25 Jul 2024


Danfoss Drives aims to be the world number one

One year after Danfoss’ takeover of the Finnish drives-maker Vacon, the leaders of the the merged business have been talking about their plans for the future. At the recent SPS IPC Drives show in Germany, Danfoss Drives’ president, Vesa Laisi, restated his aim of becoming the world’s biggest drives-maker. “We really want to challenge ABB as market-leader,” he said in Nuremberg.

According to Laisi, the combined Danfoss business has around 13% of the global market, putting it about 3% behind ABB and 2% ahead of Siemens. He reports that 2015 was another flat year for the drives market – which possibly even declined – but that Danfoss had managed to boost its share slightly. “We are growing a little,” he reported. “It’s not what we want, but the market is down.”

Danfoss is keeping its two-brand strategy, arguing that Danfoss VLT and Vacon serve different markets. “The customer bases do not overlap at all,” says Vaisi.

Danfoss is focusing on AC drives from 180W–1.4MW, integrated servodrives, soft-starters, and power modules. Vacon serves the markets for air- and liquid-cooled LV drives from 250W–5.3MW, active front-end drives, system drives, MV drives up to 11MW, and grid and wind-power converters.

Danfoss Drives has spent its first year integrating the two operations and drawing up a strategy for the future. Laisi believes that the combined business has some distinct differences from its rivals. For a start, it does not supply motors, giving users more freedom to mix-and-match motors and drives.

Danfoss also has its own in-house power electronics manufacturing capability, while most of its rivals have to rely on external suppliers. This potentially gives Danfoss earlier access to new technologies. Also, with increasing demand for power electronics from the automotive sector, having an internal source will help to ensure a reliable supply.

Part of Danfoss’ strategy to increase its market share is to add new technologies such as drives with on-board, software-based motion control, and medium-voltage drives, which Vacon has recently started to produce.

Heikki Hiltunen, Danfoss Drives’ senior vice-president for global sales, marketing and services, says that the company is adopting a “disruptive” approach to the MV market – the details of which he is not prepared to reveal yet.

According to Hiltunen, Danfoss is moving increasingly into “digitalising” the drives market, offering services such as remote monitoring and diagnostics. “In five to ten years, we will be more of a services business,” he predicts.

Another aspect of Danfoss strategy is to build leading positions in about ten vertical markets – with five of these earmarked as being key to the company’s future.