Major European and American and European manufacturers of medium-voltage (MV) motors are losing sales to low-cost machines produced in other parts of the world, according to a new report.

In the past two years, Asian motor manufacturers in particular have been able to capitalise on increased price sensitivity in heavy industries that use MV motors, says IMS Research in its 2011 Medium Voltage Motors study. There has been a significant drop in average selling prices, and an influx of lower-priced MV motors that well-established manufacturers have not been able to match.

“The entrenched suppliers have certainly taken notice of an estimated $480m-worth of MV motors sold by suppliers from developing nations in 2010,” says senior IMS research analyst, Mark Meza. “This has been especially true in markets where off-the-shelf, non-specialised MV motors can be sold in large volumes at low cost.”

But IMS predicts that once the global economy begins to regain momentum, the leading European and American manufacturers will again be able to benefit from the durability, reliability and after-sales support and service that have traditionally driven sales of their MV motors.

During 2010, global revenues from MV motors shrank by more than 20%, compared to pre-recession levels. But, according to IMS, the developing economies such as China, India, and Brazil are leading a recovery that will take the market to an estimated $4.1bn this year, and to more than $5.7bn by 2015.

It predicts that sales of MV motors in emerging economies will experience double-digit growth in the period to 2015, out-performing the global market. These economies usually have low-cost labour forces, indigenous sources of raw materials, and rapidly growing industrial sectors such as metals, mining, and oil and gas, that need MV motors.

By contrast, the established economies of North America and Western Europe, where MV motor revenues contracted by an estimated 30% in 2010, face a longer recovery, with only modest single-digit growth forecast to 2015. IMS does not expect these markets to recover to pre-downturn levels before 2013 at the earliest.
 
“Developing countries with highly favourable conditions were able to continue growing their domestic MV motor markets during the global recession, while developed economies struggled mightily,” says Meza. “In addition, MV motor suppliers in these regions have been concurrently gaining share in Western countries due to growing exports as a result of a notable increase in quality of their products.”