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Global drives sales `will return to 2008 levels in 2011`

26 October, 2010

The global market for low-voltage AC and DC drives will return to double-digit growth in 2010, with revenues reaching $10.5bn and 16.4 million drives being shipped. In a new report, the market analyst IMS Research predicts that drives sales will return to 2008 levels during 2011.

Although the drives market did suffer as a result of the recession, it was not as severely affected as many other automation product markets. Total revenues in 2009 are estimated to have been $9.3bn – a 13% decline from 2008 levels, and just below 2007 levels. Around 13.9 million drives were shipped during 2009 – an 8% drop from 2008.

Unit sales declined significantly less (in percentage terms) than revenues last year because of a shift in demand from standard and premium drives to compact models. This shift resulted from customers’ increased price sensitivity due to the downturn, coupled with the increased capabilities of compact drives, allowing them to be used in a wider range of applications. The higher functionality and lower selling prices have encouraged many customers to replace standard and premium drives with compact ones, where possible.

“Companies across the board have reported increased compact drives sales both during the downturn and in the recovery, causing large disparities between revenue and unit growth,” explains IMS analyst, Sarah Sultan. “As the premium drives business begins to recover over the next several months, the disproportion between revenue and unit growth is expected to diminish.”

IMS predicts that the Asia-Pacific region will overtake EMEA (Europe, the Middle East and Africa) as the largest regional market for drive sales this year. The EMEA market is still struggling as a result of the financial crises in various European countries, as well as the persistent weakness of the Euro.

Nevertheless, IMS is forecasting a small positive growth in the EMEA region during 2010, with a return to double-digit growth during 2011. By contrast, it predicts that the Asia-Pacific region will to grow by more than 20% in 2010, after declining by only a few per cent during 2009.

The Americas region is also expected to experience a strong recovery in 2010, with a growth of more than 15% being forecast both in terms of revenues and of units shipped. Growth in a variety of sectors – particularly the commercial HVAC market – is driving demand for drives in this region.

Of the four main global regions, Japan suffered most significantly from the global recession, experiencing declines in both 2008 and 2009. IMS predicts that the Japanese drives market will recover gradually, and is forecasting a growth in revenues of about 6.4% for 2010.

The rate of recovery in the drives market will vary according to industry sector. Those sectors related to urbanisation and population growth – such as food, beverage and tobacco, and water and wastewater – will continue to have a high demand. But sectors tied to large projects and systems – such as shipbuilding, marine and metals – will recover more gradually. These sectors also tend to demand mainly premium drives, sales of which are expected to recover more slowly than the compact and standard drive models, because of their close ties to large projects.




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