24 Jul 2024


In-fighting dogs the UK`s large motor suppliers

In-fighting dogs the UK`s large motor suppliers

Despite the improvement in the economy, the UK`s larger electric motors suppliers are failing to benefit, according to a new market analysis. Plimsoll Publishing`s survey* of the top 63 companies in the UK electric motors industry reveals that, contrary to popular belief, smaller companies are not being forced out of the market by their larger counterparts. In fact, the larger companies are fighting each other, leaving the smaller companies to prosper.

“There is clear evidence of stagnation at the top of the market”, says Plimsoll`s senior analyst, David Pattison. He points out that 29 of the 63 companies failed to increase their sales above inflation in 2003/2004. “With many also experiencing rising costs, their future direction now looks uncertain.

“Size does not necessarily lead to success in the electric motors industry,” Pattison adds. According to Plimsoll`s figures, 15 of the leading companies did not make a profit last year and are less profitable than the smaller players. “Only four of the top 100 companies have shown profit growth in three consecutive years,” Pattison reports. “Nine companies have not made any profit over the same period!”

He predicts a further round of acquisitions and mergers. “The top end of the electric motors industry is heavily congested, with no room for any of the major companies to breathe,” says Pattison. “In other markets where this has been the case – supermarkets, for example – there has been a series of major acquisitions to clear the air. Smaller companies are at little risk of takeover by any of the majors – they simply don`t offer any strategic opportunity.

“We might see at least two of the UK`s top 63 electric motors companies having to merge or be taken over,” Pattison predicts. “In fact it`s so likely, we have put 22 on the danger list.”

Plimsoll`s analysis also reveals that 28% of the directors in the companies surveyed have been in the job less than three years and that 33% are aged over 60, and earn an average of £39,000 per annum.

* The 264-page analysis costs £500. Details on 01642 626400 or from www.majorcompanies.co.uk. Drives & Controls readers can ask for a 5% discount.