low-voltage-motors-report-3-vols-2014.pdf

IHS Technology

The World Market for LowVoltage Motors - 2014 Edition July 2014

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IHS Technology

The World Market for Low Voltage Motors - 2014 Edition

Contents Executive Summary ....................................................................................................................................................... 5 Chapter One Introduction, scope and methodology ................................................................................................ 11 1.0 Introduction ......................................................................................................................................................... 12 1.1 Scope .................................................................................................................................................................... 12 1.1.1 IE4: Super Premium Efficiency motors ........................................................................................................... 13 1.1.2 Differences in terminology relating to IE4 motors ........................................................................................... 14 1.1.3 Point of measurement for market value .......................................................................................................... 15 1.1.4 Efficiency classifications .................................................................................................................................. 16 1.1.5 Report structure by geographic region ............................................................................................................ 16 1.1.6 Application, discrete, process & other manufacturing sectors ........................................................................ 17 1.1.7 Enclosure type ................................................................................................................................................ 21 1.1.8 Power rating .................................................................................................................................................... 22 1.1.9 IEC & NEMA frame sizes ................................................................................................................................ 22 1.1.10 Supply channel ............................................................................................................................................. 23 1.2 Report content ..................................................................................................................................................... 24 1.3 Research methodology....................................................................................................................................... 24 1.3.1 Base year & forecast methodology ................................................................................................................. 24 1.3.2 Data collection methods & sources ................................................................................................................. 25 1.4 Economic specific forecast assumptions ........................................................................................................ 25 1.4.1 The relevance of GDP & industry sector performance ................................................................................... 25 1.4.2 The approach to developing forecasts for key economic series ..................................................................... 26 1.4.3 Average selling price (ASP) assumptions & unit volume analyses ................................................................. 26 1.4.4 Exchange rates ............................................................................................................................................... 26 Chapter Two The world market for low-voltage motors ........................................................................................... 28 2.0 Introduction ........................................................................................................................................................ 29 2.1 World economic outlook ................................................................................................................................... 29 2.2 General Trends in the global low-voltage motor market................................................................................ 31 2.2.1 Low-voltage motors market v. the total motors market ................................................................................... 31 2.2.2 Understanding the global low-voltage motor market ...................................................................................... 31 2.2.3 Factors indirectly influencing growth of the low-voltage motor market .......................................................... 37 2.2.4 Indirect influences on the low-voltage motor market ...................................................................................... 39 2.2.5 IE4 Super Premium Efficiency motors officially defined ................................................................................. 42 2.2.6 The IE4 market: perceived barriers & ROI justification .................................................................................. 46 2.3 Direct influences on the global low-voltage motor market ........................................................................... 47

IHS™ Technology Formerly: iSuppli, Screen Digest, Displaybank and IMS Research COPYRIGHT NOTICE AND LEGAL DISCLAIMER © 2014 IHS. No portion of this report may be reproduced, reused, or otherwise distributed in any form without prior written consent, with the exception of any internal client distribution as may be permitted in the license agreement between client and IHS. Content reproduced or redistributed with IHS permission must display IHS legal notices and attributions of authorship. The information contained herein is from sources considered reliable but its accuracy and completeness are not warranted, nor are the opinions and analyses which are based upon it, and to the extent permitted by law, IHS shall not be liable for any errors or omissions or any loss, damage or expense incurred by reliance on information or any statement contained herein. For more information, please contact IHS at [email protected], +1 800 IHS CARE (from North American locations), or +44 (0) 1344 328 300 (from outside North America). All products, company names or other marks appearing in this publication are the trademarks and property of IHS or their respective owners.

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The World Market for Low Voltage Motors - 2014 Edition

2.3.1 Organic revenue growth v. inorganic revenue growth .................................................................................... 47 2.4 Overview of the world market for low-voltage motors .................................................................................... 52 2.4.1 Low-voltage motor efficiency legislation by region ......................................................................................... 52 2.4.2 The world market for low-voltage motors by efficiency class ......................................................................... 57 2.4.3 The world market for low-voltage motors by region ........................................................................................ 58 2.4.4 The world market for low-voltage motors by application ................................................................................. 59 2.4.5 The world market for low-voltage motors by industry sector .......................................................................... 60 2.4.6 Low-voltage motor market in the European Union in 2015 and 2017 ............................................................ 61 2.4.7 The world market for low-voltage motors by frame size ................................................................................. 62 2.4.8 The world market for low-voltage motors by sales channel ............................................................................ 62 2.4.9 The world market for low-voltage motors by power rating .............................................................................. 63 2.4.10 The world market for low voltage motors by enclosure type ........................................................................ 63 2.5 World market share analysis for 2013 .............................................................................................................. 63 2.6 Low-voltage motor market structure ................................................................................................................ 64 2.6.1 Recent motor market mergers & acquisitions ................................................................................................. 64 Chapter Three The EMEA market for low-voltage motors ....................................................................................... 94 3.0 Introduction ......................................................................................................................................................... 95 3.1 The EMEA market for low-voltage motors ......................................................................................................... 95 3.1.1 The EMEA market for low-voltage motors by efficiency class ........................................................................ 97 3.1.2 The EMEA market for low-voltage motors by region ...................................................................................... 98 3.1.3 The EMEA market for low-voltage motors by application ............................................................................. 106 3.1.4 The EMEA market for low-voltage motors by manufacturing sector ............................................................ 106 3.1.5 The EMEA market for low-voltage motors by frame size.............................................................................. 107 3.1.6 The EMEA market for low-voltage motors by sales channel ........................................................................ 107 3.1.7 The EMEA market for low-voltage motors by power rating .......................................................................... 108 3.1.8 The EMEA market for low-voltage motors by enclosure............................................................................... 108 3.2 EMEA market share analysis for 2013 ............................................................................................................ 108 Chapter Four The Americas market for low-voltage motors ................................................................................. 140 4.0 Introduction ....................................................................................................................................................... 141 4.1 The Americas market for low-voltage motors .................................................................................................. 141 4.1.1 The Americas market for low-voltage motors by efficiency class ................................................................. 141 4.1.2 The Americas market for low-voltage motors by region ............................................................................... 143 4.1.3 The Americas market for low-voltage motors by application ........................................................................ 149 4.1.4 The Americas market for low-voltage motors by manufacturing sector ........................................................ 149 4.1.5 The Americas market for low-voltage motors by frame size ......................................................................... 150 4.1.6 The Americas market for low-voltage motors by sales channel ................................................................... 150 4.1.7 The Americas market for low-voltage motors by power rating ..................................................................... 150 4.1.8 The Americas market for low-voltage motors by enclosure .......................................................................... 151 4.2 Americas market share analysis for 2013 ...................................................................................................... 151 Chapter Five The Asia-Pacific market for low-voltage motors ............................................................................. 181 5.0 Introduction ....................................................................................................................................................... 182 5.1 The Asia-Pacific market for low-voltage motors ........................................................................................... 182 5.1.1 The Asia-Pacific market for low-voltage motors by efficiency class ............................................................. 183 5.1.2 The Asia-Pacific market for low-voltage motors by region............................................................................ 184

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The World Market for Low Voltage Motors - 2014 Edition

5.1.3 The Asia-Pacific market for low-voltage motors by application .................................................................... 189 5.1.4 The Asia-Pacific market for low-voltage motors by manufacturing sector .................................................... 189 5.1.5 The Asia-Pacific market for low-voltage motors by frame size ..................................................................... 190 5.1.6 The Asia-Pacific market for low-voltage motors by sales channel ............................................................... 190 5.1.7 The Asia-Pacific market for low-voltage motors by power rating .................................................................. 190 5.1.8 The Asia-Pacific market for low-voltage motors by enclosure ...................................................................... 190 5.2 Asia-Pacific market share analysis for 2013 .................................................................................................. 191

Appendix 1: List of tables and figures ..................................................................................................................... 221 Appendix 2: Company directory ............................................................................................................................... 226 Appendix 3: Discrete, process and other industry codes ..................................................................................... 228 Appendix 4: IHS GDP and machinery production forecasts ................................................................................. 230

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IHS Technology

The World Market for Low Voltage Motors - 2014 Edition

The World Market for Low Voltage Motors - 2014 Edition Mark Meza, Principal Analyst

Executive Summary The world market for low voltage (LV) integral horsepower (IHP) motors was estimated to be worth $15,595 million in 2013, with 49.8 million units shipped during the year. The world market slowed to a moderate 5.7% revenue growth in 2012 after two consecutive years of double-digit growth of 14.3% and 10.9%, respectively, during 2010 and 2011. Improved global revenue growth of 6.6% in 2013 can be attributed to: 

Shale gas renaissance in North America due to ‘fracking’ technologies. Fracking technology has allowed previously unreachable oil deposits trapped in porous shale rock to be harvested from existing wells



Strong feedstock supply, which stimulates growth in chemicals, petrochemicals and petroleum byproduct production



Improved, but still recovering domestic LV motor market demand in China and the Eurozone



With the exception of mining, much improved Process Sector (end-user) market performance



Inorganic revenue enhancement resulting from the intensifying transition to IE2 LV motors in the Eurozone and South Korea, and to IE3 motors in North America.

Although growth was much improved in 2013 compared to 2012, it is thought that certain market constraints limited revenue growth during the year. These were: 

The global mining sector began to slow in late 2012 due to lack of new investment funding. This caused stoppage in 2013 of ongoing mining projects, and caused start dates for new projects to be pushed out to 2014 or 2015.



A weak metals sector in China resulting from a glut of Chinese-produced steel.



There was relatively no movement in 2013 concerning China’s transition to IE2 LV motors that officially started in September 2012. The slow start of the transition is thought to be a result of the Chinese market contraction in 2012, and less than 5% revenue growth in 2013.



An abundance of IE1 motors still being sold into official IE2 and IE3 markets of Western Europe, the US, South Korea, and Brazil.

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The World Market for Low Voltage Motors - 2014 Edition

Barring further significant economic setbacks of which were seen in 2012 and 2013, IHS expects revenue growth to remain steady if not strong due to the ongoing transition to higher efficiency, more expensive LV motors peaking in the Eurozone and China during the forecast period. IHS has forecast revenue growth that is expected to result in the global market growing by almost $10 billion through 2018, generating a CAGR of 9.9% for revenues and 5.1% for units. By 2018, IHS expects the global LV motor market to increase to $25,441 million, with unit over 63.8 million unit shipments. It is important to note that a period of significant inorganic revenue growth is expected to start in 2017, when the EU begins to transition the bulk of its motor market, that is power ratings of 0.75kW – 7.5kW, to IE3. However, IE2 motors with a VFD will be allowed at this time and will have a negating impact on IE3 motor revenues to some degree.

Ongoing transitions to IE2 and IE3 motors Economic difficulties in China and the Eurozone have slowed the market’s demand for LV motors in the past few years. These difficulties have been further compounded by loopholes that exist in the regulations that have significantly diminished the intended impact of the regulations. The ongoing transitions to the next higher efficiency level of LV motor occurring in all three regions all can be similarly characterized as steady, but occurring at a slow pace. This is evidenced by reported data indicating that low-cost IE1 LV motors are still being sold in significant quantities in regions where they were required to be phased out of the market nearly one, and in some cases, two decades prior. This has resulted in spreading inorganic revenue growth over an estimated 5-6 year period. Three to six years into some efficiency shifts, it was revealed by reported data that more than half of the LV motors sold into a respective market were of the outgoing efficiency class. Based on this trend analysis, IHS concludes that a regional transition to the next higher efficiency class of LV motor will occur over a 4-6 year period for large markets such as the US, China and Western Europe.

Standard Efficiency - IE1 / Below EPAct / Y2-3 IE1 LV motors have been on the decline since 1997 when the US began its shift to IE2/EPAct LV motors. The decline in this motor segment is occurring in all three regions, and intensified greatly when Brazil began its transition to IE2 LV motors in 2009, and again, when the European Union began its transition to IE2 in mid-2011. It was expected that China’s transition to IE2/GB3 starting in late 2012 would further expedite the global decline in this motor segment in 2013. However, a year of contraction in the Chinese market in 2012, followed by low growth in 2013, are thought to have significantly hampered a strong beginning for the shift to IE2 in the country. IHS believes that relatively few IE2 motors were sold in 2013 in China despite it being the first full year of the move to IE2. In addition, IE1 motor revenues were found to be significant even in established IE2 and IE3/NEMA Premium markets in 2013 due to regulatory loopholes that exist in current IEC and NEMA regulations. Amendments to existing IEC and NEMA regulations are expected in 2015, and are intended to fortify the existing regulatory framework with the direct intention of closing loopholes that are allowing IE1 LV motors to be legally sold in IE2 and IE3 marketplaces well beyond their initial phase-out dates. In 2012, a revenue contraction of 7.9% occurred in the IE1 LV motor market, which was followed by another revenue contraction of 7.8% in 2013 as the Eurozone, and North America continued to phase-out these motor types. Contraction is expected again in 2014 with a forecast 5.9% reduction in revenues globally in this motor segment. Growth, albeit poor, is expected in this motor segment in 2015 and 2016. In 2013, IE1 LV motors continued to hold the majority share in the global market and were estimated to account for $6,928 million, or over 44% of global LV motor revenues and nearly 63% of unit shipments. IHS expects a tipping point to be reached in 2017 when IE2 revenues will overtake IE1 revenues at the global level. At this time, it is predicted that the Chinese IE1 market will have peaked as the country will be several years progressed into the shift to IE2. However, revenue growth in the IE1 LV motor market is expected at low levels during the forecast period with market demand coming from countries that have no established energy efficiency regulations such as Russia, India, The Middle East, Central and Eastern Europe, and Africa. This motor segment is expected to generate a CAGR for revenues of negative 1.6% though 2018. However, the IE1 LV motor market is expected to still account for over 26% of the global market revenues during that year.

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The World Market for Low Voltage Motors - 2014 Edition

High Efficiency - IE2 / EPAct / GB3 IE2 LV motors were estimated to account for $3,594 million, or over 23% of LV motor market’s revenues and 20% in terms of units. This motor segment grew robustly by 17.4% in revenues in 2013 after a poor year in 2012 of 0.3% growth. Robust growth is predicted in the coming years as a result of peaking transitions to IE2 in both China and the Eurozone, and also continued growth in the established IE2 market of Brazil. Japan, a market heavily concentrated in IE1 LV motors in 2013, is not expected to add to IE2 growth during the forecasts period as the country intends to skip IE2 and shift towards IE3 starting in 2015. IHS believes the 2015 and 2017 transition to IE3 in the European Union (EU) will only modestly limit IE2 growth due to the expectation that the vast majority of that region’s market will prefer the IE2 + variable speed drive option allowed by EU regulations, over IE3 LV motors. At the global level, the IE2 market is forecast to generate a CAGR of 17.6% for revenues. By the end of 2018, the IE2 market is expected to be the second largest motor market segment in terms of revenues, and is estimated to be worth over $8,000 million and account for 32% of global revenues.

Premium Efficiency - IE3 / NEMA Premium / GB2 The US and Canada are the only established IE3/NEMA Premium LV motor markets in 2013. However, many IE2 and IE1 motors are still being sold into these countries despite the regulations, and this has dampened revenue growth to some extent. New LV motor regulations are expected in 2015 in the US and are intended to further eliminate unintended exemptions that are allowing a significant number of phased-out motor types to still be sold in 2012 and 2013 in these countries. Japan is forecast to provide a significant revenue boost to the global IE3 market when it foregoes IE2 regulatory framework, in favor of one that begins the shift of its industry to IE3 LV motors. The IE3 LV motor segment was estimated to account for 22% of global LV motor revenues, and have a market value of $3,411 million in 2013. Robust year-on-year growth is expected in this market during the forecast period, generating a CAGR of 55.5% for revenues. No new regulatory framework was announced to shift to IE3 beyond the 2017 start date in the EU at the time this report was published.

Super Premium Efficiency - IE4 / Super Premium / GB1 The IE4 LV motor segment is expected to almost triple by the end of the forecast period. The rare earth mineral (REM) exports caps set in place in 2011 by China has resulted in established and new IE4 motor technologies coming to prominence in the past few years, some of which are not dependent on REM-based magnets. However, it is estimated that in upwards of 98% of the global IE4 LV motor market consists of neodymium-based machines in 2013. End-equipment suppliers (fan and pump makers) have entered the IE4 motor market by producing lower cost synchronous reluctance IE4 motors attached to their respective endequipment. IHS believes this will provide stiff price competition in the lower power ranges of continuous duty cycle applications, to stand-alone IE4 producers that continue to manufacture expensive neodymium-based LV motors. Currently, most stand-alone IE4 motors are limited to power ratings of 7.5kW (10HP) or less. However, these motors are increasingly being produced in the 30-37kW (40-50HP) with neodymium or samarium cobalt magnets. This motor segment was estimated to be worth $223 million in 2013 and is poised for robust growth, with a CAGR of 26% for revenues expected during the forecast period. In terms of units, the IE4 market is expected to be heavily concentrated in the US, Germany, France and Japan despite the fact that China has a distinct advantage in mining, domestic production and processing of REMs into sintered neodymium magnets, as well as government sponsored rebates for using these motors. At the time this report was published, no major Chinese manufacturers had an IE4 LV motor product line.

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The World Market for Low Voltage Motors - 2014 Edition

DC motors The integral horsepower (IHP) DC LV motor market continues year-on-year double digit contractions as this motor type is rapidly being displaced by AC induction motors on a global scale. However, the IHP DC LV market is not forecast to vanish completely, as it will serve as a niche legacy replacement market to the dwindling installed base. Many mill motor segments (steel rolling “hot mills”, and pulp and paper mills) around the world have proactively transitioned much of their DC installed base to AC induction motors. The US is estimated to have the largest IHP DC LV motor installed base on the world in 2013, although it too, is on the rapid decline. A CAGR of negative 18.8% for revenues is forecast for the DC motor market through 2018.

EMEA In 2013, the region accounted for $5,008 million, or 32% of global LV motor revenues. A significant portion of this regional market is IE1 as the Middle East, Africa, Russia, and Central & Eastern Europe have no energy efficiency regulations. However, IE1 motors are still being sold in the European Union two full years after the mid-2011 transition to IE2 began. Low revenue growth of 5.9% in 2012 caused by the Eurozone debt crises lingered into 2013 and is thought to be the cause of similarly poor growth in 2013 of 5.1%. Less than favorable economic conditions in the Eurozone for two consecutive years is believed to have slowed the shift to IE2 to some extent, and has had a negative effect on inorganic revenue growth catalyzed by the region’s energy efficiency regulations. Strong mining and oil and gas sectors in Russia, Africa and the Middle East helped bolster the region’s LV motor market during the year. However, a global mining slowdown in 2013 and competition to the oil-producing nations of these two regions from the shale gas boom in the Americas is expected to mitigate growth. Double-digit growth is expected to return to the region in 2015 when the Eurozone’s economic troubles will have stabilized, and the transition to IE2 is expected to peak in intensity. At this time, the Eurozone will be at the forefront of another transition to IE3 for LV motors above 7.5kW (10HP). The shift to IE3 for the majority of LV motors shipped into the EU begins in 2017, when LV motors below 7.5kW (10HP) will have to meet the IE3 standard. However, it remains to be seen if the market will prefer the IE2 LV motor paired with a variable frequency drive (VFD) over the IE3 option. Due to current Eurozone economic difficulties, which further slowed the transition to IE2 motors, the region is expected to perform below the global market average of 9.9%, generating a CAGR of 9.1% during the forecast period.

