Electric Drives Market in the European Material Handling IndustryFrost & SullivanJanuary 7, 2009 146 Pages - SKU: MC2205113 |
| Ability to Cut Energy Costs of Material Handling Equipment to Boost Uptake of Drive Solutions Electric drives are increasingly being used to reduce the energy consumption of material handling equipment. A growing number of drive manufacturers are offering drives with more value-added features at lower prices, decreasing the payback period of the customers’ investment in drives. Such strategies are fuelling the expansion of the electric drives market in the European material handling industry. The most important need in material handling equipment is to cut energy consumption due to spiralling energy costs. This has triggered the need for energy-efficient solutions for equipment so that net energy consumption falls. In this context, electric drives are gaining acceptance as the most cost-effective solution to combat increasing energy costs. “The mounting demand for intelligent and flexible drive systems is propelling the sales of drives,” notes the analyst of this research. “Heightened adoption is also being supported by the growing demand for energy-efficient systems by end users of material handling industry to combat rising energy costs.” Some European governments are offering incentives to organisations to install energy-efficient systems in their production facilities. Growing awareness about the advantages of using drives to conserve energy has fuelled uptake levels, while encouraging demand for more effective drive solutions. High Installation Costs act as Deterrent The high installation costs associated with drives have resulted in end users opting for inexpensive alternate technologies. Furthermore, end users are reluctant to invest in new material handling machinery, as it is expensive. Old systems tend either to be repaired or refurbished. The lack of new systems is restricting the number of buyers for drives, thereby slowing down the growth of the drives market and investment in new technology. The material handling industry finds maximum application for electric drives with power ratings of less than 22 kW. This is resulting in intensifying competition for low-power electric drives. The pressure on manufacturers in this industry is high as there is limited scope for profitability for drives with power ratings below 22 kW. The dearth of OEMs, who form a major segment of the distribution channel, has also dampened market growth. “End users have been opting for low-cost technologies due to the high installation cost of drives,” remarks the analyst of this research. “However, the reduction of prices due to intensifying competition will widen the potential end-user base.” Drive manufacturers should invest in R&D and devise solutions that will enable them to offer drives at a lower price and with more value-added features. Customised drives for specific solutions and for particular industries could be some of the effective strategies that drive manufacturers can adopt to expand the market. “The onus is on large manufacturers to differentiate themselves from the competition,” concludes the analyst of this research. “They can achieve this by offering cost advantages on their electric drives.” |
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