Low-voltage drive market is experiencing a steady recovery with expected 2020-25 CAGR of 4.8%

Low-voltage drive market is experiencing a steady recovery with expected 2020-25 CAGR of 4.8%

The performance of the LV drive market is closely related to the overall global manufacturing output. In “normal” economic crises, the manufacturing industry tends to contract sharply, followed by a strong rebound before leveling off. But the COVID-19 crisis unfolded very differently. Slow vaccine uptake, labor shortages, and supply chain disruptions all combine to lead to a much slower recovery in manufacturing, and therefore in the BT drive industry, than what one would have expected.

The graph above illustrates how relatively well APAC weathered the COVID storm in 2020, while the Americas and EMEA saw a significant drop in revenues. It also describes the expected steady, if not slow, recovery. Obviously, it’s not a V-shaped bounce.

2020: APAC weather the COVID storm, thanks to the Chinese economic juggernaut

Global sales of low voltage motor drives fell about 8.9% in 2020. Interestingly, however, the impact of the pandemic on the market has been very uneven, affecting some regions far more than others. . The EMEA was the hardest hit, with a -17.8% drop in sales of LV drives and the Americas experienced a -11.9% contraction. But APAC actually saw modest 1.1% sales growth driven by the Chinese economy as the country succeeded, against all odds, in sustaining economic growth.

As a result, manufacturers of on-board drives in the APAC market, such as ABB, FUJI and Inovance, have gained global market shares in the order of 1%, 0.5% and 0.3% respectively at the expense of lesser manufacturers. exposed to the region. It should be noted, however, that not all hard drive vendors with a strong presence in APAC have performed well. Siemens, for example, the second largest record supplier in this region, experienced a 0.5% contraction in sales, but that was because its largest market for records is Germany, which experienced a severe collapse of manufacturing during the pandemic, particularly in the automotive industry. sector.

2021: storage drives sales boom in the first half of the year, the market flattens out in the second half

Despite the sharp contraction in sales in some major regions in 2020, the LV motor market is expected to see global revenue surpass pre-pandemic levels by 2022. Meanwhile, over the period 2020 to 2025, we forecast that the global market will grow with a CAGR of 4.8%. The first half of 2021 saw a significant increase in order volumes – up to 20-30% in some cases. However, most of the orders were intended for delivery in the second half of the year, indicating that there has been significant stockpiling. As a result, the high pace of orders in the first half of the year will stabilize. We forecast a 7.7% overall increase in global sales of LV drives in 2021, which is quite closely aligned with our forecast for global manufacturing as a whole, although it is important to note that there are significant customers. in the drive market that is beyond the scope of our broader manufacturing research, such as in the mining industry.

Long-term trend of annual price erosion is on hold

Historically, there has been a steady decline in prices in the drive market, in the order of 1 to 2% per year. This is something the market has become accustomed to and it is caused by the fierce competition among sellers in the sector and the fact that customers in China, one of the largest markets, have developed a taste for lesser records. functional and less expensive. The relentless downward pressure on prices in China has had a ripple effect on the world market. During the period 2019-2020, prices have remained stable with the average selling price of a player reaching $ 543.60, but in 2021, prices have increased with global prices increasing by almost 2 , 5%, bringing the average selling price to $ 556.60. .

This price hike was caused by the semiconductor shortage, and it is expected to stay around that level, as we do not expect to see the semiconductor market return to normal until the second half of 2022, or even in the second half of 2022. 2023. There are also two other awards. drivers – the shortage of other raw materials and higher shipping costs. As a result, the gradual price erosion to which the market has become accustomed will not return until 2024 at the earliest.

About the Author


Blake is an expert in automation systems, industrial digitization and off-road electrification. Since joining Interact Analysis in 2017, he has written detailed reports on the Low Voltage AC Motor Drives, Predictive Maintenance, and Mobile Hydraulics markets.


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