Americas In 2013, the Americas region accounted for $5,047 million, or 32% of global LV motor revenues. Like in other regions, a significant portion of this region’s revenues continue to be IE1, even in established IE2 and IE3 markets. Steady revenue gro wth of 9.2% in 2013 followed from the previous year’s robust growth of 14.1%. A shale gas renaissance resulting from “fracking” technologies, signs of a return of the US manufacturing base, a still improving US economy, and a stabilized Brazilian economy are thought to the be the primary sustaining forces of growth during the year. The region is expected to sustain double-digit growth rates for the remainder of the forecast period as it has a relatively high number of small, yet emerging economies in South America that are heavily steeped in oil and gas and mining operations (albeit low-cost IE1 motor markets). In addition, shifts to IE2 and IE3 LV motors in Brazil and North America, respectively, is estimated to be well beyond the halfway point. However, this still makes the region’s LV motor marketplace the most expensive in the world. With plenty of potential to turn over the remaining DC installed base in the US, and significant market potential remaining for IE3 motors to displace current IE1 and IE2 sales, the region is expected to outperform the global market average, generating a CAGR for revenues of 12.6% through 2018.

Asia Pacific The Asia Pacific region’s LV motor market was least affected by the global recession and grew at healthy rates during the initial onset of the Eurozone’s economic troubles. However, a severe contraction in in 2012 in the Chinese market resulted in very poor growth performance at the regional level of 0.8%. In 2013, China rebounded to positive modest growth of 4.6%, while Australia’s LV motor market contracted by 8.1% as a result of the mining global slowdown. These factors contributed to limiting the region’s growth to 5.7% during the year.

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The World Market for Low Voltage Motors - 2014 Edition

Like in the EMEA region, the market contraction year in China followed by low growth is believed to have delayed the onset of China’s shift to IE2/GB3 LV motors which officially began in September 2012. In 2015, the region is expected to post good growth as the shift to IE2/GB3 in China is expected to show signs of intensifying. Significant revenue enhancement of the region’s LV motor market is expected from Japan’s shift to IE3 LV motors beginning 2015, and also to the fact that the region contains emerging economies in Vietnam and Thailand at are rapidly industrializing, expanding infrastructure, and becoming global players in production of industrial and commercial products. Despite the majority of the region still being characterized by low-cost IE1 motors, the Asia Pacific region is the largest regional LV motor market and is estimated to be worth $5,540 million, accounting for over 35% of global revenues. The region is forecast to perform significantly under the global market average through 2018, generating a CAGR of 8.4% for revenues.

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The World Market for Low Voltage Motors - 2014 Edition

Executive Summary

Overview: World Market for Low Voltage Motors

CAGR Market Performance during 2009 - 2018

Above Below Significantly below

Regional Efficiency Breakdowns in 2013 7,000 6,000

WORLD

IE1

5,000

Millions $

4,000 3,000

IE2

IE3

2,000

Other

1,000

DC

IE4

0 2,500

Millions $

2,000

EMEA IE1

1,500 1,000

Other IE3

IE4

DC

0

5,047.4

5,579.2

10.5%

12.6%

Asia Pacific Efficiency Class IE1 - Standard Eff

5,540.2

5,890.1

6.3%

8.4%

6,928.3

6,518.1

-5.9%

-1.6%

IE2 - High Eff

3,594.4

4,461.4

24.1%

17.6%

IE3 - Premium Eff

55.5%

3,410.5

4,132.2

21.2%

IE4 - Super Premium Eff

223.2

262.2

17.4%

25.9%

DC Motors

170.5

136.7

-19.8%

-18.8%

1,268.5

1,386.3

9.3%

13.1%

12,238.2

13,303.4

8.7%

9.8%

1,440.0

1,514.1

5.1%

12.2%

TENV: non-hazardous

74.5

76.9

3.1%

7.2%

TENV: hazardous

16.2

17.1

5.7%

8.7%

TEFC: hazardous

1,129.8

1,243.0

10.0%

10.5%

696.6

742.3

6.6%

7.2%

4,567.8

4,900.8

7.3%

10.1%

3,803.3

4,186.9

10.1%

10.3%

5.62-7.5kW (7.5-10HP)

3,338.0

3,662.9

9.7%

10.9%

7.5-45kW (10-60HP)

1,930.9

2,089.5

8.2%

9.0%

45-112.5kW (60-150HP)

769.4

833.2

8.3%

8.3%

150-375kW (200-500HP) 376kW & above (>500HP) Sales Channel Direct to End-user

881.1 304.9

915.0 308.5

3.8% 1.2%

7.4%

2,500

Other Power Rating 0.75-1.5kW (1-2HP)

2,000

2.25-3.75kW (3-5HP)

1,500 1,000

AMERICA

3,000

500

IE3

IE1

IE2

Other

IE4

DC

0 5,000 4,000

ASIA IE1

Direct to OEM

3,000

Direct to Sys Integrator Dist. to End-user

2,000 1,000

IE2 IE3

IE4

DC

0

DC IE4 1.1% 1.4%

Other

Dist. to OEM Dist. to Sys Integrator Total Market

Other 8.1%

IE3 21.9%

DC IE4 2.4% 0.3%

7.2%

1,949.0

2,083.8

6.9%

8.6%

11,233.0

12,185.6

8.5%

10.3%

408.7

436.0

6.7%

9.9%

1,194.7

1,301.1

8.9%

8.7%

667.1 142.8 15,595.3

729.5 160.8 16,896.8

9.3% 12.6% 8.3%

9.4% 9.1% 9.9%

Other 8.3% IE1 25.9%

IE1 44.4%

IE3 31.5%

IE2 23.0%

2013 Market Size ($M) $15,595.3

IE2 31.7%

2018 Market Size ($M) $25,441.0 Jul-14

Source: IHS July 2014

Δ% CAGR 09-18 8.4% 9.1%

Americas

ODP

3,500

Millions $

2013 (M$) 2014 (M$) 5,007.8 5,427.5

Other, non-regulated Enclosure Type TEFC: non-hazardous

IE2

500

Millions $

Region EMEA

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The World Market for Low Voltage Motors - 2014 Edition

Chapter One

Introduction, scope and methodology  Report content  Methodology  Motor types included and not included

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The World Market for Low Voltage Motors - 2014 Edition

1.0 Introduction This report represents IHS’s fifth dedicated analysis of the world market for low voltage (LV) integral horsepower (IHP) motors sold into industrial applications. The global market for LV motors includes motors of 1HP/0.75kW and above, with a voltage rating of less than or equal to 690V. This includes AC induction motors that are segmented into four distinct efficiency classes, direct current (DC) motors, and specialized motors that lie outside of efficiency class regulations. IHS also publishes annual reports covering related product markets, such as medium voltage motors and variable speed drives. Given the association between these products, the analyst researching this report chose to share similar scope and market segmentations, thus enabling the various pieces of research to be used in tandem. IHS’s objective in producing this report is to provide manufacturers interested in the world market for LV motors with detailed information on the current and future performance of this market. The primary objective of this research is to provide an accurate assessment of this market’s performance in the base year 2013, four years following an estimated 21.6% contraction in revenues for the industrial LV motor industry in 2009. The secondary objective of this research is to provide a clear assessment of how the market is expected to perform through 2018 in light of the recent slowdown in the Chinese motor market, and economic woes of the European economy due to the sovereign debt crisis. Less focus is given to the technical aspects of the products. A number of key objectives were defined prior to commencing research for this report. These were: 

To compile market growth estimates for the global LV motor market in 2013 in terms of both dollar revenues and unit shipments



To analyze revenues and unit growth in the major geographic regions where LV motors are sold



To analyze the performance of major industry sectors for LV motors and to forecast their respective growth profiles



To segment the LV motor market by a number of technical specifications, such as energy efficiency class, application, machine and end-user sectors, enclosure type and power rating, to determine the proportion of the market within each segment, and to estimate each segment’s associated growth trends



To use credible economic indicators to project a five year growth scenario with clear justification



To accurately assess the market shares of the major manufacturers of LV motors



To identify and analyze the impact of key market trends on the various product markets

1.1 Scope The scope of this study is to focus on statistics collected for LV motors sold into industrial applications. Manufacturers were instructed to report data for all LV motors sold to the total available market (TAM), and exclude revenues generated by distributor mark-up, intra-company or other ‘captive’ sales, software, services or replacement parts. These data points reflect both direct sales and those to distributors and system integrators. In instances of third-party product branding, revenues were measured at the point of the third-party sale to the TAM, and not the sale by the original manufacturer of the product to the third party. Every effort was made by IHS to not double count revenues as a result of this type of arrangement. For this report, LV motors are defined as having voltages of less than or equal to 690V, and include synchronous permanent magnet motors based on the traditional AC induction design, DC motors and traditional AC induction motors. The term “induction motor” includes motors that “induce” rotating motion using the properties of magnetic induction.

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Squirrel-cage permanent magnet motors are identical in form factor to industrial AC induction motors, but the iron/copper or aluminum rotor has been combined or replaced with a permanent magnet one, leading to synchronous operation and greater efficiency. These LV motors have zero slip under normal operating conditions, unlike AC induction motors that must slip in order to produce torque. There are various alternative names in the industry for similar types of motors. Due to the continuing emergence the IE4 efficiency class motors, the fifth edition of this report has brought an expansion of scope for the IE4 efficiency class to include the traditional permanent magnet motor based on the squirrel-cage design, in addition to old and new motor technologies that achieve this level of efficiency. This market has resided in relative insignificance in years past, having accounted for 504HP)

Conversions from kilowatt (kW) to horsepower (HP) were assigned to practical HP ratings. For example, 375kW is the equivalent to 502 HP. However, 502HP LV motors do not exist. Therefore, in the interest of practicality, IHS has elected to round the conversion to the nearest practical HP rating in this case 375kW ≈ 500HP.

1.1.9 IEC & NEMA frame sizes In addition to the segmentations listed above, regional analyses by IEC and NEMA frame sizes are presented in this report.

By IEC frame sizes Please note to better align the frame size analysis to the power rating analyses, IEC frame size ranges were created (instead of individual frame segment analyses) in the current 2014 edition as follows: 

80 – 100



112 – 132



160 – 225



250 – 355



400 – 560



630 & above

Please note that the Russian GOST standard includes metric frame sizes 63 – 315 that are comparable with the European IEC frame sizes. For the purposes of this report, the Russian GOST standards, assumed to be available only in the Russian Federation and CIS, have been estimated for revenues and units and included in the IEC frame size segmentation analyses.

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By NEMA frame sizes Please note to better align the frame size analysis to the power rating analyses, NEMA frame size ranges were created (instead of individual frame segment analyses) in the current 2014 edition as follows: 

56 – 145



182 – 184



213 – 215



254 – 326



364 – 449



5000 & above

Please note that NEMA regulations technically stop at 440 frame sizes

1.1.10 Supply channel Sales of LV motors were segmented by direct and distribution for each sales channel as follows:

End-user A company, or individual, that uses automation equipment at the place of work. End-users’ automation equipment is often bought as part of a machine supplied by an original equipment manufacturer.

OEM A company which purchases automation equipment for use in the construction of machinery and end-equipment, which is then sold to a manufacturer or an end-user. Machine builders are often referred to as original equipment manufacturers (OEMs).

Systems integrator This category includes businesses that specialize in building or designing automation systems for other companies. Typically the term “systems integrator” is also used for panel builders, sub-contractors (such as electrical engineers) and system houses.

Distributor This category includes businesses that purchase automation equipment for re-sale under the brand name of the original manufacturer. Distributors should not be confused with suppliers that purchase motors for resale under a different brand name. Note additional revenues generated through distributor mark-up are not included in the reported revenues.

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1.2 Report content The report takes the following format: Chapter 2 provides details of the world market for LV motors broken down by efficiency class, geographic region, application, sales channel and various technical segmentations, such as power rating and frame size. Each analysis presents the total market in terms of both revenues and unit shipments. Economic, product-specific and general market trends that affect market performance are also reviewed. Chapters 3, 4, and 5 provide a detailed analysis of the EMEA, the Americas and the Asia Pacific regional markets for LV motors. The chapters highlight the industry, machine, and end-user sectors that are expected to outperform and underperform the overall market. Chapter 6 provides information on the competitive landscape of the LV motors market, including market share estimates of the leading manufacturers in 2013.

1.3 Research methodology 1.3.1 Base year & forecast methodology Base year data analysis For the purpose of statistical analysis, 2013 was used as the base year. Since the report was written in the first half of 2014, it was possible to collect suppliers’ data for all of their respective 2013 revenues and unit shipments, as well as projections for 2014. Hence, the level of accuracy for the 2013 estimates presented in this report is expected to be high. Key manufacturers throughout the world provided revenue and unit shipments data to IHS; this data was analyzed to calculate the approximate size of the market in the base year of 2013. Because more than 70% of the total market data was based on reported sales figures, a “bottoms up” analysis was used. Once the base year data estimates for 2013 were established, growth rates were applied to generate market forecasts from 2014 to 2018.

Forecast methodology The forecasts presented in this report have been derived by carefully considering the extent to which two distinct growth dynamics will directly impact the LV motor markets. The first of these dynamics includes factors such as underlying regional economic growth (GDP), machinery production growth (MP), and the degree by which these industries are recovering from the global economic downturn of 2009, and how they are expected to perform in the future. The second, and most pertinent dynamic is the impact of various regional motor efficiency legislations becoming law around the world during the forecast period considered for this report. In addition, another factor, namely the extent to which the average selling prices are projected to change over time, is also considered as part of this model, although this particular market phenomenon is thought of as indirectly affecting market growth. The forecasts for this report were developed while pursuing the following goals: 

To integrate relevant, credible, and current third party data into the model for assessing and projecting underlying growth for the market



To provide a practical level of transparency to the forecast through clear documentation of adopted assumptions

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

To develop a realistic projection for the short-term (1 to 2 years) forecast. “Realistic” projection means that IHS attempts to project actual market performance over the next two years, taking into account market cycles anticipated during this time frame



To develop a reasonable projection for the mid to long-term (3 to 5 years) forecast.

1.3.2 Data collection methods & sources During the research timespan for this report, a variety of information sources were used to determine the initial scope of the project and to ascertain present and future market trends that are analyzed in the study. These sources included: 

Interviews with global & local LV motor manufacturers



Excel-based data capture spread sheets completed by global & local LV manufacturers



Company annual reports and registered accounts



Business and financial press



Manufacturer brochures, data books, and other technical literature



Other IHS reports



Publications by professional industry and market associations



IHS Global Insights macro-economic business intelligence



International organizations, such as the United Nations and its affiliate organizations, the International Monetary Fund, and the Organization for Economic Cooperation & Development.

1.4 Economic specific forecast assumptions 1.4.1 The relevance of GDP & industry sector performance Since growth of the LV motor markets is closely tied to the economic health and increasing levels of factory automation in each particular region, general economic forecasts are used as the foundation for growth projections. The two main economic series IHS uses most heavily in developing these forecasts are gross domestic product (GDP) and the projected performance of the key industry sectors evaluated as part of this study. GDP is considered to be the total value of consumer and government purchases, private investments, and the net exports of goods and services for a nation. This economic indicator gives a good picture of the financial status of a country not only on a national level, but on an international level as well, because it accounts for the imports and exports of foreign and domestic goods. The future performance of key industry sectors, as predicted by various industry associations and other sources that closely follow the developments of their respective markets, is then considered in conjunction with the GDP forecasts to create a credible forecast for the products presented in this report. IHS believes that a combination of these data series provides a solid framework for predicting market development in automation end-equipment markets. The GDP series is used to illustrate the overall health of the economy, while the industry sector forecasts are used to refine the total forecast to accommodate fluctuations in the performance of various industries in the face of the economic downturn and during the recovery phase. In cases where industry sector forecast data is not available, reasonable projections for the future performance of this data series can be made by evaluating their historical interactions with the GDP series, i.e. whether or not growth tends to be more or less dynamic than GDP. July 2014

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1.4.2 The approach to developing forecasts for key economic series The following approach is adopted for developing the growth series forecasts used in the forecast period 2013 through 2017: 

Short-term GDP forecasts are collected from third party sources. Given the complexity of predicting economic growth, IHS relies on forecasts produced by credible third parties for short-term GDP growth rates. A mixture of data from the following sources was used: the Organization for Economic Cooperation and Development, the International Monetary Fund, the United Nations and related organizations.



Mid- to long term GDP forecasts are derived by IHS. The above listed organizations do not provide mid-term and longterm forecasts for some countries. Consequently, IHS is required to produce these projections. Long-range forecasts of this type are impossible to judge with any level of certainty, so IHS has chosen to estimate GDP for this period by approximating growth to match current expectations. The effect of this approach is to introduce a set of long-range growth forecasts that predict a rebound in economic growth after several years of stagnation and decline.

1.4.3 Average selling price (ASP) assumptions & unit volume analyses In addition to revenue analyses at each product level, unit analyses have also been provided to further illustrate the status of the LV motor market, and to highlight its expected future development. Average selling prices (ASPs) were generated for the base year 2013 at every segmentation level of this report, based on data and interviews provided by LV motor manufacturers. Factors that contribute to changes in average selling price, including price erosion, changes in the product mix and fluctuation of commodity prices, were assessed to calculate a profile of changing ASPs for each product type for the time period 2014 to 2018. In an effort to simplify the forecasting process for subsequent market segmentation, such as by geographic region, the forecast model assumed that the profile of change in total market ASP was constant across the various market segmentations. In other words, the extent to which the ASP will change for the efficiency class and sales channel segmentations is identical to the change for the geographic region and industry sector segmentations.

1.4.4 Exchange rates Table 1.0 Data for this report was collected in US dollars and Euros. Because of the volatility in the currency markets, particularly with the dollar to Euro exchange rate, companies were asked to include any currency conversion rates used in the compilation of their revenues. These currency conversion rates were then normalized using OANDA historical rates for the time period of 1 st January 2013 to 31st December 2013. Fixed currency rates based on 2013 values were used for the remainder of the forecast period 2014 to 2018. The normalized exchange rates used throughout the production of this report are listed in Tables 1.0.

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1.0 Exchange Rates

Exchange Rates Used Base = 1 USD Country Australian Dollar Brazilian Real Canadian Dollar Chinese Yuan Renminbi Euro Hong Kong Dollar Indian Rupee Japanese Yen Norwegian Kroner South Korean Won Swedish Kronor Swiss Franc Taiwan Dollar UK Pound US Dollar

Symbol AUD BRL CAD CNY EUR HKD INR JPY NOK KRW SKR CHF TWD GBP USD

2006

2007

2008

2009

2010

2011

2012

1.3285 2.1800 1.1346 7.9819 0.7970 7.7689 45.3188 116.3366 6.4156 969.9015 7.3786 1.2536 32.5565 0.5435 1.0000

1.1954 1.9453 1.0744 7.6172 0.7308 7.8026 41.3463 117.8145 5.8581 935.2698 6.7599 1.2004 32.8826 0.4999 1.0000

1.1970 1.8402 1.0667 6.9623 0.6834 7.7874 43.6470 103.4662 5.6470 1102.8352 6.5935 1.0831 31.5559 0.5449 1.0000

1.2812 2.0085 1.1417 6.8409 0.7192 7.7522 48.4363 93.6167 6.2978 1279.0774 7.6520 1.0857 33.0665 0.6412 1.0000

1.0906 1.7675 1.0308 6.7788 0.7549 7.7695 45.7127 87.8289 6.0487 1159.8729 7.2095 1.0433 31.5515 0.6475 1.0000

0.9691 1.6753 0.9893 6.4735 0.7190 7.7851 47.2351 79.7414 5.6103 1109.3535 6.4952 0.8871 29.5126 0.6237 1.0000

0.9662 1.9563 1.0000 6.3198 0.7783 7.7575 53.7608 79.8155 5.8234 1130.1728 6.7765 0.9380 29.6622 0.6312 1.0000

2011-12 % Change -0.31% 16.78% 1.08% -2.37% 8.25% -0.35% 13.82% 0.09% 3.80% 1.88% 4.33% 5.75% 0.51% 1.19% 0.00%

Note 1: Currency rates are the yearly average; a negative % change implies a strengthening against the USD. Future currency rates are assumed to be fixed to 2012 values Note 2: http://www.oanda.com/currency/historical-rates-classic?srccont=rightnav

Source: OANDA

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Chapter Two

The world market for low-voltage motors  Low growth in Eurozone continues in 2013  Growth in Americas market slows  Global mining slowdown in 2013  China market recovery delays start of IE2 shift  New regulations on the horizon for 2014 and 2015  IE4 low-voltage motors officially defined by the IEC

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2.0 Introduction This chapter presents and analyzes consolidated market statistics for the world market for industrial low voltage integral horsepower motors with power ratings at or above 0.75kW/1HP. The statistics presented in this chapter are aggregated from the three regional volumes of this study and provide market sizes in terms of both revenues in millions of US dollars (represented as $M), and unit shipments in thousands (represented as ‘k’ units). The base year for the analyses in this report is 2013. Section 2.1 provides an overview of the general trends influencing the world market for low voltage (LV) motors, including discussions of the drivers of market growth, the economic outlook for the global market for LV motors, detailed explanations of the regulatory framework in each of three regions, updates and amendments to the regulations, as well as various product and pricing trends. Section 2.2 provides both qualitative and quantitative analyses of the market, presenting market sizes in 2013 and forecasts from 2014 through 2018. Historical market sizes are provided for 2009 through 2012 for reference.

