Rising Energy Costs Power LP AC Drives - Market to Grow 4.7% Annually

Dedham, Massachusetts -- The worldwide market for low power AC drives is expected to grow at a Compounded Annual Growth Rate (CAGR) of 4.7 percent over the next five years. The market was $4,115 million in 2002 and is forecasted to be over $5,175 million in 2007, according to a new ARC Advisory Group study, "Low Power AC Drive Worldwide Outlook."

While shipments to manufacturing industries will gradually recover, energy intensive markets outside the manufacturing sector will see the greatest growth. "Declining prices of AC drives, when contrasted against rising energy costs, will shorten the payback period and further accelerate market growth particularly in power ratings below 40kW," according to Research Director Amitava Bhattacharjee ([email protected]), the principal author of this market study.

Suppliers with Alliances Have the Advantage

The global economic slow-down affected suppliers with strong home markets that suffered its impact, but suppliers that depended on foreign markets and forged alliances with foreign suppliers prospered. The ARC study compares supplier shares in a market where the relative positions between the leading suppliers are changing more rapidly than the market itself, and alliances range from marketing arrangements through to production and R&D.

Smaller Drives Will Break the Payback Barrier

The market for micro and low-end drives below 40kW will grow as their payback period breaks below the three-year threshold. Technological trends are also in evidence as leading suppliers use increasing processing power to advantage in functionality-rich drives that have the capability to replace the smaller control systems used in OEM machinery.

OEM Markets and Energy Costs Determine Regional Trends

Europe and Japan form a major proportion of the worldwide market because of strong OEM demand and high costs of energy. Asia is a fast growing market particularly as the Chinese economy gets into overdrive and many of the developing economies there, are energy deficient.

Further information on this study can be found at: http://www.arcweb.com/research/auto/acdriveslo-ww.asp

Founded in 1986, ARC Advisory Group has grown to become the Thought Leader in Manufacturing and Supply Chain solutions. Further information can be obtained from ARC, Three Allied Drive, Dedham, MA 02026, 781-471-1000, Fax 781-471-1100, E-mail [email protected], Web ARCweb.com.

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