Electric Drives Market in Discrete Industries in Central and Eastern Europe

This Frost & Sullivan research service titled Electric Drives Market in Discrete Industries in Central and Eastern Europe provides an overview of the current state of development in the emerging markets for electric drives in key countries of the region and examines the potential for growth in five discrete manufacturing industries. In this research, Frost & Sullivan's expert analysts thoroughly examine the following discrete industries: heating, ventilation and air conditioning (HVAC), material handling, machine tools, automotive and textiles and clothing.

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Market Overview

CEE Emerges as an Important Market for Electric Drives Suppliers

The year 2007 emerged as another record-breaking year for suppliers of electric drives in central and eastern Europe (CEE). Discrete industries, such as HVAC and material handling, were the biggest contributors to the market in terms of revenue generation. Heightened understanding and acceptance of drive technology, accompanied by rising end-user focus on energy-efficient systems, continued to be the key drivers for growth.

"The role of CEE as a production arm of the EU15 has been increasing rapidly over the last few years," notes the analyst of this research. "This has stimulated the expansion of the OEMs base in the region which, in the case of discrete industries, are the most important links between electric drives suppliers and end-users." Moreover, the overall economic growth of this region has created a positive investment atmosphere. New investments and modernisation initiatives have aimed at advancing process automation and promoting energy-efficient operations. Economic growth over the past few years in the CEE region has resulted in a significant increase in industrial production output. This has had a very positive effect on the sales and profitability of OEMs in the region. OEMs from the region have started competing successfully on a global market with their high-quality and competitively priced products. "These trends have been particularly noticeable among HVAC, material handling and machine tools manufacturers in the region," adds the analyst. "This, coupled with the trend among western European OEMs to relocate production to eastern European countries, has made the region increasingly important to suppliers of electric drives."

Focus to be Equally on Price, Quality, Technological Advances and After-sales Service

The CEE market for electric drives in discrete industries is expanding. However, as industries are largely dependent on economic growth in the region, the electric drives market will be challenged by the changing economic conditions in CEE countries. In 2007, the market generated $105.0 million in revenues and demonstrated 8.7 per cent increase over revenues in 2006. Growth rates are expected to be influenced by the global financial turbulence, which has affected industries in the CEE as well. Moreover, the electric drives market in discrete industries in the CEE region is extremely price sensitive. The majority of local OEMs, especially in the HVAC and material handling industries, choose their supplier based on price. The prices of the drive components have also been growing recently, contributing to additional pressure on electric drive suppliers.

"With changing economic conditions, the purchasing power of discrete industry OEMs will rise rapidly, compelling suppliers of electric drives to compete on price, quality, technology advancements and after sales service," remarks the analyst. "This means that any competitor who turns out to be weak at any of these purchasing criteria will face the immediate threat of losing their current market position." However, in the long term, the market will benefit from increasing acceptance of electric drives technology and the need for solutions that would make production equipment and process more energy and operationally efficient.

Market Sectors

Expert Frost & Sullivan analysts thoroughly examine the following application sectors in this research:

• Heating, ventilation and air conditioning (HVAC)
• Material handling
• Machine tools
• Automotive
• Textiles and clothing

Technologies

The following technologies are covered in this research:

• AC drives
• DC drives
• Servo drives