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Electric Drives Market in European HVAC Industry

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An analyst briefing on the electric drives market in the European HVAC industry.

An analyst briefing on the electric drives market in the European HVAC industry.

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  • 1. Electric Drives Market in European HVAC Industry Environmental, Economical, and Biological Concerns Spur Growth in European HVAC Drives Market Ramasubramanian Natarajan, Research Analyst Industrial Automation & Process Control- Europe 27-06-2012© 2012 Frost & Sullivan. All rights reserved. This document contains highly confidential information and is the sole property ofFrost & Sullivan. No part of it may be circulated, quoted, copied or otherwise reproduced without the written approval of Frost & Sullivan.
  • 2. TODA Functional Expertise Evaluating the Industrial Automation & Process Control Market Analysing emerging trends, technologies, market dynamics across different geographies New market analysis, market sizing and forecasting Best practices identification and trend analysis Market assessment and opportunity identification Industry Expertise Competitive intelligence across the industrial automation sector Qualitative research skills in primary and secondary domain Industry intelligence and analyticsRamasubramanian Technical expertise of automation devicesNatarajan What I bring to the Team Market understanding along with technical knowhow of automation productsResearch Analyst, Strategic data and analysisIndustrial Automation Ability to observe and identify beyond obviousand Process Control, Excellent Oral and Written Communication Skills Career HighlightsFrost & Sullivan Technical understanding of electrical components with hands on experienceChennai, India Published author with insights on industry trends in the automation domain Education Masters of Science in Electrical and Electronics Engineering, University of Glasgow, Glasgow, United Kingdom Bachelors of Technology in Electrical and Electronics Engineering, ICFAI Institute of Science and Technology, Hyderabad, India 2
  • 3. CONTENTS Scope Need for VFDs in European HVAC Industry VFDs –A Better Technology Facts and Figures Trends by Product Type and Applications Key Factors Influencing the Market and Value Additions Growth Prospects and Supply Chain Key Takeaway 3
  • 4. SCOPE OF THIS BRIEFING Variable Frequency Drive Segmentation by Segmentation by Product Type Application AC Fans DC Pumps Servo Compressors Residential Buildings TYPES OF Commercial Buildings INFRASTRUCTURE CONSIDERED Industrial Buildings Source: Frost and Sullivan Analysis 4
  • 5. Scope (continued)GermanyItalyFranceThe United Kingdom (U.K.) FINLAND NORWAY SWEDENIberiaSpain and Portugal ESTONIA IRELANDScandinavia LATVIA DENMARK LUXEMBOURGNorway, Sweden, Finland, and Denmark UNITED KINGDOM LITHUANIABenelux THE NETHERLANDS POLANDBelgium, The Netherlands, and Luxembourg BELGIUM GERMANYRest of Western Europe (RoWE) CZECH REPUBLIC SLOVAKIAAustria, Switzerland, Greece, And Ireland FRANCE SWITZERLAND AUSTRIA SLOVENIA HUNGARYEastern Europe (E.E.) ROMANIA ITALY ITALYBulgaria, Hungary, Poland, Latvia, PORTUGAL SPAIN BULGARIACzech Republic, Lithuania,Slovakia, Slovenia, GREECERomania, and Estonia Source: Frost and Sullivan Analysis 5
  • 6. Need for VFDs in European HVAC Industry Electric Drives Market in HVAC Industry: Electricity Electric Drives Market in HVAC Industry: Electricity Use, Sector Break-up (Europe), 2010 Use in Industrial, Residential, and Commercial Sectors by Process (Europe), 2010 13.0% 14% 13.0% 8% 40% 4% 45.0% 8% 29.0% 3% 23% HVAC Lighting Cooking Residential Buildings Commercial Complexes Equipments Refrigeration Water Heating Industrial Buildings Others Miscellaneous Others include: Agriculture, Transport, City Lighting, Entertainment. Note: All figures are rounded; the base year is 2011. Source: Frost & Sullivan analysis. 6
  • 7. VFDs –A Better Technology Electric Drives Market in HVAC Industry: Energy Consumption Versus Required Output Load (Europe), 2010 Source: Frost and Sullivan Analysis 7
  • 8. Facts and Figures Electric Drives Market in the HVAC Industry: Revenue Forecast (Europe), 2008-2016 CAGR (2011-2016): 12.3% Servo Drives AC Drives DC Drives 2011 2016 CAGR: 2011 2016 CAGR: 6.6% 13.3% 2011 2016 CAGR: (1.5%) Revenue Growth Rate (%) Revenue ($ Million) 700.0 25.0 350.0 0.0 0.0 (25.0) 2008 2009 2010 2011 2012 2013 2014 2015 2016 Year Revenue ($ Million) Revenue Growth Rate (%) Note: All figures are rounded; the base year is 2011. Source: Frost & Sullivan analysis. 8
