid defence against increasing competition, particularly from new entrants, as well as rising globalisation," notes Nguyen. "By developing application-specific technologies or focusing on particular end-user sectors, manufacturers could adapt their offerings to selected markets."
End-user interviews conducted by Frost & Sullivan revealed that companies' reputations tend to be sector-specific and that end users in different sectors view these companies differently. This suggests that entering a new and hitherto unexplored sector or trying to establish cross-industry positions might prove to be an expensive and less effective exercise. Therefore, manufacturers would do well to focus their efforts on specific end-user sectors.
These interviews further revealed that end users increasingly perceive electric drives as 'commoditised' and are unclear about the technical differentiation between individual products. Changing these perceptions and communicating product differentiation is bound to be a considerable challenge for market participants.
Across all sectors, quality and reliability, price, delivery time and ease-of-use of electric drives emerged as the most important purchasing criteria. Most end users usually kept some stock of certain electric drives as a back-up in order to replace them immediately and ensure the continuity of the production process.
"Every end-user sector expected quality electric drives to work without any failure for a long time," observes Nguyen. "Manufacturers should focus on offering drives with the required quality and power rating for specific sectors and applications as well as on shortening delivery times as it is critical to receive new drives immediately in the case of continuous processes."
New opportunities in the maturing French electric drives market are likely to spring from ongoing innovations and product development, which are already having a positive impact on the market.
These technological innovations are the result of increasingly complex manufacturing systems that require a new generation of electric drives enabling easy programming, remote operation and some amount of drive independence.
In response to these needs, manufacturers have started offering more precise, small-sized and complex solutions, particularly in the servo drives market. The trend towards more 'intelligent' and customised electric drives is likely to support future market growth.
If you are interested in a virtual brochure, which provides manufacturers, end users and other industry participants an overview of the latest analysis of the French Electric Drives End-user Analysis, then send an e-mail to Magdalena Oberland, Corporate Communications, at magdalena.oberland@frost.com with the following information: your full name, company name, title, telephone number, fax number, e-mail address and source of information. Upon receipt of the above information, an overview will be sent to you through e-mail.
Title: French Electric Drives End-user Analysis
Code: B782-17
Background
Frost & Sullivan, a global growth consulting company, has been partnering with clients to support the development of innovative strategies for more than 40 years. The company's industry expertise integrates growth consulting, growth partnership services and corporate management training to identify and develop opportunities. Frost & Sullivan serves an extensive clientele that includes Global 1000 companies, emerging companies, and the investment community, by providing comprehensive industry coverage that reflects a unique global perspective and combines ongoing analysis of markets, technologies, econometrics, and demographics.
List of Keywords in this Press Release: French, electric drives, manufacturers, China, South Korea, niching, globalisation, quality, reliability, price, delivery time, ease-of-use, servo drives, customised drives, intelligent drives
List of Key Industry Participants: ABB, ABB Automation SNC, Alstom Power Conversion, ATB Selni, Baumueller, Bonfiglioli Transmissions SA, Bosch Rexroth Group, Bosch Rexroth SA Commandes et Entrainements Electriques (Chelles), Crouzet Automatismes SA, Danaher Motion GmbH, Danfoss, Danfoss SARL, Elau, ESR Pollmeier GmbH, Flender, GE Fanuc Automation, GE Fanuc Automation France, Harmonic Drive, Helmke SARL, Infranor SA, KEB, Lenze, Lenze SA, Leroy-Somer, Lust Antriebstechnik GmbH, Lust DriveTronics GmbH, Mitsubishi, Nord Reducteurs SARL, Omron, Rockwell, Rockwell Automation - Allan Bradley, Schneider Electric, Schneider Electric SA, SEW, SEW Usocome - Eurodrive, Siemens, Siemens VDO Trading France, SSD Drives Parvex SA, Vacon, VACON GmbH, Yaskawa
Media Contacts:
Europe:
Magdalena Oberland
Corporate Communications
P: +44-207-915-7876
E: magdalena.oberland@frost.com
Americas:
Tori Foster
Corporate Communications
P: +1-210-477-8448
E: tori.foster@frost.com
Asia Pacific
Donna Jeremiah
Corporate Communications
P: +603-6304-5832
E: djeremiah@frost.com
India:
Surbhi Dedhia
Corporate Communications
P: +91-22-2832-4705 Ext: 131
E: sdedhia@frost.com
Australia:
Sharmin Jassal
Corporate Communications
P: +61-2-8247-8900
E: sjassal@frost.com
Source: prnewswire
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