Still experiencing revenues last year that were down more than 20% from pre-recession levels, the global market for medium-voltage (MV) motors is finally showing signs of recovery, which is estimated at just over $4 billion this year and is expected to reach $5.7 billion by 2015, according to new analysis from IMS Research.
As seems to be the case with several other markets, growth during this period will be led by developing economies such as China, India and Brazil, which typically have low-cost labor forces and indigenous sourcing of raw materials. These economies are also showing rapid growth in industry sectors that use MV motors, including metals, mining, and oil and gas. These regions are expected to generate double-digit revenue growth during the forecast period, IMS predicts.
In contrast, the established economies of North America and Western Europe, where MV motor revenues contracted by an estimated 30% in 2010, face a longer recovery period, with only modest single-digit growth forecast to 2015. The market’s recovery to pre-downturn levels is not expected until 2013 at the earliest.
“Developing countries with highly favorable conditions were able to continue growing their domestic MV motor markets during the global recession, while developed economies struggled mightily, said Mark Meza, senior research analyst. “In addition, MV motor suppliers in these regions have been concurrently gaining share in Western countries due to growing exports as a result of a notable increase in quality of their products.”
In the past two years, Asian motor manufacturers in particular have been able to capitalize on increased price sensitivity in heavy industries that use MV motors. This has been evidenced by a significant drop in average selling prices (ASPs) in the OEM space, which has experienced an influx of lower-priced MV motors that well-established manufacturers have not been able to match.
“The entrenched suppliers have certainly taken notice of an estimated $480 million worth of MV motors sold by suppliers from developing nations in 2010,” Meza said. “This has been especially true in markets where off-the-shelf, non-specialized MV motors can be sold in large volumes at low cost.”
IMS expects that once the global economy begins to regain momentum, the leading European and American manufacturers will again be able to leverage the value propositions of durability, reliability and support and service after the sale that have traditionally driven sales of their MV motors.