Frost: Stress on Energy Conservation Boosts Chinese Electric Drives Market
December 20, 2006 // Published as a news service by IHS
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With the Chinese government's emphasis on the application of green technologies, manufacturing industries are realizing the need for energy-efficient electric drives.
According to Frost & Sullivan, this will significantly enhance the growth of the electric drives market in China.
New analysis from Frost and Sullivan of the Chinese electric drives market found accrued revenues of $1,164.2M in 2005, with estimates to reach $2,458.1M in 2012.
Several top participants are working to increase consumer awareness on the energy efficiency of electric drives.
Analysts said domestic manufacturers and companies can benefit substantially by adopting promotional strategies, such as campaigns and trade fairs, to present the benefits of their products.
Analysts said the rapid industrialization and automation of manufacturing industries, such as power, chemicals, textiles and food industries, are also strengthening the demand for electric drives.
Foundation industries, including petrochemicals, fine chemicals and pharmaceuticals, are the fastest-growing sectors and are likely to contribute substantially toward the growth of the electric drives market.
The Chinese government invested heavily in establishing these industries, analysts said. As the country is beginning to compete globally, the focus of these investments is likely to shift to process improvement and efficiency.
"As domestic manufacturers are seeking to become more efficient in their use of labor and power, electric drives enable them to manage quality and cost," said Frost & Sullivan research analyst Kasandra Luo. "The application of electric drives can receive a boost as modern management and manufacturing techniques are introduced."
Electric drives are evolving in functionality and design, with an increase in foreign and domestic investments for its development. Analysts said alternating current (AC) electric drives are becoming more sophisticated, offering enhanced functionality, control and precision, leading to the continuous growth of this segment.
Being less expensive than direct current (DC) standard electric drives, AC drives enjoy more popularity in the market. Analysts said consumers are also reluctant to buy DC drives in case they are eventually forced to switch to AC technologies. This is resulting in greater sales of AC products.
The increasing number of applications requiring electric drives presents numerous growth opportunities to manufacturers. Analysts said there is stiff competition, especially in the low-tech end of the electric drives market.
Analysts said improved product sophistication is enabling companies to enter high-power market segments. Participants can stay competitive in the market by enhancing the quality of their products, services and distribution channels.
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"Domestic producers can build their sales network with more agents, distributors and original equipment manufacturers (OEMs) to keep abreast leading global competitors," said Luo. "This can help expand their business not only by retail sales, but also industry sales."
Source: Frost & Sullivan.