The motor controls industry has long been one of the fastest growing automation markets. Even with a 2012 global value of nearly $24.3 billion, continued strong growth is forecast to continue.
Amid this ongoing growth, a key market shift occurred in 2012 as Asia supplanted Europe as the largest consumer of motor drives—primarily due to the size of the Chinese market, which accounted for 27 percent of global motor controls sales. The large user base in China is attracting the attention of motor control suppliers the world over and this is leading China to become a clear shaping agent in the global market for motor controls. Consider, for example, how distributor overcapacity led to a decline in the AC and servo drives markets in the second half of 2012. Nearly in tandem, Chinese demand for imports and foreign investment also declined significantly, negatively impacting major markets around the globe. However, the drives market recorded record levels in 2Q 2013 due to a combination of inventory correction and increased in demand from China. An increase in foreign demand is expected to follow this shift and provide growth opportunities for Europe and the U.S. in early 2014.
The markets in Africa, Greenland, and Latin America will also be impacted by China’s economic health, as China looks to invest in these regions to secure access to the markets and energy resources necessary for the country’s continued economic development.
As more China-based motor control suppliers differentiate their product offering through increases in functionality, the market overall is moving toward more sophisticated machine control. This increase in motor control product sophistication is causing a significant shift in the type of products purchased by domestic motor control users. In the past, most buyers in China focused almost exclusively on price and quick availability. To compete in this new, more sophisticated motor control environment, international suppliers are releasing lower cost versions of traditional products with the aim of taking share from domestic Chinese motor control suppliers. Not surprisingly, China-made products targeted at the Chinese market have also proven successful with some customers in Western Europe and Latin America.
One key aspect of the increased availability of more sophisticated motor control products is the inherhent energy savings. One of the biggest segments of motor controls market is&nbs penergy efficient variable speed drives, which accounted for 47 percent of all motor controls sales in 2012.The new Chinese government faces a significant challenge to develop an energy strategy that will meet the country’s very high demand. Achieving this goal will require multiple methods of energy production to sustain. Large pipeline projects are now underway to transport LNG to mainland China and develop oilfields in Russia and Kazakhstan, which will increase sales of large drives over the next five years; the increase in sales will also include 690V and medium voltage drives. Providing added demand for the drives markets is China's attempt to tap into newer, unconventional gas opportunities. China has just started using hydraulic fracturing (fracking) and plans are in place to use fracking in Changqing—China’s third largest oil field—to increase production by 2015.
Jenalea Howell is manager - Industrial Automation, IHS