Sales of AC variable speed drives will grow by an average of almost 5% a year in the period to 2004, predicts a new report on the European market for motors and drives. The study*, by Reed Electronics Research, values the combined market at $7bn last year and forecasts that it will rise by an annual average of 3.3% to exceed $9bn by 2004.

Fractional horsepower motors represent more than half of the market, with DC and universal FHP motors accounting for a third of all sales, and AC FHP motors representing a further 20%. Reed predicts that sales of small DC machines will grow by 3.8% over the study period, driven largely by the automotive market, but adds that prices will fall because of intense competition and pressure from the car-makers. Sales of AC FHP motors will grow by an annual average of 2.5% between 1999 and 2004, the study suggests.

The market for larger AC machines will grow at an annual rate of at least 3%, it says, and will benefit from improving economic conditions and from the growing emphasis on high-efficiency machines. DC machines, by contrast, suffered "a dramatic collapse" in sales last year, although there signs of a recovery now, with sales expected to peak next year before declining again gradually.

The strong predicted growth in the AC drives market is attributed mainly to sales of smaller systems entering new applications. The downward pressure on prices in this sector will continue.

Sales of DC drives, like DC motors, will hit a peak next year before entering a gradual decline as users migrate to AC technology, the report suggests.

Combined motor-inverters are the industry`s fastest-growing sector, although starting from a low base. Across Europe, their sales amounted to less than $50m last year, but Reed predicts that the market for these hybrid products will grow by an annual average of more than 25%.

Germany continues to dominate the European market for drives and motors, accounting for 41% of all sales in 1999. Italy`s large domestic appliance sector puts it in second place, followed by France and the UK. Together, these three countries represent 37.5% of the European market, according to Reed`s figures. * Profile of the European Motors and Drives Industry - Market Prospects to 2004. Price £845. Details on (44) 020 8652 3120.