2.1 World economic outlook The commentary below reflects the GDP data and June 2014 update produced by IHS Economics & Country Risk as part of its country intelligence service. In summary, the global outlook for economic activity continues to change slowly for the better, although considerable risks remain. The aggregated real GDP of the world grew 2.5% in 2012 and 2.4% in 2013; it is currently forecast to increase by 2.8% in 2014 and 3.3% in 2015, though problems still lurk to push it off track with still real risks that the underlying causes of the last recession may return to cause another. The economic outlook differs markedly by region. The initial recovery from recession was stronger in emerging and developing economies but weaker in the advanced economies. More recently, the GDP growth rates of advanced economies have diverged, with the US economy growing much faster than that of the Eurozone. For the near future, increasing global growth in economic activity will be driven by the more developed regions, notably the United States. Although GDP growth rates will be higher in developing economies, notably China, the projected growth rates there will be lower than in recent years. Europe is very slowly dragging itself out of recession. The GDP of the Eurozone fell by 0.6% in 2012 and is estimated to have fallen a further 0.4% in 2013; it is currently forecast to increase slowly by only 1.1% in 2014 and 1.6% in 2015. However, unemployment is not falling from a historically high level and real wages continue to fall; along with tight fiscal policies, tight credit conditions in several countries, excess industrial capacity and still relatively weak export demand, there are few signs of a strong upturn in the near future. Germany’s expansion is strengthening; the United Kingdom is enjoying relatively rapid GDP growth, at least in the short term; economic growth in France, Italy and Spain remain weak. There is, however, gradual improvement. The sovereign debt crisis has abated, though at a heavy social cost in Southern Europe; financial markets are improving; consumer confidence has risen; and inflation continues to decline. On balance, survey evidence suggests that Eurozone activity is moving to stabilization, although it has some way to go. It is now considered more likely than not that Greece will remain in Eurozone.

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GDP in EMEA is currently projected to increase by 1.9% in 2014 and 2.4% in 2015. This improvement is based on expected improvements in financial markets, in stronger fiscal conditions, and in the benefits resulting from structural reforms. However, Greece is currently predicted still to be in recession in 2014, and there remain substantial risks to regional economic activity. For instance, inflation remains substantially lower than the European Central Bank’s 2.0% target; there is concern that the region still sits dangerously close to deflation, which would make the reduction of debt in Southern Europe harder. The relatively strong current growth of economic activity in the United Kingdom carries risks of being unsustainable; driven as it is in part by a property boom in the Southeast and increased consumer spending in part funded by reducing savings. How easily the United Kingdom with its current high levels of debt, could weather even a gradual increase in the Bank Rate and avoid falling back into recession is uncertain. The current crisis in the Ukraine adds a new element of risk to the EMEA forecast, with a serious deterioration in the investment climate in Russia; IHS has reduced the forecast real GDP growth in Russia further to 0.5% in 2014; but currently forecasts it to recover to 1.7% in 2015 and 2.5% in 2015. The outlook in the United States remains stronger than in Europe, as its economy has performed much better over the last couple of years and is forecast to do so to 2017. GDP growth rate for the United States is now estimated as 2.6% for 2012 (following revision of historical data) but only 2.0% in 2013. However it is currently forecast to grow more strongly in 2014 and 2015, by 2.2% and 3.1% respectively. The short-term forecast has been reduced following a hard winter and a weak first quarter. On the whole, recent news on the US economy has been mildly positive: Moderate job growth, along with rising asset values, is helping to drive increased spending; retail sales and capital goods orders are rising, but housing is challenged by declining affordability, tight credit and rising construction costs. Export markets are improving, and the effects of unconventional gas and oil boom are feeding into the general economy. The pace of capital spending is increasing, but the rate of growth is forecast to be slower than in previous cyclical recovery periods. Replacement of the federal spending sequester (which depressed economic activity somewhat in 2013) by a new political agreement in the US Congress is expected to help both confidence and economic activity. There continues to be a taper down in securities purchases by the Federal Reserve, with current expectations of their ending around the end of 2014. However, central interest rates are considered likely to remain historically low for some while yet, as inflation is projected to remain low in the short term and unemployment is still relatively high. IHS anticipates that the federal funds rate will begin to rise in September 2015 to reach a long-term equilibrium of 4.0% in mid-2017. In Brazil, real GDP is estimated to have grown only 1.0% in 2012, but 2.3% in 2013. It is currently forecast to grow only 1.5% in 2014; but recover to 2.5% in 2015, supported by a recovery in capital goods investment and from exports rebounding. Investment might be vulnerable to tapering in the United States of government bond purchases, as borrowing costs will rise as a consequence. In 2011, Japan endured its third recession since 2008, as GDP shrank throughout the final three quarters. Japan’s economy has been struggling, in part, with disappointing exports as the world economy continued to falter. Exports to China and Europe were particularly bad, with growth in China cooling off and much of Europe still in recession. Growth in GDP in Japan in 2012 and 2013 is now estimated to be 1.4% and 1.5% respectively. Real GDP is currently predicted to grow by 1.4% in 2014 and by 1.3% in 2015; a weaker yen will help exports, though increases in sales tax will restrain consumer spending. There remain concerns over the sustainability of the pickup over the medium term. Forecast real GDP growth in China is forecast for the next few years to be around 7.5% each year. Although high by global standards, this is considerably lower than in the years from 2007 to 2011. China’s leadership has singled out financial stability, rather than short-term growth, as the most important objective, with only moderate stimulus applied. China’s economy is not yet on solid ground with very high local government debt and vulnerabilities in banking and real estate. China’s debt to GDP ratio has doubled over the last seven years; there remains a risk of a collapse of shadow banks. On the other hand, a fall of real GDP growth substantially below 7% would have serious repercussions on employment in an increasingly urban population. The focus of Chinese policy is shifting to a degree from industrial production to consumer infrastructure and domestic demand, consistent with maintaining financial stability. For the rest of the world, this will support the exports of some industries and countries, though there is predicted to be some cooling in demand for raw materials, say from Australia. Exports from China are expected to remain vulnerable to swings in demand for some time to come. Demand from a still-struggling Europe is shaky, and to a much lesser extent the same can be said for demand from the United States.

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Recently, there has been quickening growth in industrial production, exports of merchandise, and real retail sales. Overall, China’s real GDP grew 7.7% in 2012 and is estimated to have grown 7.7% again in 2013. Growth is currently predicted to be stable at 7.3% in 2014 and 7.1% in 2015, slightly lower the recently forecast. The economic outlook for the world is currently for continued, albeit only gradual, improvement, with upside risks to the shortterm forecast outweighing downside ones, although no region is without important vulnerabilities over the medium term. Many of the larger developed economies still have the conflicting aims of trying to grow their way out of the recession whilst at the same time trying to reduce their enormous debts. Improvement in the economy of the United States is balanced by continuing problems in Europe. With strong interconnections between the economies of the different regions, forecast growth in both advanced and developing economies remains vulnerable in the medium term. With the reduction in the stimulus measure of government bond purchases in the United States, currencies and investment in some developing economies, such as Turkey, Argentina, India, and Indonesia have come under pressure; so the short and medium term growth of these economies now looks weaker. In the United States and Japan, there are considerable risks associated with the continuing need to develop and execute policies of fiscal consolidation to reduce debt over the medium term, without choking off recovery and growth in the short term. Also, globally, the risks in the financial sector that triggered the last recession have largely still to be addressed; the impact of a return to higher central government interest rates may leave many consumers with dangerously high levels of debt, increasing risk again to banks. Last, a continuing increase in economic inequality in the populations of developed economies is causing many to doubt if strong recovery to historical growth rates is achievable even over the medium and long term.

2.2 General trends in the global low-voltage motor market Low voltage (LV) motors have become the most common piece of electrical equipment in the factory automation environment, and are often referred to as the essential “workhorse” needed to drive mechanical processes. This section provides a discussion of the key factors influencing the world market for LV motors, including an analysis of key economic and non-economic trends. This information is provided in order to present the reader with the most significant issues currently influencing this market, and to highlight the issues and regulatory developments that will impact the market’s performance throughout the forecast period.

2.2.1 Low-voltage motors market v. the total motors market The industrial motors market comprises a wide variety of LV motor types, including traditional AC induction asynchronous motors with designated efficiency classes IE1, IE2, IE3, and synchronous IE4 permanent magnet motors, DC motors, medium voltage (MV) motors, servo and stepper motors, fractional horsepower (FHP) motors, and others. The LV motor market is the only motor market that is governed by energy efficiency legislation in each of three regions. However, a precedent will be set in 2015 energy efficiency regulations are implemented for the FHP motor market in the US. Fractional horsepower (FHP) motors are considered to include power ratings below 0.75kW/1HP. Please refer to the IHS report The World Market for Fractional Horsepower Motors – 2014 Edition, which publishes in November of 2014. IHS estimates that the global market for integral horsepower (IHP) LV motors was worth $15,595.3 million in 2013, with 49,799 million units shipped, representing a 6.6% growth in revenues and a 3.6% growth in units compared to 2012. From a revenue growth perspective, the LV motors market is expected to outperform the total industrial motors market during the forecast period. Barring another global recession, expected high revenue growth is primarily attributed to the impact of regional motor efficiency legislations, which are expected to significantly impact the market’s product mix through 2018. The ongoing transitions in each region are focused upon requiring higher efficiency LV motors of higher cost be sold from a certain date onward, as mandated by official government regulations.

2.2.2 Understanding the global low-voltage motor market New LV motor revenues depend upon two factors: continual replacement of the installed LV motor base (brownfield), and from construction of new manufacturing facilities (greenfield). This section discusses the key issues affecting the market for LV motors identified from interviews with major global and regional LV motor manufacturers, OEMs, machine builders and endusers. July 2014

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The ongoing effect of regional government motor efficiency legislation Table 2.0 see below When analyzing and forecasting how the global LV motors market will evolve over time, it is of paramount importance to understand and consider the heavy influence of regional government legislation that mandates newly purchased and installed IHP LV motors have a certain efficiency rating. In the late 1990s when the first energy efficiency regulations were implemented in the US, marked a significant change from when individual manufacturers incentivized motor efficiency improvements through marketing and advertisement as a way to gain a competitive advantage in the market place. However, with the onset of government mandated energy efficiency regulations, now in each of the three regions covered in this report, the playing field of LV motor efficiency has been somewhat leveled. The end result of the energy efficiency regulations is as follows: All manufactures may continue to use proprietary designs for their LV motors, but all LV motors produced, regardless of manufacturer, must meet the same efficiency ratings as outlined in the regulations. In 2010, the US Department of Energy (US DOE) extended the IHP LV motor efficiency standards established by the National Electrical Manufacturers Association (NEMA) to fractional horsepower motors (FHP). Fractional horsepower motors are 500HP) Total Market

-2%

Source: IHS July 2014

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Table 2.13

The World Market for Low Voltage Motors By Enclosure Type

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

CAGR 09 - 18

9,528.9 35,989.9 265

10,881.2 38,997.0 279

12,111.5 41,288.8 293

12,812.2 42,810.5 299

13,678.2 44,365.5 308

14,817.5 46,205.4 321

16,342.3 48,599.4 336

17,940.3 51,065.0 351

19,961.5 53,844.3 371

22,398.6 56,902.0 394

10.0% 5.2% 4.5%

TEFC: non-hazardous Revenues ($M) 8,799.8 Units (k) 34,296.9 ASP ($) 257

9,977.3 37,026.7 269

11,028.8 39,239.7 281

11,498.7 40,476.2 284

12,238.2 41,997.2 291

13,303.4 43,799.5 304

14,717.9 46,122.0 319

16,183.6 48,461.9 334

18,049.1 51,109.4 353

20,341.0 54,104.9 376

9.8% 5.2% 4.3%

729.1 1,693.0 431

903.9 1,970.3 459

1,082.8 2,049.2 528

1,313.5 2,334.3 563

1,440.0 2,368.2 608

1,514.1 2,405.9 629

1,624.4 2,477.4 656

1,756.6 2,603.1 675

1,912.4 2,734.8 699

2,057.6 2,797.1 736

12.2% 5.7% 6.1%

69.3 237.5 292

80.0 247.2 324

87.4 254.6 343

91.0 252.1 361

90.7 239.8 378

94.0 241.7 389

98.8 246.0 401

108.2 268.0 404

119.4 287.9 415

132.7 309.8 428

7.5% 3.0% 4.3%

TENV: non-hazardous Revenues ($M) 58.5 Units (k) 207.2 ASP ($) 283

67.7 216.2 313

72.7 221.1 329

75.8 218.5 347

74.5 205.5 363

76.9 206.7 372

80.6 209.8 384

88.6 229.7 386

98.0 247.4 396

109.8 267.7 410

7.2% 2.9% 4.2%

10.8 30.3 357

12.3 31.0 398

14.7 33.5 439

15.2 33.6 452

16.2 34.3 472

17.1 35.0 489

18.2 36.2 503

19.6 38.3 512

21.4 40.5 527

22.9 42.0 545

8.7% 3.7% 4.8%

ODP: non-hazardous Revenues ($M) 783.9 Units (k) 3,319.0 ASP ($) 236

917.4 3,592.0 255

980.0 3,642.2 269

1,053.2 3,660.0 288

1,129.8 3,786.2 298

1,243.0 3,979.9 312

1,392.1 4,222.6 330

1,562.7 4,495.3 348

1,729.0 4,753.8 364

1,920.6 5,044.4 381

10.5% 4.8% 5.4%

Other: non-hazardous Revenues ($M) 530.6 Units (k) 1,230.3 ASP ($) 431

593.3 1,297.2 457

656.8 1,357.7 484

672.2 1,366.4 492

696.6 1,407.0 495

742.3 1,443.6 514

801.3 1,489.8 538

845.3 1,528.5 553

912.7 1,574.4 580

989.2 1,624.6 609

7.2% 3.1% 3.9%

TEFC: Total Revenues ($M) Units (k) ASP ($)

TEFC: hazardous Revenues ($M) Units (k) ASP ($) TENV: Total Revenues ($M) Units (k) ASP ($)

TENV: hazardous Revenues ($M) Units (k) ASP ($)

Revenues ($M) 10,912.8 Annua l Growth

12,471.9 13,835.8 14,628.7 14.3% 10.9% 5.7%

15,595.3 16,896.8 18,634.5 6.6% 8.3% 10.3%

20,456.5 22,722.5 25,441.0 9.8% 11.1% 12.0%

9.9%

Units (k) 40,776.6 Annua l Growth

44,133.4 46,543.4 48,089.0 8.2% 5.5% 3.3%

49,798.5 51,870.6 54,557.8 3.6% 4.2% 5.2%

57,356.8 60,460.4 63,880.7 5.1% 5.4% 5.7%

5.1%

Source: IHS

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Figure 2.22

The World Market for Low Voltage Motors By Enclosure Type - Market Breakdown and Growth

Revenues ($M)

10,000

14%

2013 Revenues

12%

Growth 2014

10%

Growth 2015

8%

5,000

6%

Growth (%)

15,000

4%

0

2%

Source: IHS

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Figure 2.23

The World Market for Low Voltage Motors By Enclosure Type - Revenue Growth Profiles - 2010 to 2018 26%

TEFC: nonhazardous

Growth (%)

22%

TEFC: hazardous

18%

TENV: nonhazardous

14%

TENV: hazardous

10%

ODP: nonhazardous

6%

Other: nonhazardous

2%

Total Market

-2%

2010

2011

2012

2013

2014

2015

Source: IHS July 2014

2016

2017

2018

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Table 2.14

The World Market for Low Voltage Motors Shares by Revenue

Company Name

2013 Share

1.

ABB

13.0%

2

Siemens

10.0%

3

WEG

7.5%

4

Regal Beloit

3.0%

5.

Leroy Somer

2.5%

6.

TECO

2.0%

7.

Toshiba

2.0%

Others

60.0%

Note 1: The market in 2013 was estimated to be worth $15,595.3 million. Note 2: Market shares were rounded to the nearest 0.5% Note 3: Regal Beloit's market share includes CEMP (Italy).

Source: IHS

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Chapter Three

The EMEA market for low-voltage motors  Low revenue growth in the region’s low-voltage motor market continues in 2013  60% revenue growth in Eurozone for IE2  Robust revenue growth for IE3 expected in 2017 & 2018  New EU MEPS regulations in 2014 intended to close regulatory loopholes

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3.0 Introduction This chapter presents and analyzes consolidated market statistics for the EMEA market for industrial low voltage integral horsepower motors with power ratings at or above 0.75kW/1HP. The statistics presented in this chapter are provide market sizes in terms of both revenues in millions of US dollars (represented as $M), and unit shipments in thousands (represented as ‘k’ units). The base year for the analyses is 2013, with forecasts from 2014 through 2018. Historical market sizes are provided for 2009 through 2012, for reference.

3.1 The EMEA market for low-voltage motors The Europe, Middle East and Africa (EMEA) market for LV motors grew by an estimated 5.1% in terms of revenues, and was estimated to be worth $5,007.8 million in 2013 with over 13 million units shipped. The region had rebounded well from the global recession, as evident by posting 9.0% revenue growth in 2011. However, the rebound was curtailed somewhat in 2012 with the onset of economic troubles in Western Europe, which led to modest 5.9% growth in 2012. Two major events were occurring simultaneously in the European market that had, and will continue to have a major effect in the Eurozone region’s LV motor market for the short term. These two events are: 

The Eurozone‘s sovereign debt crisis, which began to escalate in late 2011 and early 2012



The transition to IE2 class LV motors in the EU states occurring in the middle of the year, at June 16th, 2011

Reported data for 2013 shows more transition progress toward IE2, with less IE1 product being sold. However, revenues from IE1 motors still garnered a significant share of the region’s market. This dynamic is taking into account that IE1 motors are still allowed to be sold into the Middle East and Africa, countries with no energy efficiency regulations. European LV motor manufacturers reported this fear to be true as LV motor sales into the Eurozone were significantly less than anticipated. Due to the economic situation, the organic demand for LV motors in 2012 was much lower than 2011, with inorganic revenue growth expected from the sale of more efficient and more expensive IE2 motors failing to materialize in a significant way. June 2013 marked the second full year of the transition to IE2 class LV motors in the EU states. It was thought that the efficiency class transition from IE1 LV motors to IE2 would ignite inorganic revenue growth on top of organic revenue growth in a region still bouncing back from the global recession. It was learned in late 2012 that the growing Eurozone crisis, on the heels of the recovery, had posed a new threat to the region’s market, and had significantly delayed the transition to IE2. Because of the lower cost, customers still ordered mostly IE1 motors beyond the official start of the transition date, forcing manufacturers to supply these motors and delaying their collective ability to transform their cost structure and manufacturing processes to produce IE2 motors. Via interviews with Tier 1, Tier 2 and Tier 3 manufacturers in the region, it was discovered that many IE1 were produced and stockpiled beginning in early 2011, anticipating the continued demand for IE1 motors for several years beyond the official transition starting date. This has caused a dynamic in which IE1 motors are still being legally sold into the Eurozone in 2012 and even in 2013, which has greatly slowed the transition to IE2 in this region. Most LV motor manufacturers reported that IE2 sales began to increase only modestly by the end of 2011, with IE2 class LV motor sales for the entire year of 2011 and 2012 reported to be well below expectations. The lingering effects of the global recession and the onset of the Eurozone sovereign debt crisis resulted in several countries in the region facing insolvency in early 2011. The insolvency issues in Western Europe caused the EU to act swiftly with bailout measures for countries including Greece, Italy, Spain, Portugal, and Ireland. IHS had expected the debt crisis in Western Europe to carry over into 2012 and partly into 2013 as well, and to negatively affect the LV motor market in the region.