  • 9. Trends by Product Type and Application Electric Drives Market in the HVAC Industry: Electric Drives Market in the HVAC Industry: Per cent Share by Product Type (Europe), 2011 & 2016 Per cent Share by Application (Europe), 2011 & 2016 3.7% 2.7%100.0% 6.8% 3.1% 100.0% 13.3% 13.1%80.0% 80.0% 22.5% 22.4%60.0% 60.0% 89.5% 94.2%40.0% 40.0% 64.2% 64.5%20.0% 20.0% 0.0% 0.0% 2011 2016 2011 2016 AC Drives DC Drives Servo Drives Fans Pumps Compressors Note: All figures are rounded; the base year is 2011. Source: Frost & Sullivan analysis. 9
  • 10. Key Factors Influencing the Market Electric Drives Market in the HVAC Industry: Market Drivers and Restraints (Europe), 2012-2016 Rise in energy cost Standards and Growth in construction directives mandating infrastructure energy efficiency Increased awareness about drives’Drivers Drivers advantages Focus on air quality and comfort of residentsRestraints Restraints Lag in Implementation of Erosion of standards and directives manufacturing base On-going debt crisis Denotes current impact Denotes long-term impact Source: Frost and Sullivan Analysis 10
  • 11. Value Additions of VFDs in HVAC Industry Upkeep Value Comfort Health VFDs reduces the Energy usage of One distinctive starting torque any infrastructure Advanced HVAC method is to and stress on the can be reduced system coupled control the flow of motor by implementing with Electric air using a components. an Electric Drive. Drives are being VFD, and This results in This in turn implemented to enhance the longer life and reduces the resolve health comfort levels of lower energy bills of the related issues. the residents. maintenance users. costs. Source: Frost and Sullivan Analysis 11
  • 12. Growth Prospects for VFDs in European HVAC Industry Eastern Europe Growth Potential for Scandinavia GermanyElectric Drives Across Italy France Different Regions The U.K (Europe), 2012-2016 Benelux RoWE Iberia Electric Drives Market in the HVAC Industry: Per cent of Revenue by Geography (Europe), 2010 11.3% 16.5% Smart Buildings Market: Regional Life Cycle 8.4% Analysis (Europe), 2012 10.9% 7.3% 14.0% 13.3% 7.9% 10.4% Germany Alpine & Benelux The United Kingdom France Scandinavia Italy Spain Germany Italy FranceEasternEurope Central UK Iberia Scandinavia Europe Benelux RoWE EE Development Growth Maturity Note: All figures are rounded; the base year is 2011. Source: Frost & Sullivan analysis. 12
  • 13. Supply Chain Analysis Electric Drives Market in the HVAC Industry: Key Decision Makers (Europe), 2011 Key Takeaway: EPCs are the key decision makers in choosing an electric drive for OEMs an application based on their requirements and cost considerations. End-Users EPCs Electric Drives Market in the HVAC Industry: Key Distribution Channel Analysis (Europe), 2011 Decision Makers Direct Sales 15%Key Takeaway: OEMs play acrucial role in successful 60%distribution in drives to End- VFD OEMs Endusers by combining their Manufacturesdrives to their equipments likefans, pumps, AHUs and 25%compressors. Distributors Note: All figures are rounded; the base year is 2011. Source: Frost & Sullivan analysis. 13
  • 14. Key Takeaway Value-added services, such as after-sales service, are critical and determines the customer’s choice of drive.Energy efficiency regulations will give a boost to the sales of VFDs in the European HVAC industry. A simpler user interface and simpler programming would ensure customer satisfaction, thereby engendering customer loyalty and increase in sales of HVAC drives. Participating in trade shows involving the HVAC industry could help OEMs and end users better understand a product. Source: Frost & Sullivan Analysis. 14
  • 15. Next StepsDevelop Your Visionary and Innovative Skills Growth Partnership Service Share your growth thought leadership and ideas or join our GIL Global Community Join our GIL Community Newsletter Keep abreast of innovative growth opportunities 15
  • 16. Your Feedback is Important to Us What would you like to see from Frost & Sullivan?Growth Forecasts?Competitive Structure?Emerging Trends?Strategic Recommendations?Other? Please inform us by “Rating” this presentation. 16
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  • 18. For Additional Information Anna Zanchi Ramasubramanian Natarajan Marketing & Communications Executive, Senior Research Analyst, Industrial Automation & Process Control - Industrial Automation & Process Control - Europe Europe +39.02.4651 4819 +91 44 6681 4169 anna.zanchi@frost.com ramasubramaniann@frost.com Sivakumar Narayanaswamy Muthukumar Viswanathan Program Manager, Practice Director, Industrial Automation & Process Control - Industrial Automation & Process Control - Europe Europe +91 44 6681 4186 +44 20 7915 7804 sivakumarn@frost.com muthukumar@frost.com 18