Analysis of the North American Generator Set Rental Market

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Analysis of the North American Generator Set Rental Market

  1. 1. Analysis of the North American Generator Set Rental MarketEconomic Recovery and Increased Industrial Activity Drive Growth NADD-14 June 2012
  2. 2. Executive SummaryNADD-14 4
  3. 3. Executive Summary The overall North American generator set rental market is mature with the compound annual growth rate (CAGR) expected to be around 3.7 percent between 2011 and 2017. The degree of competitiveness is increasing as the market participants try to get a stronger foothold in the generator set rental market. The need for continuous power from certain end user segments, including hospitals, telecom, and oil and gas are identified as the major driving factor for the market. Economic slow down is hindering the growth of the market in the short term. The utility and industrial segments are expected to grow more than other end user segments. Continuous power is the major revenue generating segment for the generator set rental market in the application segment. Aggreko is identified as the market leader with around 36.0 percent market share in the North American generator set rental market. With all the products serving the same purpose in terms of applications, it is highly competitive in product differentiation and uniqueness. Source: Frost & Sullivan analysis.NADD-14 5
  4. 4. Executive Summary Market Engineering Measurements Total Generator Set Rental Market: North America, 2011 Market Overview Market Size at Base Year Market Stage Market Revenue End of Forecast Market Growth Period Rate Mature $773.3 M $995.4 M 3.5% (2011) (2017) Compound Degree of Customer Price Market Annual Growth Technical Sensitivity Concentration Rate Change 3.7% 8 5 72.0% (% of market share held by (CAGR) (scale: 1 [low] to 10 [High]) (scale: 1 [low] to 10 [High]) top 3 companies) For a tabular version click here. Decreasing Stable Increasing Note: All figures are rounded. The base year is 2011. Source: Frost & Sullivan analysis.NADD-14 6
  5. 5. Executive Summary Market Engineering Measurements (continued)Competitor Overview Total Addressable Market Number of Number of Number of Replacement Companies that Companies that Competitors Rate Exited* Entered* More than 15 to 20 1 0 15 Years(active market competitors in (average period of unit base year) (2011) (2011) replacement)Decreasing Stable Increasing *Companies with revenue of more than $50 M revenue. Note: All figures are rounded. The base year is 2011. Source: Frost & Sullivan analysis.NADD-14 7
  6. 6. Executive Summary End user segments will benefit from 1 offering more customized products. Identifying niche market participants 2 will increase the customer base in certain segments such as oil and gas. It is important to identify potential 3 markets for power rental outside North America. Market participants should include 4 biofuel-based generator sets in the product portfolio. Source: Frost & Sullivan analysis.NADD-14 8
  7. 7. Diesel Generator Set Rental Segment Breakdown Key Takeaway: Environmental pressure for enhanced efficiency and reduced emissions drive rental companies to upgrade their generator sets. Important Segment Characteristics Factors Assessment Trend Opportunity Size ($M) $801.3 M Increasing Primary Needs Reduced emissions Increasing Price Sensitivity 7 Stable Purchase Influencers Efficiency, reliability, availability, and Stable after-sales service Distribution Structure Direct sales, manufacturer representatives, third party rental Stable suppliers Demand for Innovation 5 Stable Source: Frost & Sullivan analysis.NADD-14 57
  8. 8. Gas Generator Set Rental Segment Breakdown Key Takeaway: Increase in natural gas availability combined with its low impact on the environment could drive the demand for gas generator sets in North America. Important Segment Characteristics Factors Assessment Trend Opportunity Size ($M) $194.1 M Increasing Primary Needs Reduced emissions Increasing Price Sensitivity 7 Stable Purchase Influencers Efficiency, reliability, availability, and Stable after-sales service Distribution Structure Direct sales, manufacturer representatives, third party rental Stable suppliers Demand for Innovation 6 Stable Source: Frost & Sullivan analysis.NADD-14 62

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