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Concerning the rate of transition to IE2 class motors in the EU states, IHS realizes that it is difficult to assess how quickly the transition will occur, given only limited visibility into the quantity of installed base of motors that need to be replaced in any given year, regardless and independent of economic circumstances. Additionally, it is difficult to quantify with accuracy at what stage of a LV motor’s lifecycle any given motor in the installed base may be in. Considering the lifespan of a LV motor can be anywhere from three to twenty years, depending on usage factors, it is assumed that some facilities owners may have purchased IE1 class motors many years prior to any legislated transitions, and may not purchase replacement IE2 or IE3 motors during the forecast period. As the efficiency transition from IE1 to IE2 continues to occur in the Eurozone states, the inorganic revenue growth dynamic is expected to intensify in coming years. Modest growth in the region’s LV motor market is expected to return to the region in 2014 as IHS has forecast 8.4% revenue growth with a 4.1% growth in units. Organic demand for LV motors (independent of the influence of a mandated shift to more expensive LV motors) is expected to return to historical levels beginning in 2016. In 2015, a legislative shift will again play a positive role in LV motor revenue growth in the EU states, with more expensive IE3 class LV motors above 7.5kW being sold into the EU market. Low voltage motors in power ranges 7.5kW to 375kW (10HP to 504HP) are in the minority share of unit shipments in any given year and therefore will have a minimal influence on the region’s revenue growth during that year. The EU legislation includes a unique provision that is expected to significantly influence the transition to IE3 class motors. The provision is unique because it does not exist in North American energy efficiency regulations. In 2015 and 2017, the provision allows for efficiency ratings equivalent to IE3 by fitting an IE2 LV motor with a VFD. Considering that Europe has some of the highest VFD penetration rates in the world, this provision is expected to result in a sharp increase in VFD sales during the forecast period and beyond. It is expected that a significant number of European OEMs and end-users will favor purchasing less expensive IE2 class LV motors fitted with a VFD, rather than a more expensive IE3 LV motor. Fitting an IE3 LV motor with a drive does increase the efficiency of the motor substantially, however, the overall gain in efficiency in doing this is still less than the overall efficiency gains made by an IE2+VFD pairing, while still being less expensive than an IE3+VFD pairing. The added benefit of the IE2+VFD pairing being preferred over an IE3 LV motor for OEMs is that the amount of form factor redesign for a particular machine will be minimized, which saves on production costs. The European market has traditionally favored decentralized VFD system topographies, often using VFDs integrated directly onto the motor itself. In contrast, the North American market favors a centralized VFD system topography. It is important to recognize that IE1 motor sales will remain viable if not strong in the non-EU states, namely parts of Central and Eastern Europe, the Russian Federation and CIS, and the Middle East and Africa were no motor efficiency legislation exists. IHS has assumed that these regional motor markets will remain viable markets for suppliers of IE1 efficiency class motors for the foreseeable future. It is important to note that the Russian Federation and CIS uses the GOST standard. The GOST standard is based on metric IEC-centric frame sizes ranging from 63 to 315 and larger. GOST motors have shorter shaft sizes with wider and taller form factors. In order to estimate accurate revenue and units totals for the EMEA region, data for GOST-standard motors has been included in IEC frame size totals. However, the GOST standard motors are not officially regulated by the IEC standards body. GOST standard motors are typically of lower efficiency, and are equivalent to EFF3 motors that are well below current IE1 efficiency levels. It is interesting to note that enforcement of licensure exists for manufacturers of IE3/NEMA Premium LV motors to be sold into the US, as their products are subject to periodic testing in order to maintain licensure as a certified IE3/NEMA Premium motor. Currently, no such process is in place to enforce IE2 LV motor licensure in the EU states. In addition, a curious loophole in the ErP legislation exists for manufacturers. They can still produce IE1 motors to be sold into the European Union, but only on the condition that they are used for non-continuous duty applications or will operate in environments where special modifications to the LV motor are needed. Critics of the legislation argue that this condition will be difficult to assess and even more difficult to enforce. As was discussed in the trends section of Chapter 2, some manufacturers have had to address a high number of orders in 2010, 2011 and 2012 for slightly modified IE1 LV motors. In essence, exemption loopholes in the EU efficiency legislation were being noticeably exploited in order to avoid having to purchase a more expensive IE2 class LV motor.

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However, new regulations in the form of EU 4/2014 that were introduced on July 27 th, 2014 are intended to amend the unintended loopholes in the EU MEPS. Please refer to Chapter 2, “Evolving Motor Efficiency Legislation in the European Union” in Section 2.4.1. Systems efficiency legislation is gaining prominence in the EU as pre-cursors of systems efficiency regulations have been established. In 2013, the EU implemented efficiency regulation 641/2009 for circulator pumps, and in 2015 this will be extended to water and wastewater pumps. Legislation passed in the EU in early 2014 under lot 11, EU 327/2011 derived from the same Eco -design Directive is intended to govern the efficiency of industrial fans. The second stage of these regulations is to be implemented starting in 2017.

3.1.1 The EMEA market for low-voltage motors by efficiency class Table 3.1 & Figures 3.1, 3.2, and 3.3 Due to the motor efficiency legislation implemented in June 2011 in addition to efficiency legislation coming in 2015 and 2017, the product mix in the EMEA market for LV motors market will experience a significant shift away from IE1 class LV motors, primarily towards IE2. In 2013, IE1 class LV motors’ share decreased to 43% of the region’s market, but continued to make up the largest portion. During the year, IE2 class LV motors gained significant traction, with IE2 revenues increasing dramatically from 27% share in 2012, to 41% in 2013. IE3 class LV motor revenues in 2013 accounted for 1.5% of revenues and just over 1% of units. IHS estimates that by the end of 2018, IE2 class LV motors will account for the largest portion of the market growing to an estimated 53% share. In contrast, the IE1 class LV motor segment is expected to drop to 22% of revenues in 2018, with most of these motors thought to be sold into countries with no efficiency regulations. Surprisingly, the IE1 market will still remain the second largest LV motor segment in the region in terms of revenues. By 2018, IE3 motors are expected to grow to 12% share of the region’s market, with the majority of IE3 motors expected to be sold into Western Europe. The region’s IE4 motor market is growing steadily relative to economic circumstances, and is expected to produce a revenue CAGR of 22.6% during the forecast period. This motor market accounted for 1.2% of all LV motor revenues in the region and 0.3% of units in 2013. The majority of IE4 class LV motors sold during the year were sold into the German, French and Italian LV motor markets as these countries are the domestic markets of the major IE4 manufacturers. However, as was discussed in Chapter 2, end-equipment manufacturers such as KSB, Bauer Gear Motor and Nord have entered the IE4 arena in Europe. There are many small IE4 manufacturers of elevators and lifts, pumps and fans in the region that produce their own proprietary design for an IE4 motors sold into the captive market. Notable motor manufacturers of IE4 LV motors sold into the EMEA region include ABB, Leroy Somer, ABM, SEW-Eurodrive, Marathon Electric, Yaskawa and Lafert Group. However, there are many small LV motor manufacturers that supply IE4 motors for niche markets, including ship propulsion, steel rolling mills and elevators and escalators. In early 2012, ABB officially launched its proprietary design of an IE4 class LV motor based on its proprietary synchronous reluctance (SynRM™) technology that does not use any magnets. However, shipments of this type of motor are thought to be in the hundreds of units in 2013. ABB’s acquisition Baldor sells more of its neodymium-based IE4 motors into Europe than the SynRM™ product. As was mentioned in Chapter 2, ABB recently unveiled its IE5 SynRM™ that has additional ferrite magnets on the rotor in order to achieve a theoretical IE5 rating. Brazil’s WEG also released an IE5 neodymium based motor at the same time as ABB. Early in 2013, The International Electrochemical Commission (IEC) published the standard IEC 60034-30-1:2014 titled Rotating electrical machines – Part 30-1: Efficiency classes of line operated AC motors which defines IE4 Super Premium Efficiency Motors and replaces the 2008 edition of IEC 60034-30. The IE5 rating has not been officially recognized or defined by the IEC. IHS believes that it will be quite some years before IE5 motors ship in the hundreds of units. The majority of IE4 LV motors range from 1-5HP and are primarily used for light motion, continuous duty (S1) applications such as compressors, fans, and pumps. European manufacturers interviewed for this report revealed that IE4 LV motors have been part of their plans for years, however, these products remain in research and development stages. French-based Leroy Somer and Italian-based Lafert Group have been marketing their respective IE4 motors as ‘IE4 Super Premium Efficiency’ motors for several years in anticipation of the official specifications by The International Electrochemical Commission (IEC).

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Despite the neodymium magnet crisis in 2011 that had IE4 motor manufacturers worried about the future efficacy of their newly IE4 launched product lines, IHS predicts that the IE4 class LV motor market will grow strongly in Western Europe, with neodymium-based motors holding majority share in this segment. Synchronous reluctance motors, including ABB’s proprietary version, and switched reluctance LV motors, as well as IE4 LV motors using new ferrite technologies, are expected to compete with neodymium-based IE4 motors.

3.1.2 The EMEA market for low-voltage motors by region Tables 3.2a and 3.2b & Figures 3.4, 3.5a and 3.5b

Austria & Switzerland An economic recovery emerged during the second half of 2013 in Austria, and is expected to continue in 2014. Austrian GDP growth dropped from 2.9% in 2011 to 0.7% in 2012 to 0.3% in 2013. IHS expects GDP growth to rebound to 1.8% in 2014 and 2.0% in 2015. One reason for this projected growth is Austria’s natural resources, which include iron ore, oil, timber, magnesite, lead, coal, lignite, copper, paper, and hydropower. Austria is a highly-developed industrial country in which its secondary sector, industrial production (including construction, energy, and mining), still holds an above-average proportion of economic activity when compared to other European countries. Austria is a significant player in both finished vehicle manufacturing and component supply. More than 300 companies are active in the automotive sector, with major investors including BMW, Chrysler, and General Motors. Chemicals, biotech, and pharmaceuticals are other strong export sectors for the country, with 90% of production exported. Around 450 companies are estimated to be established in the area, most significantly Henkel, Lenzing, and Baxter Immuno. Switzerland remains very stable politically and possesses one of the world’s most robust economies. The Swiss economy has also proved resilient to the current Eurozone debt crisis, despite its structurally heavy export orientation and small domestic market. The IHS December interim forecast estimated that annual Swiss GDP growth picked up from 1.0% in 2012 to 1.9% in 2013 and projected 2.0% growth in 2014. Switzerland has few mineral resources worth exploiting other than granite, limestone, and other aggregates for construction. The numerous rivers and water outlets from the Swiss Alps nevertheless offer a very cheap and clean energy supply that accounts for nearly 60% of the country's electricity requirements. Austria & Switzerland’s LV motor market experienced modest revenue growth in 2013 of 4.4%. This market is estimated to have been worth $143 million during the year, with 320k units sold. IHS forecasts Austria & Switzerland will perform slightly belo w the region’s market average of 9.1% at a CAGR of 9.0% for revenues, and 5.7% for units during the forecast period.

Benelux (Belgium, The Netherlands, Luxembourg) The Belgium economy has deteriorated markedly since 2009 because of the global economic downturn. IHS expects this to remain the case in the near term and for the economy to stagnate. After contracting 0.2% in 2012, the Belgian economy grew only 0.2% in 2013 and is expected to grow 1.4% in 2014. Belgian economic activity is anticipated to recover in 2014, but the pace is likely to be sluggish. Within the industrial sector, the focus is likely to shift further to the production of higher-value-added goods, as the metals, engineering and chemicals sectors face increased competition from East European and other developing countries. Belgium has a significant mineral processing sector and almost entirely uses imported raw materials because its own natural resources are very limited. The country produces marble, as well as industrial minerals such as limestone, sand, and gravel. It has coal deposits, but the last coal mines were unprofitable and consequently shut down. The fiscal position of The Netherlands presents a low-risk environment for investors. However, the country has deteriorated since 2009 due to the economic downturn, and public finances remain under pressure. As anticipated by IHS, the economy grew in the third quarter of 2013 for the first time since the second quarter of 2012. Nevertheless, economic activity is expected to remain weak in the near term, as muted private consumption and low business investments will continue to keep activity under pressure. IHS estimates that GDP contracted 1.0% in 2013 and forecasts a marginal growth of 0.4% for 2014. The Netherlands only major mineral natural resource is natural gas, with some small deposits of crude petroleum.

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Although the economy in Luxembourg has been growing at a faster pace than the Eurozone average for decades, growth slowed to about 0.5% during 2012–13 as the Eurozone debt crisis affected the economy. IHS predicted an uptick in GDP growth from a slight contraction of -0.2% in 2012 to 1.0% in 2013. GDP growth is expected to be 2.2% in 2014. Luxembourg is not an oil producer and has no refineries. It produces only a small amount of hydroelectricity, and can meet few of its domestic energy needs. The Luxembourg-Lorraine iron-mining basin is now depleted but the steel industry continues using iron imported from France. The country's grape growers are beginning to establish themselves as major suppliers of wine. The Benelux region’s motor market experienced lackluster revenue growth in 2013 of 3.5%. This market is estimated to have been worth $229 million during the year, with 514k units sold. IHS forecasts the Benelux region will perform below the region’s market average at a CAGR of 8.4% for revenues, and 4.8% for units during the forecast period.

Spain & Portugal The economic and financial risks facing Spain remain acute as the country continues to be enveloped by a profound financial crisis. Spain’s medium- and long-term bond issuance plans met its 2013 goal. However, the Spanish economy is still gripped by recession, with the government confirming that it needs until 2016 to lower its public sector budget deficit. It is increasingly unlikely that Spain, like Ireland, will approach the European Stability Mechanism (ESM) as a stressed country to apply for a precautionary credit line to ignite the ECB bond-buying program. The real GDP contraction forecast for 2014 has been lowered from 0.2% to 0.1% because of signs of stabilization in late 2013; however, the economy is expected to remain performing poorly well into the medium term, with real GDP growth unlikely to exceed 1.5% until 2018. Spain is the world's largest producer of granite, the second-largest exporter of marble and also has small deposits of gold, silver, and copper. A large area of the country is forested for timber. The country has no major oil deposits and imports all oil and natural gas. Coal is the one natural fuel stock in the country, but is not competitive on the international market. Spain is Europe's third-largest wine producer and second-largest olive oil producer. Principal industrial sectors include automobiles, energy oil, chemicals, and food processing. The construction sector is now under considerable pressure after a prolonged period of high activity before the global recession. Spain is one of the few nations in Europe to have a mining sector of any importance. Iron ore, mercury, potash, pyrites, and some uranium are all profitably mined. Economic growth in Portugal was weak before the crisis and is still facing several risks stemming from the country’s weak fiscal position. Portugal currently has one of the lowest productivity rates within the EU, and with global competition in traditional manufacturing sectors becoming even fiercer, Portugal will no longer be able to rely on its historically low nominal labor costs to attract investment. The traditionally strong textile and footwear sector has been hit especially hard, particularly by increasing competition from Asian and East European countries. After three consecutive years of contraction, GDP growth is expected to become positive in 2014 at 0.3%. One-third of Portugal is forested, providing substantial lumber resources. Portugal produces half of the world's cork, but the popularity of cork as a bottle stopper is declining. Deposits of iron ore, gold, tungsten, and copper are relatively numerous but geographically dispersed, meaning that economies of scale in mining are limited, despite excellent infrastructure. There are also a handful of scarce coal and gas deposits onshore and offshore. Portugal's Atlantic Ocean coastline and sunny climate provide the potential to harness alternative energy such as solar and wave power. Some major investments in alternative energy have recently been made in hopes that Portugal will become a leader in this field. After two years of contraction at 7.5% and 8.1% respectively, Spain & Portugal’s LV motor market posted positive growth of 1.0% in 2013. The Spanish & Portuguese LV motor market is still recovering from the global recession, with the industrial sectors in these countries still greatly diminished. This market is estimated to have been worth $204 million during the year, with 613k units sold. IHS forecasts Spain & Portugal will perform well-below below the region’s market average at a CAGR of 4.8% for revenues, and 3.2% for units during the forecast period.

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France France has lost significant external competitiveness since entering the Eurozone. French banks are also exposed to the Spanish and, particularly, Italian economies, and would be significantly hit if the economic situations in these countries deteriorate. The government refrained from introducing significant spending cuts, as was the case in other Eurozone countries, resulting in a tightened fiscal policy at the start of 2013. Further fiscal adjustment measures have already been announced for 2014. VAT rates are expected to increase. IHS expects economic conditions to remain challenging in the country over the medium term. Tighter fiscal policy, a dysfunctional labor market, and shrinking profit margins are projected to keep output growth under pressure. The IHS December 2013 forecast sees GDP rising just 0.5% in 2014, although this is an improvement compared to the growth rates of 0.0% in 2012 and 0.2% in 2013. Following the United States, France is the second-largest agricultural producer in the world and accounts for one-third of EU agricultural land, which supports the country's farming sector as well as the timber industry. Forest area in France has increased significantly and continues to grow by about 74,000 hectares each year, allowing yields in annual harvests of around 52 million cubic meters of timber. The large volume of agricultural output also allows for a substantial food processing industry. France is well known internationally for its fine wines, cheeses, and other food delicacies. France boasts two of the world's most important vehicle producers in Renault and PSA Peugeot-Citroën, companies that are vital to the French economy and central to the health of the nation's exports. In addition, France provides the world with some of its most important components suppliers, including tire maker Michelin and Valeo. France excels in the production of a number of engineering disciplines, notably nuclear engineering, tunnel boring, and bar turning. Mineral resource exploitation is not a significant industry as deposits are not rich and much of the commercially exploitable coal resources have been exhausted. France is a significant producer of bauxite and uranium products; however, these are primarily sourced from its former colonies for refining in France. The French LV motor market experienced a slight setback in growth of 7.0% in 2013 after posting growth of 7.6% in 2012. The French market is estimated to have been worth $336 million in 2013, with 825k units sold. France is one of the few nations in Europe that is heavily dependent on nuclear power, as it sells a large amount of the energy it produces to its immediate EU neighbors. Growth rates for this market are expected to return to historical rates towards the end of the forecast period as the region’s economy is expected to improve. With a CAGR of 9.2% for revenues and 4.9% for units forecast during the forecast period, the French LV motor market is predicted to perform slightly above the region’s average.

Germany The main risk for the German economy in 2014 remains the Eurozone debt crisis and related concerns about the solvency of some Eurozone countries following the stabilization observed since the second quarter of 2013. Various confidence-boosting events occurred in late 2012 and 2013 including the European Central Bank’s announcement of potentially unlimited government bond purchases, Germany’s ratification of the European Stability Mechanism Treaty, and new debt deals for Greece and Ireland, with Ireland exiting the bailout program toward the end of 2013. Political turbulences at various times during 2013 in Italy, Cyprus, and Portugal, along with temporarily rising European bond yields during third quarter of 2013, have demonstrated that the whole situation remains fragile. Leading indicators show marked rebounding since November 2012, resulting in IHS forecasts for GDP growth of 0.6% in 2013 and 1.8% for 2014. The mining industry plays a small role in the country's economy. However, Germany has estimated reserves of 6,708 million tons of coal despite the use of coal in electricity generation having declined to 24%. The country produces sizeable quantities of several minerals, including lignite, bituminous coal, iron ore, potash and salt. More than 85% of lignite mined is used to generate electricity; however, Germany has reduced lignite production and modernized its existing power stations, including building new ones. In May 2011, Chancellor Merkel announced that Germany would close all of its nuclear reactors by 2022. Germany is believed to be able to use renewables (primarily wind power) to replace most of the lost output from nuclear. Germany is the seventh-largest refiner of crude oil in the world, and the largest in Western Europe. The proportion of energy supply accounted for by oil has fallen from 34.7% in 2008 to 32% in 2010. Germany has considerable forestry resources. Water supply presents problems because of the constant needs placed on it by a major industrialized nation. Germany remains the economic juggernaut bolstering the EU economy with its massive machine builder/OEM sector.

