Although mature, the European gearbox and gear motors market has consistently recorded moderate growth, except in 2009 during the global recession. The market is highly competitive with very low margins. Buyers are becoming more sensitive and manufacturers can no longer rely only on low production costs to gain a competitive edge. 

Analysis from Frost and Sullivan finds that the gearbox and gear motors market in Europe earned revenues of €2,928.1 million in 2010. They estimate the market will reach €3,721.15 million in 2017.

The need to cut costs and improve productivity is driving European manufacturers to invest in more efficient power transmission technologies. They are also focusing on product differentiation and technological innovation to ensure the sustained use of geared components in future.

“Economic stability, with its attendant increase in consumer confidence and spending, will push the gearbox and gear motors market back on track,” notes Frost and Sullivan Research Analyst Ramasubramanian Natarajan. “Rising investments in major end-user segments such as wind power, food & beverage and material handling will provide a fillip to geared components in the short- and medium-term.” 

In particular, heightened environmental concerns and escalating energy costs will promote the use of wind power farms – a consistent end-user segment – resulting in greater demand for gear solutions. At the same time, simplicity of design will facilitate the widespread acceptance of gears technology across other applications and end-user segments. This technology is perceived to be the most cost-effective for industrial mechanical power transmission.

“Modular design and flexibility in usage has boosted the cost-effectiveness of geared products,” adds Ramasubramanian. “A substantial customer base for gearbox and gear motors is expected to impact the growth statistics of the market.” 

The prevalence of gearbox and gear motors is, however, being threatened by alternative and advanced technologies like variable frequency drives. Widespread availability, falling prices and increasing awareness about the advantages of electric drives are motivating end-users of gear products to adopt these newer technologies.

“This has been exacerbated by the fact that most potential applications have already been identified and satisfactorily addressed by gearbox and geared motor manufacturers,” remarks Ramasubramanian. “Consequently, they have found it difficult to penetrate newer applications and increase their market share.”

To sustain growth, market participants should focus on nurturing the customer-manufacturer relationship. Also, as end users shift their manufacturing base to Eastern Europe, motor manufacturers need to augment their penetration of these regional markets. Strategic merging and sharing of technology between companies can also lead to product development for mutual benefit. To offset foreign competition, manufacturers should invest in R+D to produce cost-effective and high-quality products. 

“In order to compete effectively against low-cost imports, European manufacturers can outsource the production of non-critical components to regions which offer low-cost labour and raw materials,” advises Ramasubramanian. “The final component can then be inspected and assembled by more skilled labour in Europe.”

Frost and Sullivan

www.frost.com 

- Edited by Chris Vavra, Control Engineering, www.controleng.com