The European market for gearboxes and gear-motors is highly competitive with low margins, and manufacturers of these products can no longer rely only on low production costs to gain a competitive edge, warns a new report from the market analyst, Frost & Sullivan.

Despite these concerns and the maturity of gear technologies, F&S reports that the market is still growing at a “moderate” rate, and predicts that revenues will expand from around €2.93bn in 2010 to more than €3.72bn by 2017.

According to the report, gearboxes and gear-motors are also under threat from alternative technologies such as variable speed drives (VSDs). The widespread availability and falling prices of VSDs, combined with a growing awareness of their advantages, are motivating some gear users to change to these technologies.
 
“This has been exacerbated by the fact that most potential applications have already been identified and satisfactorily addressed by gearbox and geared motor manufacturers,” says Frost & Sullivan research analyst, Ramasubramanian Natarajan. “Consequently, they have found it difficult to penetrate newer applications and increase their market share.”

Although gear products manufacturers suffered during the recession in 2009, Natarajan suggests that “economic stability, with its attendant increase in consumer confidence and spending, will push the gearbox and gear-motors market back on track. Rising investments in major end-user segments such as wind power, food and beverage, and materials-handling, will provide a fillip to geared components in the short- and medium-term.”

In particular, he believes that heightened environmental concerns and escalating energy costs will drive demand for gearboxes for windpower applications. At the same time, simple designs are making geared products attractive for other applications and the technology is perceived to be the most cost-effective for industrial mechanical power transmission.
 
“Modular design and flexibility in usage has boosted the cost-effectiveness of geared products,” Natarajan adds. “A substantial customer base for gearbox and gear-motors is expected to impact the growth statistics of the market.”
 
He suggests that European geared product manufacturers can compete with low-cost imports by outsourcing the production of non-critical components to regions with low labour and raw materials costs. “The final component can then be inspected and assembled by more skilled labour in Europe.”