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The German LV motor market experienced healthy growth of 9.0% in 2013 after posting growth of 8.6% in 2012. The German market is estimated to have been worth $1,159 million in 2013, with 2,601 units sold. Germany’s two consecutive years of steady growth, the highest in the region comparatively, could be a sign that the worst of the Eurozone debt crisis’ effect on the LV motor market in the Eurozone region is being overcome. With a CAGR of 10.8% for revenues and 5.9% for units forecast during the forecast period, the German LV motor market is predicted to perform significantly above the region’s average of 9.1%.

Italy Italy’s economic, fiscal, political, and financial risks remain acute. Recent economic data confirmed that the economy shrank for the seventh successive quarter up to Q1 of 2013. Tough austerity measures implemented in 2012 and 2013, tighter credit lines, and rising unemployment have resulted in Italy having little room for maneuvering. The country is still locked in a prolonged economic downturn. Deteriorating fiscal metrics contributed to the public debt ratio climbing to 127% of GDP in 2012. However, the latest forward-looking data are still short of the levels required to support a solid and sustainable upturn in the Italian business cycle, and continue to point to further declines in domestic spending in early 2014. Overall, GDP growth shrank to 1.9% in 2013 and is expected to drop further to 0.3% in 2014. Italy's past strengths are now responsible for heralding a period of very weak growth. IHS expects the economy to stabilize in the first half of 2014, but the recovery is likely to be labored. The Italian economy has developed strong specializations in the production of textiles, clothing and footwear, leather goods, furniture, and machine tools. These specializations, however, coupled with the high concentration of small enterprises in the traditional textiles and footwear sectors, have made Italy vulnerable to strong price competition from low-cost producers in China, India, and Eastern Europe. Mining contributes only a small portion to the country's economy; however, production in some minerals is considerable. Mineral resources include barites, lignite, pyrites, fluorspar, sulfur, and mercury. Italy is the world's largest producer of pumice and related materials, and is also the largest producer of feldspar, which is used in the production of ceramics. The largest sector of industrial output is within machinery and metals production. However, there are serious concerns about the country losing ground in the hi-tech sector as lower-priced foreign competitors in the industrial machinery sector undercut Italian producers. The Italian LV motor market grew at a modest 4.0% in 2013 after poor growth of 1.7% in 2012. As mentioned above, Italy is in a prolonged economic recession. The Italian LV motor market is still recovering from the global recession, and the recovery has been further compounded by the austerity measures resulting from the Eurozone debt crisis (as is the case with most countries in the EU). The Italian market is estimated to have been worth $416 million in 2013, with 1,012k units sold. IHS expects growth in the Italian market to be constrained in the medium term, with growth rates returning to healthy historical levels towards the end of the forecast period. With a projected CAGR of 8.1% for revenues and 4.2% for units shipped over the forecast period, the Italian LV motor market is predicted to perform below the region’s average of 9.1% for revenues.

United Kingdom & Ireland The UK economy suffered during the global recession, experiencing five quarters of deep contraction before finally experiencing growth in the third quarter of 2009. Until the second quarter of 2013, the United Kingdom experienced only gradual overall recovery. Industrial activity is no longer as dominant as it once was, but the country remains a major exporter of goods. Around half of the countries it trades with are Eurozone member countries. The country now faces an extended period of substantial fiscal tightening involving major spending cuts and, to a lesser extent, tax hikes. Other important medium-term issues include the needs for infrastructure investment and increasing productivity. The GDP growth forecast for 2014 has been edged up to 2.6% from 2.5% primarily because the economy performed better at the end of 2013 than expected. Ireland's economy experienced growth in the second quarter of 2013 after four consecutive quarters of contraction. IHS forecasts GDP rising by 1.8% in 2014. Improving domestic market conditions should provide a boost to private consumption and investments. At the same time, growth among Ireland’s key trade partners is expected to pick up in 2014, boosting their demand for Irish goods and services. The European Union–International Monetary Fund (IMF-EU) aid program should continue to help Ireland manage its downsizing of the commercial banks' balance sheets. Ireland left the IMF-EU program at the end of 2013 and returned to the financial markets for funding. The real risk for the government is another twist in the Eurozone debt crisis that would prevent the country from maintaining regular access to the market, forcing a withdrawal and a request for more official funds from the IMF-EU.

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The electronics sector has become the keystone of Ireland's new economy, with over 300 companies accounting for more than one-third of total exports. This has made Ireland one of the EU's major manufacturers. Ireland has rapidly become one of the largest exporters of pharmaceuticals and chemicals in the world. The natural resources of Ireland are zinc, lead, natural gas, petroleum, copper, dolomite, barite, limestone, gypsum, peat, and silver. Zinc and lead are the most industrious. Irish industries include fishing, forestry, machinery, mining, and livestock. Peat has been Ireland’s staple fuel for centuries and still provides about 12% of the nation's energy needs. Recently, Ireland has experimented with "new energy sources”, which include hydroelectric power, solar power, and wind power. The UK & Ireland LV motor market experienced low growth at 3.7% in 2013 after similar low growth of 4.0% in 2012. As mentioned above, the UK is in a period of fiscal tightening, which is predicted to limit economic expansion in the medium term. The UK & Ireland market is estimated to have been worth $152 million in 2013, with 371k units sold. Growth rates closer to historical levels are expected to return towards the end of the forecast period. With a projected CAGR of 8.4% for revenues and 4.3% for units shipped over the forecast period, the UK & Ireland LV motor market is predicted to perform below the region’s average of 9.1%.

The Nordic Countries (Denmark, Finland, Norway, Sweden) Denmark is a relatively low-risk, dynamic, and stable economy offering a secure and attractive environment for foreign investors. Being outside of the Eurozone, Denmark’s krone has recently been seen as a safe-haven currency while the Eurozone debt crisis continues. IHS expected real GDP to grow 0.4% in 2013. The economy is still projected to recover moderately in 2014, with GDP growing by around 1.7%. Denmark has both oil and natural gas reserves, and recent finds are helping to reduce dependency on petroleum imports. Crude oil production peaked during 2000-05, but has declined steadily to about half the amount of the peak levels by 2011. Denmark remains a net exporter of crude oil. Energy conservation efforts in the country are impressive and there has been a drive in recent years to convert coal stations to domestic natural gas. The Finnish economy has been slow to recover, while the Finnish industrial sector is going through major changes, compounded by its flagship national firm, Nokia, selling its handset business to Microsoft. Problems in several very important export sectors, such as telecommunications, paper, and metal output, are becoming increasingly clear. IHS estimated a GDP contraction of 0.7% for 2013. Domestic demand in particular is suppressed, as consumer confidence remains weak and unemployment is still high. Finland has no proven oil or natural reserves, so petroleum has to be imported. A pipeline transferring natural gas from Russian fields in the Barents Sea to Germany was completed in 2012. This pipeline passes through the Finnish Exclusive Economic Zone (EEZ) in the Baltic Sea, but none of the Baltic Sea states are connected to the pipeline, apart from Russia and Germany. The main metallic deposits are copper, nickel, zinc and chromium ore. Small quantities of gold, silver, mercury and selenium are also mined, as is coal. Overall, the mining industry is doing well and interest in exploration is increasing. Finnish and Swedish manufacturers supply about 80% of global underground mining equipment. Finland’s forestry industry, including paper and pulp production, continues to play a major role in the economy. The total installed wind farm capacity in Finland at the end of 2012 was 288MW, with approximately 163 turbines. A further 125 MW was planned for installation in 2013. The target is to reach 2,500MW of power output produced by wind power by 2020. Biomass is used intensively in the paper industry, and the share of biomass-produced energy is about 11% in Finland. Despite performing better than expected in the first half of 2012, the Norwegian economy faced significant challenges in late 2012 and 2013. The prospect of softer domestic demand across the Eurozone, triggered by recession creeping across the region, is a notable threat to Norwegian exports, output levels, and employment rates. GDP increased 0.7% in 2013. Norway is the world's seventh-largest crude oil exporter and the largest supplier of natural gas to Northwest Europe, but those positions are now declining steadily. Norway has modest amounts of iron ore, copper, zinc, and coal. Large deposits of chalk, dolomite, graphite, and limestone that can be used commercially can also be found in Norway, as the country has Europe's only molybdenum mine and its largest deposit of limonite. Norway remains a major shipbuilder despite strong competition from the Far East. The main imports into Norway include machinery, transport equipment, chemicals, clothing and accessories, iron, steel and metal ores. Norway generates large quantities of inexpensive hydroelectric power, harnessing the power of the many rivers that pour out o f the country's rugged mountain ranges. More than 90% of the country's electricity consumption is provided by hydroelectric power.

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Sweden is expected to be one of the forerunners of the recovery that is evolving across the EU. A key advantage is that Sweden's public finances are in a sound position, so expansionary fiscal policy could be used to stimulate the economy, an option not available to other major European economies. Swedish real GDP growth was revised up to 1.0% in 2013 with real GDP projected to expand 1.4% in 2014. Sweden's main natural resource is its large tracts of fertile soil suitable for farming and extensive forests, covering around two-thirds of the country. Forestry and associated processing in particular is a major industry. In addition, there are sizeable deposits of high-grade iron ore and other minerals. The country possesses an estimated 15% of the world's uranium reserves, and the country’s large freshwater lakes allow it to develop significant hydroelectricity generation capacity. The Nordic Countries LV motor market experienced a lackluster growth in revenues of 2.7% in 2013 after a similar poor growth of 2.8% in 2012. Despite the poor growth in the LV motor market, the relatively strong economies of the Nordic Countries are being shielded to some extent from the Eurozone debt crisis, and this bodes well for expansion in the medium term. The Nordic Countries market is estimated to have been worth $475 million in 2013, with 1,078k units sold. With a projected CAGR of 8.3% for revenues and 4.6% for units shipped over the forecast period, the Nordic Countries’ LV motor market is predicted to perform below the region’s average of 9.1%.

Turkey Through the first three quarters of 2013, domestic demand in Turkey grew robustly. However, tighter credit and higher commercial bank interest rates are projected to restrain both consumption and investment activity heading into 2014. Additionally, export growth will remain much more tepid than it had been previously, further weighing down potential economic growth. Although IHS growth projections are now more muted for 2014 relative to the second and third quarter gains in 2013, growth in Turkey will nonetheless remain relatively vigorous, particularly as compared to the rest of Europe. Exacerbating the country’s financial issues are domestic political troubles and the Syria morass, which discourage inflows of capital into Turkey. Turkey's industrial sector is well-developed. More resources are being poured into further development of energy refining. It has some oil deposits, but not enough to meet domestic demand. The country has substantial reserves of coal, estimated at around 1 billion tons. Main areas of specialization include textiles and clothing, ceramics and glass, steel, chemicals, and light consumer goods. Turkey is heavily dependent on imported oil and gas. Power capacity is set to increase because of planned nuclear power plant production, but Turkey is far from being self-sufficient in electricity. The country hopes to become a key middleman between the markets of Europe and the energy production of Russia and Central Asia. Agricultural resources are rich in cereal, cash, and fruit crops. More specifically, agricultural production is greatest in tobacco, cotton, grain, olives, sugar beets, and citrus fruits, and Turkey is a leading exporter of hazelnuts. Substantial mineral reserves exist in copper, zinc, lead, and gold, as Turkey is a leading global exporter of chrome. The production of automobiles is a leading growth sector. The Turkish LV motor market, which officially started its transition to IE2 in mid-2012, experienced low growth of 3.1% in 2013 after a modest growth of 5.1% in 2012. The Turkish market is estimated to have been worth $221 million in 2013, with 793k units sold. Growth rates for this market are expected to return to historical levels towards the end of the forecast period as the region’s economy is expected to improve, and the Turkish economy remains relatively stable. With a forecast revenue CAGR of 9.2% and units shipped CAGR of 5.8% over the forecast period, the Turkish MV motor market is predicted to perform slightly above the region’s average.

Poland Poland was the only EU country to avoid recession during the global financial crisis of 2008–09; however, the ongoing Eurozone crisis had a negative impact on the Polish economy, dropping growth rates close to zero in late 2012 and early 2013, before growth rates recovered modestly in the second and third quarters of 2013. In an attempt to stimulate the economy, the National Bank of Poland introduced interest rate cuts.

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Food processing and related industries constitute one of Poland's major sectors. Foreign investment within the sector has featured companies such as Nestlé, Philip Morris, and Coca Cola. Like its Central European neighbors, Poland has a significant concentration of firms focusing on automobile components and vehicle assembly. Volkswagen, Daewoo, General Motors, and Fiat lead the automotive investment in Poland. There has been diverse foreign investment, particularly from Germany, which has taken advantage of Poland's relatively inexpensive unskilled and semi-skilled workforce in the labor-intensive process of manufacturing. Poland's mineral wealth is rich in hard anthracite deposits, while there are also significant deposits of lignite, sulfur, and copper. Other minerals of economic importance are rock salt, potash, and iron ore. Small abundances of natural gas and oil are found in the pre-Carpathian region, while Poland is potentially rich in shale gas deposits. Exploration has already started, but the actual reserves of shale gas and the feasibility of drilling and producing it in Poland are still in question unless fracking technology is used. Poland’s LV motor market experienced modest revenue growth of 5.3% in 2013 after a better growth of 7.1% in 2012. Although Poland is not yet a full-fledged member of the European Union, its economic fate is tied to a certain extent to the region’s economic woes. The Polish market is estimated to have been worth $221 million in 2014, with 704 units sold. With a forecast revenue CAGR of 9.1% and a units shipped CAGR of 4.9% over the forecast period, the Polish MV motor market is predicted to perform at the region’s average.

Russian Federation & CIS Russia's rate of recovery from the global recession in 2008–09 has remained moderate. Reduced aggregate demand in Western Europe and the hesitancy of banks in that sub-region to extend loans to emerging European countries continued to dampen Russian growth in 2013 as Western Europe is Russia’s most important trading partner and source of external financing. IHS estimates GDP growth slowed to 1.7% in 2013. IHS expects GDP growth to rebound in 2014, albeit minor at 2.7%. The natural resource extraction sector is suffering from an extended period of insufficient investment during the country's economic transition. The southern part of European Russia has rich soil and supports most of the region's agriculture, while the Ural Mountains contain important mineral deposits including mineral fuels, iron ore, nonferrous metals, and nonmetallic minerals. The southern mountains, notably the Caucasus Mountains, contain valuable mineral deposits. The northern and central regions of the West Siberian Plain hold important oil and natural gas deposits. The Central Siberian Plateau is believed to contain substantial deposits of hard coal. New resource deposits required to replace the dwindling capacity of older, depleted deposits are generally associated with harsher geographical and climatic conditions, which complicate logistics and make them more capital intensive to develop and exploit. Therefore, huge investments will be required. The Russian Federation & CIS’s LV motor market experienced poor growth of 3.2% in 2013 after a healthy growth of 7.9% in 2012. The Russian oil & gas market is heavily dependent on Europe’s economic stability. With North America poised to become a major exporter of oil & gas in the short, medium, and possibly long term, this traditionally strong industry sector may suffer. The Russian & CIS market has no official energy regulations for LV motors and is estimated to have been worth $535 million in 2013, with 1,597k units sold. GOST motors, which are thought to have efficiency ratings lower than IE1 are heavily concentrated in this region. The region does not currently have official energy efficiency regulations. With a forecast revenue CAGR of 8.6% and a units shipped CAGR of 4.1% over the forecast period, the Russian Federation & CIS LV motor market is predicted to perform below the region’s average of 9.1%.

Central & Eastern Europe In 2013, Central & Eastern Europe’s LV motor market is estimated to have been worth $273 million, with 934k units sold. Power generation and infrastructure expansion (housing and public utilities) were the largest industries for LV motors in this region. At the time this report was published, energy efficiency regulations did not exist in Central & Eastern countries. These countries are assumed to be mostly end-user markets, consisting of mostly IE1 and GOST standard motors.

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The Central & Eastern European’s LV motor market experienced a low revenue growth of 2.0% during 2013 after a better growth of 3.4% in 2012. The Central & Eastern European economy is heavily dependent on Western Europe’s economic stability. Growth rates closer to historical levels for this market are expected to return in 2014. With a forecast revenue CAGR of 9.1% and a units shipped CAGR of 4.9% over the forecast period, the Central & Eastern European’s LV motor market is predicted to perform at the region’s average.

Africa GDP growth for the nation slowed from an average of 5.6% from 2002–08 to 2.2% in 2009 due to the global financial crisis and steep food and fuel price rises. However, Africa quickly recovered with growth of 4.8% in 2010. The continent’s growth slipped again in 2011 owing to political turmoil and transition in North Africa, but rebounded strongly to 5.4% in 2012, despite the global slowdown and uncertainty. The nation’s performance is largely commodity-driven and is bolstered by strengthening domestic demand associated with rising incomes and urbanization, increasing public spending on infrastructure, bumper harvests, tightening trade and investment ties with emerging economies linked to investment in Africa’s natural resources and extractive industries. Africa’s growth prospects faltered slightly in 2013, as it grew only 3.6%. IHS expects growth to climb to 5.2% in 2014, with GDP forecasts predicting growth above 5.0% each year through 2020. The continent’s population has reached the 1 billion mark and is projected to increase by 20% by 2030. The inadequate supply of infrastructure presents a significant obstacle for businesses in sub-Saharan Africa in contrast to North Africa. Mineral exports make up over half of the region’s total exports as the continent has 12% of the world's oil reserves, 40% of its gold, and 80% to 90% of its chromium and platinum. Resource-rich African countries are projected to increase production with newly discovered oil deposits in Kenya, Uganda and Tanzania. In addition to oil, production of gold (in Burkina Faso and Tanzania), coal and gas (in Mozambique) are set to increase. Non-oil producers are also encouraging exploration, such as Ethiopia in the Ogaden Basin and Rwanda in Lake Kivu. Africa is also home to 60% of the world's underutilized arable land and has vast timber resources. However, infrastructure is inadequate in all six of the nation’s oil exporting states and characterizes one of the nation’s most significant competitive handicaps. The African LV motor market experienced a modest growth of 6.0% in 2013 after a strong growth of 12.5% in 2012. The African market is estimated to have been worth $283 million in 2013, with 916k units sold. Africa’s oil & gas and mining sectors are strong and are expected to remain stable despite the expectation that its oil reserves will be somewhat displaced by shale gas exports from North America. Africa is poised to be a robust emerging economy with needed infrastructure and power generation upgrades expected during the decade. However, no energy efficiency regulations exist in this region and it is assumed to be mainly an IE1 market for LV motors. Growth rates for this market are expected to remain modest through 2016, and increase towards strong growth rates towards the end of the forecast period. With a forecast revenue CAGR of 10.0% and units shipped CAGR of 4.7% over the forecast period, the African LV motor market is predicted to perform well above the region’s average.

The Middle East The near-term economic outlook for the Middle East, North Africa, Afghanistan, and Pakistan (MENAP) region has weakened. Difficult political transitions and increased regional uncertainties arising from the complex civil war in Syria and the ongoing developments in Egypt weigh on confidence in the oil-importing countries. Domestic supply disruptions and weak global demand are reducing oil production, in addition to recent upward pressure on oil prices arising from increased geopolitical risks. GDP growth in the MENAP region declined to 2.7% in 2013. However, IHS expects growth to resume through 2017. Growth is expected to pick up in 2014 as global conditions improve and oil production in the region recovers. Renewed oil output disruptions in Iraq and Libya, falling oil exports in Iran in response to tightening sanctions, and a modest fall in oil production in Saudi Arabia all reflect an abundantly supplied global oil market. By contrast, the non-oil economy in the region continues to expand at a solid pace in most countries, supported by high levels of public spending and a gradual recovery of private sector credit growth. Slowing global oil demand caused by lower growth in emerging markets and rising supply from unconventional sources (such as shale gas in North America) could reduce oil prices and/or induce members of the Organization of the Petroleum Exporting Countries (OPEC) to cut back supply.

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Major natural resources of the region include oil and natural gas, cement, cotton, textiles, cotton, coal and iron. Iran has an advantage in comparison to other regional markets in that it has thriving automotive, telecommunications, agriculture, petrochemical, mining, steel, and copper industries, which make it unique in the Middle East. Israel’s offshore natural gas reserves are far larger than previously thought. According to the US Geological Survey, recoverable natural gas in the Levant Basin located in Israeli and Cypriot waters of the eastern Mediterranean Sea amounts to 18.9 trillion cubic feet. The new find could save Israel tens of billions of dollars in energy imports from Egypt and other places and position it as a new natural gas source for Europe, one of the world’s largest LNG markets. The Middle Eastern LV motor market experienced modest growth of 6.6% in 2013 after a strong growth of 12.6% in 2012. The Middle Eastern market is estimated to have been worth $333 million in 2013, with 764k units sold. Like Africa, the Middle Eastern oil & gas and mining sectors are strong and are expected to remain stable despite the expectation that its oil reserves will be somewhat displaced by shale gas exports from North America in the medium term. Some Middle Eastern countries (mainly the oil producing ones such as Iran, Iraq, Kuwait and Saudi Arabia) are poised to be robust emerging economies with needed infrastructure and power generation upgrades expected during the decade. However, political turmoil in Iraq and Syria could make this forecast vulnerable. Because of the intensifying strife in the region, IHS predicts disruption in those nation’s industrial economies, and expects very low growth of 1.9% in 2014, with strong growth rates returning towards the end of the forecast period. No energy efficiency regulations exist in this region and it is assumed to be mainly an IE1 market for LV motors. With a forecast revenue CAGR of 10.1% and units shipped CAGR of 4.8%, the Middle Eastern LV motor market is predicted to perform above the region’s average during the forecast period.

3.1.3 The EMEA market for low-voltage motors by application Tables 3.3a and 3.3b & Figures 3.6 and 3.7 Like in other regions, the applications sectors that are most insulated from economic difficulties are the pump, fan and compressor sectors as all three are expected to perform at, or outperform the market average of 9.1% during the forecast period, generating CAGRs for revenues of 9.1%, 9.8% and 9.2%, respectively. Low voltage motors sold into these outperforming application sectors stand to benefit the most from energy efficiency improvements as they are typically run at continuous duty (S1) cycles, and typically employ LV motors with power ratings in the 0.75kW to 7.4kW (1HP to 10HP) range. Because of this typical range in power rating, these application sectors will see the quickest transition from IE1 to IE2 motors in the short-term. Application sectors that are expected to perform significantly under the market average are expected to be Cranes & Hoists, Roller Tables, Propulsion, Winches and Winders at 7.7%, 6.3%, 3.3%, 6.9%, and 6.3%. The Printing application sector suffered a second straight year of contraction at 2.6% for 2013, after posting a 6.3% contraction in 2012.

3.1.4 The EMEA market for low-voltage motors by manufacturing sector Tables 3.4, 3.5a, 3.5b, 3.6 and 3.7 & Figures 3.8, 3.9, 3.10, 3.11, 3.12 and 3.13

Discrete manufacturing sector The Discrete Sector (Machine builders/OEMs) was the least affected of the three manufacturing sectors during the recovering economy in the region in 2013. The OEM sector in the region was estimated to be worth $3,216 million in 2013 with 9,418k units shipped. However, even the very stable OEM market was limited to a modest 5.4% growth in revenues from 2012 to 2013. However, the Discrete Sector is expected to outperform the market average of 9.9% during the forecast period at 9.4%, while the Process Sector is expected to underperform the market average at 9.0%. Discrete Sectors that are forecast to outperform the region’s market during the forecast period include Commercial HVAC, Conveyors, Elevators & Escalators, Food Beverage & Tobacco, Machine Tools, Packaging & Labeling, and Rubber & Plastics. OEM sectors forecast to significantly underperform the region’s market during the forecast period include Cranes & Hoists, Printing, Shipbuilding & Marine, and Woodworking.

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Process manufacturing sector The Process Sector (end-users) continues to rebound from the economic troubles in the region, posting a second consecutive year of lackluster growth. The End-user sector in the region was estimated to be worth $1,496 million in 2013 with 2,826k units shipped. Modest revenue growth of 5.4% and low unit growth in 2012 was followed by slightly worse results in 2013 or 4.8% revenue growth and 2.3% unit growth. Compared to 2012, strong growth the Process Sectors in 2013 came from Chemicals, Food, Beverage & Tobacco and Rubber & Plastics at 9.6%, 10.8% and 14.3%, respectively. Low revenues growth of less than 3% was experienced in the Pharmaceuticals, Power Generation – Nuclear & Fossil, Power Generation – Renewable Energy. However, three sectors are expected to outperform the market during the forecast period including Chemicals, Food, Beverage & Tobacco, and Oil & Gas and Power Generation – Nuclear & Fossil at 10.2%, 11.3%, 9.1% and 9.3%, respectively.

Other manufacturing sector The Other Manufacturing sector in the region was estimated to be worth $296 million in 2013 with 801.5k units shipped. The sector is predicted to perform under the regional market average, generating a CAGR of 6.4% for revenues during the forecast period. Only one Other Manufacturing sector, Infrastructure, is forecast to outperform the global market average during the forecast period, generating a CAGR for revenues of 7.4%.

3.1.5 The EMEA market for low-voltage motors by frame size Tables 3.7, 3.8a, 3.8b, 3.9a, 3.9b, and 3.9c & Figures 3.12, 3.13, 3.14 and 3.15 IEC frame LV motors were estimated to account for over 99% of the region’s LV motor revenues in 2012, with NEMA frame LV motors accounting for less than 1% of revenues. The IEC segment is expected to slightly outperform the market average at 9.2%. A small market for NEMA frame LV motors does exist in the region, but it is relegated to OEM exports to North America. The majority of LV motors sold into the EMEA LV market are between 80 and 225 IEC frame sizes, as these segments are all expected to perform at or above the market average during the forecast period. Revenues for IEC frame LV motors in the region are expected to grow steadily from organic demand through 2018, but will also be artificially influenced by inorganic demand resulting from the transition to more expensive IE2 and IE3 class LV motors during the forecast period. NEMA frame LV motors sold into the region are thought to be replacement motors for NEMA-centric machinery that exists in the EMEA installed base, primarily in the oil and gas and mining sectors of Africa and the Middle East. Revenues from NEMA frame LV motors sold to OEMs in this region will be more positively affected by the transition to higher efficiency motors in the export markets of North America than they will by organic demand from the OEMs themselves. Therefore, it is expected that NEMA frame LV motors in the EMEA will significantly underperform the market average at 2.2% CAGR for revenues.

3.1.6 The EMEA market for low-voltage motors by sales channel Table 3.10 & Figures 3.16 and 3.17 The variances between sales channels in the EMEA region are similar to other regions due to the strong influence of the Discrete Sector in the global LV motors market. Machinery production by OEMs has remained an outperforming sector through the global recession and during the ongoing recovery from Eurozone economic difficulties. The Direct to OEM sector accounted the largest sales channel in the region, and accounted for an estimated $3,928 million in 2013, or just over 78% of LV motor revenues in the region. Direct to End-user, Distribution to End-user, Distribution to OEM, and Distribution to Systems Integrator all experienced lackluster revenue growth in 2013 compared to 2012 at 2.5%, 0.6%, 1.2% and 1.1%, respectively. Both OEM sales channels are expected to outperform the market during the forecast period at 9.3% and 10.1%, respectively, while both systems integrators channels will significantly underperform the region’s average at 6.8% and 6.3%, respectively.

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3.1.7 The EMEA market for low-voltage motors by power rating Table 3.11 & Figures 3.18 and 3.19 The majority of LV motor revenues generated in region are attributed to LV motors between the power ratings of 0.75kW to 7.4kW (1HP to 10HP). In 2013, revenues from these power ranges account for an estimated $3,576 million, or almost 71% of the region’s LV motor market. In terms of units, this power range accounts for over almost 97% of units shipped. IHS expects the segments in this power rating range to outperform the market during the forecast period at10.1%, 9.6% and 9.1%, respectively. Despite the forecast underperformance of power rating segments between 7.5kW to 376kW (10HP to 500HP) in the region’s LV motor market during the forecast period, it is important to note that in 2015, Phase 2 of the EU’s efficiency transition to IE3 class LV motors begins. Therefore, beginning in 2015 and on through 2017, IHS expects LV motors segments between 7.5kW to 376kW (10HP to 504HP) in power rating to experience significantly higher year-on-year revenue growth than in previous years. This is due to revenue growth from inorganic demand resulting from energy efficiency regulations transitioning these power rating segments to IE3. However, as the provision allows, the surge in IE3 class LV motors during this year will be somewhat augmented by the allowance of an IE2+VFD in order to satisfy the regulations.

3.1.8 The EMEA market for low-voltage motors by enclosure Table 3.12 & Figures 3.20 and 3.21 The most prevalent enclosure for LV motors sold into the EMEA region is the totally enclosed fan-cooled (TEFC) variety. In 2013, TEFC LV motors, both non-hazardous and hazardous, accounted for an estimated $4,614 million, or 92% of EMEA market’s LV motor revenues and almost 94% of units shipped during the year. Revenues generated from TEFC non-hazardous LV motors are projected to slightly outperform the market during the forecast period, generating a CAGR of 9.3% for revenues. The hazardous area LV motor market has experienced higher year-on-year growth that in past years due to liability concerns in the automated factory environment. This sub-segment of TEFC is projected to grow robustly, producing a CAGR of 10.8% for revenues during the forecast period. Overall, the hazardous area equipment market, not for just LV motors, is widely considered to be a high growth market IHS extended the enclosure segmentation to include hazardous area motors for the 2013 Edition of the report, noted by the nonhazardous and hazardous sub-titles for each enclosure segment. The explosion proof motor, formerly referred to as the XP segment, is actually a subcategory of TEFC. An XP class motor uses a thicker grade of metal to protect the motor from a hazardous environment, or to minimize the potential for an unchecked ignition source to cause the motor to explode. The European equivalents of the North American-centric XP motor are also included in the TEFC/hazardous area segment. These equivalents include: Exd (flameproof), Exe (increased safety), Exia and EXib (intrinsically safe), Exo (oil immersion), Exp (pressurized apparatus), Exq (powder filling), Exm (encapsulation) and Exn (non-sparking). Open drip proof (ODP) motors are not in demand to the same degree in the EMEA region as they are in the Americas region, and usually occupy a minority share of European manufacturers’ product mixes. European manufacturers have reported that the influx of low cost Chinese TEFC motors into the region has had a disruptive effect on their respective cost models for producing ODP motors in smaller frame sizes. In essence, sustaining favorable margins for producing smaller frame size ODP motors has become more difficult. Due to this occurring, IHS has forecast that the segment will underperform the market during the forecast period, generating a CAGR of 7.5% for revenues.

3.2 EMEA market share analysis for 2013 Table 3.13 Low voltage motor manufacturers that have less than a 1.0% market share do not appear on Table 3.13, and are represented as a cumulative total in the Others grouping.

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Siemens held the top share position in the EMEA market for LV motors during 2013, with an estimated 17.0% share, a decrease of 0.5% from the previous year. Switzerland-based ABB is estimated to have had a 12.0% share in the region, down from 14.0% share in 2012. French manufacturer Leroy Somer held the third highest share in the region at 5.5% down from 6.5% in 2012. Austria’s ATB Group held the fourth share position in the EMEA at 3.5%, up 0.5% from 2012. Brazilian manufacturer WEG lost ground in region in 2013, moving down to the fifth share position in 2013 at 3.5%. The Russian manufacturer of GOST motors, LEZ Ruselprom, is mostly limited to the Russian Federation & CIS and Central & Eastern Europe for LV motor sales, and occupied the sixth share position at 3.0%, down from 3.5% shae in 2012. German-based VEM Group held steady at the seventh share position at 3.0% share. Poland’s Cantoni Group supplies mostly Central & Eastern Europe with LV motors and held the eighth share position at 2.5%. Turkish Arҫelik, strong in the Eastern European market, held the ninth position at 2.0%, followed closely by its main competitor in Turkey Gamak Motors which was estimated to have slightly below 2.0% of the EMEA market in 2013. Gamak Motors does not appear on the market share tables. All minor shareholders (less than 1%) are included in the Others share listing, with an aggregated total share of 48%. In terms of revenues for only IE4 LV motors, Italy’s Lafert Group was the top share leader in the region, while France’s Lero y Somer was second, with Japan’s Toshiba at the third share position in this growing motor segment.

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Table 3.1

The EMEA Market for Low Voltage Motors By Efficiency Class

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

CAGR 09 - 18

Revenues ($M) Units (k) ASP ($)

3,401.4 10,553.6 322

3,695.1 11,105.0 333

3,951.3 11,742.9 336

4,050.1 12,221.0 331

4,318.8 12,735.8 339

4,705.4 13,298.4 354

5,191.7 13,986.1 371

5,700.5 14,752.9 386

6,482.9 15,711.9 413

7,319.4 16,671.6 439

8.9% 5.2% 3.5%

IE1 - Standard Revenues ($M) Units (k) ASP ($)

2,850.0 9,128.8 312

3,019.2 9,523.9 317

2,988.7 9,527.1 314

2,642.6 8,931.0 296

2,133.8 7,434.8 287

1,622.3 5,738.7 283

1,531.6 5,390.8 284

1,597.6 5,513.0 290

1,691.1 5,665.5 298

1,796.9 5,902.1 304

-5.0% -4.7% -0.3%

IE2 - High Revenues ($M) Units (k) ASP ($)

511.4 1,365.2 375

613.7 1,503.0 408

860.8 2,076.3 415

1,284.0 3,116.8 412

2,048.8 5,118.6 400

2,931.4 7,360.4 398

3,450.2 8,313.7 415

3,841.8 8,901.4 432

4,160.8 9,172.6 454

4,375.9 9,187.5 476

26.9% 23.6% 2.7%

IE3 - Premium Revenues ($M) Units (k) ASP ($)

20.3 41.9 485

25.4 48.0 529

58.6 106.0 553

71.4 135.0 529

75.1 139.4 539

82.2 151.0 544

131.7 228.2 577

172.6 279.6 617

527.7 806.2 654

1,022.9 1,502.8 681

54.6% 48.9% 3.8%

19.7 17.7 1,115

36.8 30.1 1,220

43.1 33.5 1,287

52.1 38.2 1,363

61.0 43.0 1,419

69.5 48.4 1,437

78.2 53.4 1,465

88.4 58.9 1,500

103.3 67.5 1,530

123.6 79.2 1,561

22.6% 18.1% 3.8%

EFFICIENCIES: Total

IE4 - Super Premium Revenues ($M) Units (k) ASP ($)

NON-EFFICIENCIES: Total Revenues ($M) Units (k) ASP ($)

392.5 497.8 788

434.5 489.5 888

548.4 428.3 1,280

712.9 415.0 1,718

689.0 309.4 2,227

722.1 280.2 2,577

778.0 262.1 2,968

830.2 255.1 3,254

896.6 246.0 3,645

991.0 247.1 4,010

10.8% -7.5% 19.8%

DC Motors Revenues ($M) Units (k) ASP ($)

147.1 438.5 335

144.9 423.5 342

115.0 330.0 348

97.2 276.0 352

56.8 168.0 338

43.5 130.0 335

34.4 102.2 336

29.4 86.8 338

23.0 67.7 340

19.3 56.5 341

-20.2% -20.4% 0.2%

Other/non-reg. Revenues ($M) Units (k) ASP ($)

245.4 59.3 4,140

289.6 66.0 4,388

433.4 98.3 4,409

615.7 139.0 4,429

632.2 141.4 4,471

678.6 150.3 4,516

743.6 159.9 4,651

800.8 168.3 4,758

873.6 178.3 4,901

971.7 190.6 5,097

16.5% 13.9% 2.3%

3,793.9

4,129.6 8.8%

4,499.6 9.0%

4,763.0 5.9%

5,007.8 5.1%

5,427.5 8.4%

5,969.7 10.0%

6,530.7 9.4%

7,379.5 13.0%

8,310.4 12.6%

9.1%

Units (k) 11,051.4 11,594.5 12,171.2 12,636.0 13,045.2 13,578.6 14,248.2 15,008.1 15,957.9 16,918.7 4.9% 5.0% 3.8% 3.2% 4.1% 4.9% 5.3% 6.3% 6.0% Annua l Growth

4.8%

Revenues ($M) Annua l Growth

Source: IHS

July 2014

Jul-14

110

© 2014 IHS

IHS Technology

The World Market for Low Voltage Motors - 2014 Edition

Figure 3.1

The EMEA Market for Low Voltage Motors By Efficiency Class - Share of Market - 2010 to 2018 100%

Other/non-reg.

90%

DC Motors

80%

IE4 - Super Premium IE3 - Premium

Revenues (%)

70%

IE2 - High 60% IE1 - Standard 50% 40% 30% 20% 10% 0% 2010

2011

2012

2013

2014

2015

2016

2017

2018

Source: IHS

Jul-14

Figure 3.2

The EMEA Market for Low Voltage Motors By Efficiency Class - Market Breakdown and Growth 2,500

70%

2013 Revenues

60% 2,000

Growth 2014

50%

Growth 2015

1,500

30% 20%

1,000

10%

Growth (%)

Revenues ($M)

40%

0% 500

-10% -20%

0

-30% IE1

IE2

IE3

IE4

Source: IHS July 2014

DC

Other

Jul-14 111

© 2014 IHS

IHS Technology

The World Market for Low Voltage Motors - 2014 Edition

Figure 3.3

The EMEA Market for Low Voltage Motors By Efficiency Class - Revenue Growth Profiles - 2010 to 2018 225%

IE1 - Standard

200% IE2 - High

175% 150%

IE3 - Premium Growth (%)

125% 100%

IE4 - Super Premium

75% DC Motors

50% 25%

Other/non-reg.

0% 2010

2011

2012

2013

2014

2015

-25%

2016

2017

2018

Total Market

-50%

Source: IHS

July 2014

Jul-14

112

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IHS Technology

The World Market for Low Voltage Motors - 2014 Edition

Table 3.2a

The EMEA Market for Low Voltage Motors By Region

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

CAGR 09 - 18

Austria & Switzerland Revenues ($M) 116.9 Units (k) 281.3 ASP ($) 415

123.3 288.0 428

131.1 299.6 438

136.8 310.3 441

143.0 320.4 446

169.0 364.1 464

186.1 385.6 483

209.5 421.2 498

232.8 441.5 527

253.0 461.3 548

9.0% 5.7% 3.1%

Benelux Revenues ($M) Units (k) ASP ($)

179.7 454.6 395

199.2 463.0 430

214.1 486.9 440

221.5 500.2 443

229.3 514.5 446

250.7 541.0 463

286.1 591.9 483

305.4 612.9 498

344.3 651.7 528

384.2 696.0 552

8.8% 4.8% 3.8%

Spain & Portugal Revenues ($M) Units (k) ASP ($)

231.6 641.5 361

237.8 639.0 372

220.0 618.7 356

202.2 608.0 333

204.2 613.1 333

228.4 659.2 346

250.5 695.3 360

273.8 734.2 373

310.4 785.4 395

352.6 849.6 415

4.8% 3.2% 1.6%

France Revenues ($M) Units (k) ASP ($)

239.0 670.2 357

258.1 702.0 368

289.5 749.3 386

311.6 789.2 395

333.5 825.4 404

349.2 832.0 420

375.4 851.7 441

411.8 894.1 461

468.0 958.7 488

527.9 1,029.9 513

9.2% 4.9% 4.1%

Germany Revenues ($M) Units (k) ASP ($)

750.9 1,924.5 390

863.5 2,128.1 406

978.7 2,278.8 429

1,062.6 2,417.7 440

1,158.5 2,600.6 445

1,254.8 2,683.9 468

1,373.1 2,773.5 495

1,516.3 2,916.9 520

1,695.0 3,061.6 554

1,890.0 3,220.6 587

10.8% 5.9% 4.6%

Italy Revenues ($M) Units (k) ASP ($)

297.0 802.5 370

355.6 956.0 372

392.9 1,012.9 388

399.7 1,019.1 392

415.8 1,012.4 411

426.9 999.5 427

460.4 1,034.6 445

487.5 1,059.7 460

541.6 1,110.8 488

600.6 1,160.8 517

8.1% 4.2% 3.8%

UK & Ireland Revenues ($M) Units (k) ASP ($)

131.6 364.0 361

137.9 370.0 373

141.4 368.1 384

147.0 372.9 394

152.4 370.8 411

164.9 385.9 427

184.2 413.5 445

206.1 448.8 459

238.3 489.6 487

272.0 532.3 511

8.4% 4.3% 3.9%

The Nordic Countries Revenues ($M) 411.1 Units (k) 1,017.5 ASP ($) 404

431.7 1,036.0 417

450.1 1,051.5 428

462.7 1,069.7 433

475.3 1,078.5 441

537.6 1,172.9 458

594.6 1,245.0 478

653.1 1,326.4 492

744.5 1,426.3 522

846.0 1,529.1 553

8.3% 4.6% 3.6%

Turkey Revenues ($M) Units (k) ASP ($)

200.4 707.8 283

212.2 727.0 292

230.1 760.4 303

241.8 784.1 308

249.2 793.3 314

274.7 848.8 324

317.0 941.9 337

349.5 1,007.2 347

397.0 1,094.8 363

443.9 1,172.6 379

9.2% 5.8% 3.3%

Poland Revenues ($M) Units (k) ASP ($)

168.4 600.0 281

176.8 611.0 289

196.6 653.6 301

210.5 683.0 308

221.7 704.2 315

241.8 738.4 327

269.4 783.4 344

294.1 828.2 355

330.5 872.6 379

369.2 923.8 400

9.1% 4.9% 4.0%

Continued on the next page

Source: IHS

July 2014

Jul-14

113

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IHS Technology

The World Market for Low Voltage Motors - 2014 Edition

Table 3.2b

The EMEA Market for Low Voltage Motors By Region

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

CAGR 09 - 18

411.7 1,386.1 297

440.5 1,426.1 309

480.8 1,499.9 321

518.5 1,569.5 330

535.0 1,597.2 335

572.1 1,642.1 348

625.4 1,701.7 367

675.0 1,774.5 380

767.2 1,888.4 406

861.5 1,981.8 435

8.6% 4.1% 4.3%

Cent. & East. Europe Revenues ($M) Units (k) ASP ($)

236.9 861.2 275

248.7 877.0 284

259.5 900.7 288

268.3 919.4 292

273.6 934.1 293

302.4 992.6 305

341.9 1,078.6 317

381.6 1,163.2 328

432.3 1,243.2 348

517.3 1,328.2 390

9.1% 4.9% 3.9%

Africa Revenues ($M) Units (k) ASP ($)

195.3 760.0 257

205.1 774.0 265

237.3 831.8 285

267.0 876.1 305

283.0 916.3 309

315.2 980.9 321

342.8 1,019.3 336

372.1 1,069.2 348

417.4 1,114.5 374

459.9 1,147.8 401

10.0% 4.7% 5.1%

Middle East Revenues ($M) Units (k) ASP ($)

223.6 580.3 385

239.2 597.0 401

277.6 659.0 421

312.7 716.8 436

333.3 764.4 436

339.8 737.2 461

362.8 732.3 495

394.8 751.8 525

460.1 818.9 562

532.1 885.1 601

10.1% 4.8% 5.1%

3,793.9

4,129.6 8.8%

4,499.6 9.0%

4,763.0 5.9%

5,007.8 5.1%

5,427.5 8.4%

5,969.7 10.0%

6,530.7 9.4%

7,379.5 13.0%

8,310.4 12.6%

9.1%

Units (k) 11,051.4 11,594.5 12,171.2 12,636.0 13,045.2 13,578.6 14,248.2 15,008.1 15,957.9 16,918.7 4.9% 5.0% 3.8% 3.2% 4.1% 4.9% 5.3% 6.3% 6.0% Annua l Growth

4.8%

Russian Fed. & CIS Revenues ($M) Units (k) ASP ($)

Revenues ($M) Annua l Growth

Source: IHS

July 2014

Jul-14

114

© 2014 IHS

IHS Technology

The World Market for Low Voltage Motors - 2014 Edition

Figure 3.4

The EMEA Market for Low Voltage Motors By Region - Market Breakdown and Growth 1,200

20%

2013 Revenues

18% 16%

Growth 2014

14%

Growth 2015

12% 600

10% 8%

Growth (%)

Revenues ($M)

900

6% 300 4% 2% 0

0%

Source: IHS

July 2014

Jul-14

115

© 2014 IHS

IHS Technology

The World Market for Low Voltage Motors - 2014 Edition

Figure 3.5a

The EMEA Market for Low Voltage Motors By Region - Revenue Growth Profiles - 2010 to 2018 20%

Austria & Switzerland Benelux

15%

Spain & Portugal Growth (%)

10%

France Germany

5%

Italy 0% 2010

2011

2012

2013

2014

2015

2016

2017

2018

UK & Ireland The Nordic Countries

-5%

Total Market -10%

Source: IHS

Jul-14

Figure 3.5b

The EMEA Market for Low Voltage Motors By Region - Revenue Growth Profiles - 2010 to 2018 20% Turkey

Poland

Growth (%)

15%

Russian Fed. & CIS Cent. & East. Europe

10%

Africa 5%

Middle East

Total Market 0% 2010

2011

2012

2013

2014

2015

Source: IHS July 2014

2016

2017

2018

Jul-14 116

© 2014 IHS

IHS Technology

The World Market for Low Voltage Motors - 2014 Edition

Table 3.3a

The EMEA Market for Low Voltage Motors By Application

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

CAGR 09 - 18

Compressors Revenues ($M) Units (k) ASP ($)

1,122.5 3,147.5 357

1,208.9 3,368.1 359

1,309.4 3,493.1 375

1,379.0 3,605.7 382

1,453.4 3,764.3 386

1,570.2 3,944.0 398

1,742.0 4,170.6 418

1,908.2 4,424.2 431

2,177.6 4,721.8 461

2,480.9 5,026.6 494

9.2% 5.3% 3.7%

Conveyors Revenues ($M) Units (k) ASP ($)

60.6 101.7 596

71.7 107.0 670

79.8 113.8 701

84.6 116.7 725

88.7 120.3 738

98.0 127.9 766

106.6 132.0 808

116.0 137.8 842

128.8 144.9 889

142.2 151.9 936

9.9% 4.6% 5.1%

Cranes & Hoists Revenues ($M) Units (k) ASP ($)

38.3 51.0 751

45.6 51.0 894

50.2 53.6 936

49.3 52.2 944

48.8 51.8 943

52.7 54.0 976

58.0 57.0 1,018

62.3 59.4 1,049

68.4 62.5 1,093

74.8 65.6 1,139

7.7% 2.9% 4.7%

Crushers Revenues ($M) Units (k) ASP ($)

26.6 29.2 910

32.3 30.0 1,077

35.1 31.6 1,111

37.8 32.2 1,173

39.0 30.1 1,295

41.8 31.1 1,341

42.7 30.5 1,398

44.0 30.7 1,436

48.4 32.4 1,496

53.1 34.1 1,559

8.0% 1.7% 6.2%

Elevators & Escalators Revenues ($M) 91.7 Units (k) 186.8 ASP ($) 491

110.8 192.0 577

123.5 203.9 606

133.9 213.9 626

140.0 216.8 645

149.9 224.4 668

162.1 232.6 697

173.7 242.0 718

193.6 258.9 748

212.8 272.8 780

9.8% 4.3% 5.3%

Extruders Revenues ($M) Units (k) ASP ($)

40.9 68.0 602

49.4 69.0 716

53.8 72.5 742

54.2 71.5 758

56.6 73.9 767

61.2 77.1 794

67.5 81.6 827

74.4 87.5 850

83.1 93.8 886

92.6 100.3 924

9.5% 4.4% 4.9%

Fans Revenues ($M) Units (k) ASP ($)

1,036.9 3,440.7 301

1,091.2 3,576.1 305

1,199.5 3,768.8 318

1,281.5 3,926.6 326

1,359.2 4,058.5 335

1,498.4 4,248.9 353

1,652.5 4,479.8 369

1,824.0 4,763.7 383

2,100.0 5,111.5 411

2,400.2 5,459.8 440

9.8% 5.3% 4.3%

Roller Tables Revenues ($M) Units (k) ASP ($)

12.4 26.0 478

14.8 26.0 569

16.2 27.2 596

15.4 25.8 598

15.8 26.4 600

17.3 27.9 621

19.2 29.7 647

19.6 29.8 659

20.7 30.1 687

21.6 30.2 716

6.3% 1.7% 4.6%

Printing Revenues ($M) Units (k) ASP ($)

8.7 17.3 501

10.4 17.0 612

11.2 17.5 637

10.5 16.4 637

10.2 16.1 635

10.7 16.3 654

10.3 15.3 674

8.6 12.3 694

8.2 11.5 715

7.7 10.5 737

-1.3% -5.4% 4.4%

Pumps Revenues ($M) Units (k) ASP ($)

1,028.2 2,495.3 412

1,103.5 2,632.1 419

1,202.7 2,816.8 427

1,285.8 2,983.8 431

1,359.3 3,093.2 439

1,470.2 3,216.8 457

1,622.7 3,381.3 480

1,789.2 3,550.8 504

2,005.9 3,777.0 531

2,245.8 4,015.9 559

9.1% 5.4% 3.5%

Propulsion Revenues ($M) Units (k) ASP ($)

28.9 49.2 587

34.1 49.0 696

37.8 51.2 738

35.9 49.2 729

30.8 45.1 685

32.9 46.5 708

35.7 48.4 739

37.6 49.4 760

38.7 48.9 792

38.6 46.8 826

3.3% -0.6% 3.9%

Winches Revenues ($M) Units (k) ASP ($)

12.5 24.0 521

15.2 24.0 633

16.6 25.3 656

16.0 24.9 645

16.6 25.3 656

17.5 25.8 679

18.5 26.1 708

19.8 27.2 729

21.2 27.9 759

22.7 28.8 790

6.9% 2.1% 4.7%

Continued on the next page

Source: IHS July 2014

Jul-14 117

© 2014 IHS

IHS Technology

The World Market for Low Voltage Motors - 2014 Edition

Table 3.3b

The EMEA Market for Low Voltage Motors By Application

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

CAGR 09 - 18

Winders Revenues ($M) Units (k) ASP ($)

10.3 19.4 531

12.3 20.0 615

13.2 21.1 628

13.1 20.7 631

13.4 21.1 638

14.2 21.5 660

15.3 22.1 689

15.9 22.4 710

16.5 22.3 739

17.8 23.1 770

6.3% 2.0% 4.2%

Other Revenues ($M) Units (k) ASP ($)

275.4 1,395.5 197

329.4 1,433.2 230

350.7 1,474.9 238

366.0 1,496.3 245

375.7 1,502.4 250

392.4 1,516.3 259

416.6 1,541.2 270

437.4 1,570.9 278

468.3 1,614.5 290

499.4 1,652.5 302

6.8% 1.9% 4.8%

3,793.9

4,129.6 8.8%

4,499.6 9.0%

4,763.0 5.9%

5,007.8 5.1%

5,427.5 8.4%

5,969.7 10.0%

6,530.7 9.4%

7,379.5 13.0%

8,310.4 12.6%

9.1%

Units (k) 11,051.4 11,594.5 12,171.2 12,636.0 13,045.2 13,578.6 14,248.2 15,008.1 15,957.9 16,918.7 4.9% 5.0% 3.8% 3.2% 4.1% 4.9% 5.3% 6.3% 6.0% Annua l Growth

4.8%

Revenues ($M) Annua l Growth

Source: IHS

July 2014

Jul-14

118

© 2014 IHS

IHS Technology

The World Market for Low Voltage Motors - 2014 Edition

Figure 3.6

The EMEA Market for Low Voltage Motors By Application - Market Breakdown and Growth 1,600

2013 Revenues

15%

1,400

Growth 2014 10% Growth 2015

1,000 800

5%

600 400

Growth (%)

Revenues ($M)

1,200

0%

200 0

-5%

Source: IHS

Jul-14

Figure 3.7

The EMEA Market for Low Voltage Motors By Application - Revenue Growth Profiles - 2010 to 2018 22% Compressors

Conveyors

18%

Growth (%)

Crushers 14% Elev & Esc 10%

Fans

Pumps 6%

Total Market 2% 2010

2011

2012

2013

2014

2015

Source: IHS July 2014

2016

2017

2018

Jul-14 119

© 2014 IHS

IHS Technology

The World Market for Low Voltage Motors - 2014 Edition

Table 3.4

The EMEA Market for Low Voltage Motors By Discrete, Process & Other Manufacturing Sectors

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

CAGR 09 - 18

Discrete Sector Revenues ($M) Units (k) ASP ($)

2,391.9 7,872.0 304

2,610.6 8,250.4 316

2,870.4 8,714.7 329

3,050.0 9,086.8 336

3,216.2 9,418.2 341

3,513.5 9,850.8 357

3,895.9 10,370.8 376

4,232.5 10,878.8 389

4,781.3 11,516.3 415

5,381.6 12,157.2 443

9.4% 4.9% 4.3%

Process Sector Revenues ($M) Units (k) ASP ($)

1,153.7 2,475.2 466

1,246.4 2,586.9 482

1,353.9 2,687.4 504

1,426.9 2,763.0 516

1,496.0 2,825.5 529

1,605.3 2,907.1 552

1,744.2 3,027.6 576

1,943.3 3,241.6 600

2,206.2 3,494.6 631

2,495.7 3,754.1 665

9.0% 4.7% 4.0%

Other Sector Revenues ($M) Units (k) ASP ($)

248.2 704.3 352

272.6 757.3 360

275.4 769.2 358

286.0 786.2 364

295.6 801.5 369

308.7 820.7 376

329.6 849.8 388

354.8 887.6 400

392.0 947.0 414

433.1 1,007.4 430

6.4% 4.1% 2.2%

3,793.9

4,129.6 8.8%

4,499.6 9.0%

4,763.0 5.9%

5,007.8 5.1%

5,427.5 8.4%

5,969.7 10.0%

6,530.7 9.4%

7,379.5 13.0%

8,310.4 12.6%

9.1%

Units (k) 11,051.4 11,594.5 12,171.2 12,636.0 13,045.2 13,578.6 14,248.2 15,008.1 15,957.9 16,918.7 4.9% 5.0% 3.8% 3.2% 4.1% 4.9% 5.3% 6.3% 6.0% Annua l Growth

4.8%

Revenues ($M) Annua l Growth

Source: IHS

July 2014

Jul-14

120

© 2014 IHS

IHS Technology

The World Market for Low Voltage Motors - 2014 Edition

Table 3.5a

The EMEA Market for Low Voltage Motors By Discrete Sector

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

CAGR 09 - 18

138.6 285.2 486

152.0 306.0 497

160.2 310.9 515

158.7 308.6 514

162.5 313.6 518

178.2 321.4 555

198.6 335.5 592

215.0 353.0 609

243.7 376.9 647

280.4 410.0 684

8.1% 4.1% 3.9%

832.3 3,848.9 216

879.8 4,035.6 218

1,005.5 4,278.3 235

1,081.6 4,449.5 243

1,147.4 4,649.6 247

1,234.2 4,854.9 254

1,353.0 5,102.4 265

1,472.7 5,343.2 276

1,665.9 5,646.6 295

1,892.3 5,958.9 318

9.6% 5.0% 4.4%

Conveyors Revenues ($M) Units (k) ASP ($)

60.6 101.7 596

71.7 107.0 670

79.8 113.8 701

84.6 116.7 725

88.7 120.3 738

98.0 127.9 766

106.6 132.0 808

116.0 137.8 842

128.8 144.9 889

142.2 151.9 936

9.9% 4.6% 5.1%

Cranes & Hoists Revenues ($M) Units (k) ASP ($)

38.3 51.0 751

45.6 51.0 894

50.2 53.6 936

49.3 52.2 944

48.8 51.8 943

52.7 54.0 976

58.0 57.0 1,018

62.3 59.4 1,049

68.4 62.5 1,093

74.8 65.6 1,139

7.7% 2.9% 4.7%

Elevators & Escalators Revenues ($M) 91.7 Units (k) 186.8 ASP ($) 491

110.8 192.0 577

123.5 203.9 606

133.9 213.9 626

140.0 216.8 645

149.9 224.4 668

162.1 232.6 697

173.7 242.0 718

193.6 258.9 748

212.8 272.8 780

9.8% 4.3% 5.3%

Food, Bev. & Tobacco (DS) Revenues ($M) 442.5 Units (k) 1,389.9 ASP ($) 318

456.6 1,425.1 320

496.7 1,524.4 326

541.5 1,649.4 328

566.9 1,714.8 331

638.0 1,810.4 352

735.3 1,912.7 384

805.2 1,995.8 403

923.2 2,111.1 437

1,043.0 2,214.0 471

10.0% 5.3% 4.4%

Automotive Revenues ($M) Units (k) ASP ($) Commercial HVAC Revenues ($M) Units (k) ASP ($)

Machine Tools Revenues ($M) Units (k) ASP ($)

71.1 136.8 520

79.7 153.0 521

85.6 163.2 525

90.2 170.0 531

96.9 175.7 551

109.7 187.7 585

126.4 206.9 611

143.6 229.0 627

163.9 249.4 657

181.2 263.3 688

11.0% 7.5% 3.2%

Mining (DS) Revenues ($M) Units (k) ASP ($)

164.7 279.0 590

172.5 288.0 599

182.3 294.6 619

202.2 315.0 642

219.9 328.7 669

238.0 333.9 713

263.2 348.4 755

282.2 363.3 777

320.6 385.8 831

364.3 409.7 889

9.2% 4.4% 4.7%

Packaging & Labeling Revenues ($M) 108.8 Units (k) 370.0 ASP ($) 294

123.5 386.0 320

131.4 406.6 323

136.2 394.3 345

146.7 408.7 359

164.4 432.0 381

187.8 463.4 405

212.4 503.8 422

248.1 544.8 455

287.1 594.9 483

11.4% 5.4% 5.7%

Paper & Paperboard Revenues ($M) Units (k) ASP ($)

142.9 420.6 340

152.2 438.6 347

157.0 448.8 350

169.8 465.8 365

190.3 497.1 383

209.4 522.5 401

225.2 547.3 412

250.3 582.5 430

277.4 618.3 449

8.8% 5.3% 3.4%

129.9 389.9 333

Continued on the next page

Source: IHS

July 2014

Jul-14

121

© 2014 IHS

IHS Technology

The World Market for Low Voltage Motors - 2014 Edition

Table 3.5b

The EMEA Market for Low Voltage Motors By Discrete Sector

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

CAGR 09 - 18

Printing Revenues ($M) Units (k) ASP ($)

8.7 17.3 501

10.4 17.0 612

11.2 17.5 637

10.5 16.4 637

10.2 16.1 635

10.7 16.3 654

10.3 15.3 674

8.6 12.3 694

8.2 11.5 715

7.7 10.5 737

-1.3% -5.4% 4.4%

Refrigeration Revenues ($M) Units (k) ASP ($)

31.2 31.6 987

38.9 36.0 1,079

46.2 42.1 1,098

48.6 43.2 1,125

48.0 41.5 1,156

50.9 42.7 1,191

54.6 44.3 1,232

57.8 45.7 1,264

62.7 47.6 1,318

67.9 49.4 1,375

9.0% 5.1% 3.7%

Robotics Revenues ($M) Units (k) ASP ($)

2.7 7.6 361

3.3 8.0 412

3.6 8.4 431

4.0 9.0 444

4.3 9.3 462

4.7 9.6 485

5.0 9.9 507

5.3 10.2 520

5.3 9.7 543

5.7 10.1 567

8.6% 3.3% 5.1%

Rubber & Plastics (DS) Revenues ($M) 31.1 Units (k) 86.6 ASP ($) 359

37.5 92.0 408

41.8 96.9 431

44.1 114.6 385

47.2 117.8 401

50.2 119.3 421

54.8 124.1 442

59.6 131.8 452

67.8 142.2 477

77.3 155.3 498

10.6% 6.7% 3.7%

Semiconductor Revenues ($M) Units (k) ASP ($)

9.7 29.8 324

11.9 30.0 397

12.7 33.6 377

13.1 34.6 379

14.1 35.9 394

15.1 37.3 405

16.3 38.9 418

17.1 39.8 429

18.6 41.5 448

20.0 42.7 468

8.4% 4.1% 4.2%

Shipbuilding & Marine Revenues ($M) 70.3 Units (k) 155.2 ASP ($) 453

87.0 168.0 518

90.9 170.8 532

86.3 163.6 528

93.2 168.8 552

95.4 171.2 557

98.8 175.5 563

101.2 178.1 568

113.2 184.5 614

127.9 192.9 663

6.9% 2.4% 4.3%

Textiles Revenues ($M) Units (k) ASP ($)

79.4 241.9 328

92.6 251.0 369

98.2 264.9 371

102.5 279.0 367

105.7 280.1 377

119.3 300.8 397

134.0 323.2 415

145.4 341.6 426

159.4 359.0 444

174.6 377.2 463

9.2% 5.1% 3.9%

Woodworking Revenues ($M) Units (k) ASP ($)

16.4 57.8 283

19.6 59.0 332

21.6 62.5 346

20.1 61.8 325

20.6 62.5 330

22.2 63.9 347

23.9 65.8 363

25.2 67.5 373

27.2 69.7 390

29.2 71.9 407

6.7% 2.4% 4.1%

Other Discrete Sectors Revenues ($M) 64.1 Units (k) 205.3 ASP ($) 312

74.3 225.0 330

76.8 230.1 334

85.6 246.1 348

85.2 240.5 354

91.5 245.1 373

97.8 251.3 389

104.2 260.9 399

112.5 269.8 417

115.8 266.0 435

6.8% 2.9% 3.8%

3,895.9 10.9%

4,232.5 8.6%

4,781.3 13.0%

5,381.6 12.6%

9.4%

10,878.8 11,516.3 12,157.2 4.9% 5.9% 5.6%

4.9%

Revenues ($M) Annua l Growth

2,391.9

2,610.6 9.1%

2,870.4 10.0%

3,050.0 6.3%

3,216.2 5.4%

3,513.5 9.2%

Units (k) Annua l Growth

7,872.0

8,250.4 4.8%

8,714.7 5.6%

9,086.8 4.3%

9,418.2 3.6%

9,850.8 10,370.8 4.6% 5.3%

Source: IHS

July 2014

Jul-14

122

© 2014 IHS

IHS Technology

The World Market for Low Voltage Motors - 2014 Edition

Figure 3.8

The EMEA Market for Low Voltage Motors By Discrete Sector - Market Breakdown and Growth 1,600

20%

2013 Revenues

1,400

Growth 2014

15%

Growth 2015

1,000

10%

800

5%

600

Growth (%)

Revenues ($M)

1,200

400 0% 200 0

-5%

Source: IHS

Jul-14

Figure 3.9

The EMEA Market for Low Voltage Motors By Discrete Sector - Revenue Growth Profiles - 2010 to 2018 22%

Commercial HVAC Conveyors

Growth (%)

18%

Elevators & Escalators

14%

Food, Bev. & Tobacco (DS)

10%

Machine Tools

Mining (DS)

6%

Total Market 2% 2010

2011

2012

2013

2014

2015

Source: IHS July 2014

2016

2017

2018

Jul-14 123

© 2014 IHS

IHS Technology

The World Market for Low Voltage Motors - 2014 Edition

Table 3.6

The EMEA Market for Low Voltage Motors By Process Sector

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

CAGR 09 - 18

66.6 201.5 331

85.7 209.0 410

90.7 213.2 425

99.3 234.3 424

108.9 241.1 452

116.0 253.5 458

125.7 269.8 466

135.8 284.7 477

147.0 303.4 485

159.2 324.0 491

10.2% 5.4% 4.5%

Food, Bev. & Tobacco (PS) Revenues ($M) 127.8 Units (k) 419.5 ASP ($) 305

136.4 436.0 313

150.0 452.5 331

165.2 462.0 358

183.1 497.7 368

207.7 527.5 394

235.1 558.2 421

262.5 593.4 442

297.8 629.3 473

334.7 661.0 506

11.3% 5.2% 5.8%

Metal Processing Revenues ($M) Units (k) ASP ($)

84.3 141.5 596

90.3 146.0 618

96.3 150.5 640

97.9 151.1 648

103.2 154.8 667

106.4 154.9 687

110.9 156.8 708

118.8 163.0 729

133.5 177.8 751

150.3 194.4 773

6.6% 3.6% 2.9%

Mining (PS) Revenues ($M) Units (k) ASP ($)

65.7 85.3 770

72.2 88.0 820

91.7 100.7 911

117.7 108.1 1,089

110.5 104.5 1,057

111.1 104.1 1,068

113.0 104.7 1,079

119.7 109.9 1,089

131.7 119.7 1,100

140.6 126.5 1,111

8.8% 4.5% 4.2%

Oil & Gas Revenues ($M) Units (k) ASP ($)

310.6 503.1 617

323.2 510.3 633

346.5 544.4 636

351.1 555.1 633

367.9 556.9 661

395.4 570.0 694

439.0 602.7 728

504.9 660.3 765

586.8 723.9 811

682.9 794.7 859

9.1% 5.2% 3.7%

Pharmaceuticals Revenues ($M) Units (k) ASP ($)

69.2 150.6 459

75.7 162.0 467

82.2 173.4 474

85.7 175.9 487

87.8 178.6 492

91.3 178.5 511

95.6 179.8 532

103.8 187.7 553

115.5 198.9 581

128.0 209.9 610

7.1% 3.8% 3.2%

Power Gen-Nuc. & Fossil Revenues ($M) 123.3 Units (k) 209.4 ASP ($) 589

125.5 213.6 587

136.3 217.7 626

144.3 228.7 631

148.1 233.9 633

162.9 244.1 667

178.1 257.9 691

200.3 280.0 715

235.2 310.9 756

274.2 343.8 797

9.3% 5.7% 3.4%

Power Gen-Ren. Energy Revenues ($M) 32.1 Units (k) 31.8 ASP ($) 1,008

37.4 36.6 1,023

42.7 39.6 1,077

40.2 38.8 1,036

40.7 37.5 1,085

42.3 37.4 1,129

43.6 37.2 1,174

48.2 39.5 1,221

51.4 40.5 1,270

53.4 40.8 1,308

5.8% 2.8% 2.9%

14.2 30.9 460

16.3 33.0 494

18.4 35.1 524

20.3 37.5 541

23.2 37.3 623

23.6 36.8 639

23.8 36.2 657

25.3 37.4 674

27.0 38.6 698

28.7 40.0 719

8.2% 2.9% 5.1%

Water & Wastewater Revenues ($M) 227.4 Units (k) 538.3 ASP ($) 422

242.4 543.0 446

255.4 547.7 466

260.2 550.9 472

275.3 562.5 489

301.7 587.4 514

332.4 617.9 538

374.6 674.5 555

428.1 734.5 583

489.0 796.9 614

8.9% 4.5% 4.2%

Other Process Sectors Revenues ($M) 32.6 Units (k) 163.2 ASP ($) 199

41.3 209.3 197

43.7 212.5 206

45.0 220.7 204

47.3 220.9 214

47.0 212.7 221

46.9 206.4 227

49.5 211.3 234

52.4 217.3 241

54.7 222.1 246

5.9% 3.5% 2.4%

Chemicals Revenues ($M) Units (k) ASP ($)

Rubber & Plastics (PS) Revenues ($M) Units (k) ASP ($)

Revenues ($M) Annua l Growth

1,153.7

1,246.4 8.0%

1,353.9 8.6%

1,426.9 5.4%

1,496.0 4.8%

1,605.3 7.3%

1,744.2 8.7%

1,943.3 11.4%

2,206.2 13.5%

2,495.7 13.1%

9.0%

Units (k) Annua l Growth

2,475.2

2,586.9 4.5%

2,687.4 3.9%

2,763.0 2.8%

2,825.5 2.3%

2,907.1 2.9%

3,027.6 4.1%

3,241.6 7.1%

3,494.6 7.8%

3,754.1 7.4%

4.7%

Source: IHS July 2014

Jul-14 124

© 2014 IHS

IHS Technology

The World Market for Low Voltage Motors - 2014 Edition

Figure 3.10

The EMEA Market for Low Voltage Motors By Process Sector - Market Breakdown and Growth 400

15%

2013 Revenues

350 300

Growth 2014

10%

Growth 2015

200

5%

150 100

Growth (%)

Revenues ($M)

250

0%

50 0

-5%

Source: IHS

Jul-14

Figure 3.11

The EMEA Market for Low Voltage Motors By Process Sector - Revenue Growth Profiles - 2010 to 2018 30%

Chemicals

Growth (%)

25% 20%

Food, Bev. & Tobacco (PS)

15%

Mining (PS)

10% Pharmaceuticals

5% 0% 2010

2011

2012

2013

2014

2015

-5%

2016

2017

2018

Rubber & Plastics (PS) Total Market

-10%

Source: IHS July 2014

Jul-14 125

© 2014 IHS

IHS Technology

The World Market for Low Voltage Motors - 2014 Edition

Table 3.7

The EMEA Market for Low Voltage Motors By Other Sector

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

CAGR 09 - 18

Building Automation Revenues ($M) 53.1 Units (k) 165.7 ASP ($) 321

58.0 181.0 320

58.5 188.2 311

60.1 195.8 307

62.3 198.9 313

64.7 200.4 323

67.9 202.4 336

73.1 211.4 346

80.1 225.5 355

90.6 241.1 376

6.1% 4.3% 1.8%

Infrastructure Revenues ($M) Units (k) ASP ($)

111.9 246.4 454

124.3 265.7 468

126.5 288.7 438

134.7 290.9 463

139.5 299.9 465

145.2 310.4 468

156.6 330.7 474

171.7 354.3 485

192.5 382.8 503

213.2 409.9 520

7.4% 5.8% 1.5%

Others Revenues ($M) Units (k) ASP ($)

83.2 292.2 285

90.3 310.6 291

90.4 292.3 309

91.3 299.5 305

93.7 302.7 310

98.8 310.0 319

105.0 316.7 332

110.0 321.9 342

119.4 338.7 352

129.4 356.4 363

5.0% 2.2% 2.7%

Revenues ($M) Annua l Growth

248.2

272.6 9.8%

275.4 1.0%

286.0 3.9%

295.6 3.3%

308.7 4.4%

329.6 6.8%

354.8 7.7%

392.0 10.5%

433.1 10.5%

6.4%

Units (k) Annua l Growth

704.3

757.3 7.5%

769.2 1.6%

786.2 2.2%

801.5 2.0%

820.7 2.4%

849.8 3.5%

887.6 4.5%

947.0 6.7%

1,007.4 6.4%

4.1%

Source: IHS

July 2014

Jul-14

126

© 2014 IHS

IHS Technology

The World Market for Low Voltage Motors - 2014 Edition

Figure 3.12

The EMEA Market for Low Voltage Motors 150

8%

2013 Revenues

125

7%

Growth 2014

100

6%

Growth 2015

75

5%

50

4%

25

3%

0

2%

Growth (%)

Revenues ($M)

By Other Sector - Market Breakdown and Growth

Source: IHS

Jul-14

Figure 3.13

The EMEA Market for Low Voltage Motors By Other Sector - Market Breakdown and Growth 15%

Building Automation 12%

Growth (%)

Infrastructure 9%

Others

6%

3% Total Market

0% 2010

2011

2012

2013

2014

2015

Source: IHS July 2014

2016

2017

2018

Jul-14 127

© 2014 IHS

IHS Technology

The World Market for Low Voltage Motors - 2014 Edition

Table 3.8

The EMEA Market for Low Voltage Motors By IEC v. NEMA

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

CAGR 09 - 18

IEC Revenues ($M) Units (k) ASP ($)

3,755.3 10,994.0 342

4,087.5 11,531 354

4,455.2 12,115.3 368

4,718.7 12,578.7 375

4,963.6 12,986.8 382

5,384.4 13,523.3 398

5,925.4 14,193.0 417

6,488.8 14,957.4 434

7,334.3 15,904.8 461

8,263.3 16,865.0 490

9.2% 4.9% 4.1%

NEMA Revenues ($M) Units (k) ASP ($)

38.7 57.5 673

42.1 63.1 666

44.5 56.0 794

44.3 57.3 772

44.2 58.4 756

43.1 55.4 779

44.3 55.2 802

41.9 50.7 826

45.2 53.1 851

47.1 53.7 876

2.2% -0.7% 3.0%

3,793.9

4,129.6 8.8%

4,499.6 9.0%

4,763.0 5.9%

5,007.8 5.1%

5,427.5 8.4%

5,969.7 10.0%

6,530.7 9.4%

7,379.5 13.0%

8,310.4 12.6%

9.1%

Units (k) 11,051.4 11,594.5 12,171.2 12,636.0 13,045.2 13,578.6 14,248.2 15,008.1 15,957.9 16,918.7 4.9% 5.0% 3.8% 3.2% 4.1% 4.9% 5.3% 6.3% 6.0% Annua l Growth

4.8%

Revenues ($M) Annua l Growth

Source: IHS

July 2014

Jul-14

128

© 2014 IHS

IHS Technology

The World Market for Low Voltage Motors - 2014 Edition

Table 3.9

The EMEA Market for Low Voltage Motors By IEC Frame Size

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

CAGR 09 - 18

80-100 Revenues ($M) Units (k) ASP ($)

507.4 5,781.5 88

562.4 6,055.9 93

634.3 6,428.9 99

707.9 6,767.5 105

789.3 7,058.3 112

826.3 7,244.6 114

870.0 7,477.2 116

933.4 7,829.0 119

1,044.7 8,321.6 126

1,135.7 8,779.8 129

9.4% 4.8% 4.4%

112-132 Revenues ($M) Units (k) ASP ($)

832.2 3,411.8 244

904.0 3,617.0 250

986.3 3,746.6 263

1,037.8 3,940.7 263

1,087.0 3,986.1 273

1,220.9 4,231.9 289

1,340.6 4,498.2 298

1,466.6 4,777.9 307

1,687.4 5,112.3 330

1,869.5 5,378.8 348

9.4% 5.2% 4.0%

160-225 Revenues ($M) Units (k) ASP ($)

1,089.9 1,518.2 718

1,194.5 1,571.8 760

1,326.3 1,648.4 805

1,422.1 1,576.5 902

1,522.1 1,648.8 923

1,659.6 1,744.0 952

1,847.8 1,887.1 979

2,007.9 1,988.9 1,010

2,209.3 2,075.1 1,065

2,530.9 2,273.1 1,113

9.8% 4.6% 5.0%

250-355 Revenues ($M) Units (k) ASP ($)

1,024.4 269.2 3,805

1,076.5 272.5 3,950

1,149.9 277.0 4,151

1,193.7 279.8 4,267

1,207.6 279.5 4,321

1,291.9 288.3 4,481

1,455.6 315.4 4,616

1,641.1 345.8 4,746

1,896.7 378.8 5,007

2,174.4 415.2 5,237

8.7% 4.9% 3.6%

400-560 Revenues ($M) Units (k) ASP ($)

279.7 12.7 21,997

324.9 13.5 24,001

332.3 13.7 24,280

331.4 13.6 24,353

332.9 13.5 24,575

360.5 14.0 25,804

386.0 14.5 26,578

412.8 15.2 27,243

464.1 16.2 28,605

517.3 17.4 29,777

7.1% 3.5% 3.4%

630 & above Revenues ($M) Units (k) ASP ($)

21.8 0.55 39,471

25.2 0.65 38,783

26.0 0.64 40,597

25.7 0.59 43,500

24.7 0.57 43,137

25.1 0.57 44,143

25.5 0.57 44,959

26.9 0.58 46,126

32.0 0.67 47,949

35.4 0.73 48,807

5.5% 3.1% 2.4%

3,755.3

4,087.5 8.8%

4,455.2 9.0%

4,718.7 5.9%

4,963.6 5.2%

5,384.4 8.5%

5,925.4 10.0%

6,488.8 9.5%

7,334.3 13.0%

8,263.3 12.7%

9.2%

Units (k) 10,994.0 11,531.4 12,115.3 12,578.7 12,986.8 13,523.3 14,193.0 14,957.4 15,904.8 16,865.0 4.9% 5.1% 3.8% 3.2% 4.1% 5.0% 5.4% 6.3% 6.0% Annua l Growth

4.9%

Revenues ($M) Annua l Growth

Source: IHS

July 2014

Jul-14

129

© 2014 IHS

IHS Technology

The World Market for Low Voltage Motors - 2014 Edition

Figure 3.14

The EMEA Market for Low Voltage Motors By IEC Frame Size - Market Breakdown and Growth 1,800

14%

2013 Revenues

12%

Growth 2014

10%

Growth 2015

1,600

Revenues ($M)

1,200 1,000

8% 800

600

6%

Growth (%)

1,400

400

4% 200 0

2%

Source: IHS

Jul-14

Figure 3.15

The EMEA Market for Low Voltage Motors By IEC Frame Size - Revenue Growth Profiles - 2010 to 2018 20%

80-100 112-132

15%

Growth (%)

160-225 250-355

10%

400-560 5% 630 & above Total Market

0% 2010

2011

2012

2013

2014

2015

2016

2017

2018

-5%

Source: IHS July 2014

Jul-14 130

© 2014 IHS

IHS Technology

The World Market for Low Voltage Motors - 2014 Edition

Table 3.10

The EMEA Market for Low Voltage Motors By NEMA Frame Size

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

CAGR 09 - 18

56-145 Revenues ($M) Units (k) ASP ($)

9.5 34.5 276

10.0 37.5 268

11.1 29.0 382

10.3 29.3 351

10.3 30.9 333

10.2 29.3 348

10.4 29.0 359

10.0 26.9 370

10.6 28.1 379

11.0 28.3 388

1.6% -2.2% 3.9%

182-184 Revenues ($M) Units (k) ASP ($)

10.5 15.2 687

11.6 16.6 696

12.6 17.8 709

11.9 17.4 683

12.6 17.8 708

12.4 16.9 735

13.2 17.4 762

12.0 15.3 786

12.8 16.1 794

12.9 16.1 802

2.4% 0.6% 1.7%

213-215 Revenues ($M) Units (k) ASP ($)

7.5 5.0 1,489

8.4 5.8 1,460

9.0 6.0 1,500

9.9 6.8 1,464

9.5 6.0 1,588

9.3 5.7 1,635

9.4 5.5 1,717

9.5 5.4 1,765

10.2 5.7 1,800

10.7 5.9 1,818

4.0% 1.8% 2.2%

254-326 Revenues ($M) Units (k) ASP ($)

7.7 2.3 3,401

8.1 2.7 2,970

8.4 2.7 3,078

8.3 3.3 2,476

8.4 3.3 2,540

8.3 3.1 2,657

8.3 3.0 2,743

7.8 2.8 2,825

8.6 2.9 2,938

9.5 3.1 3,020

2.3% 3.6% -1.3%

364-449 Revenues ($M) Units (k) ASP ($)

3.4 0.4 8,372

3.9 0.5 8,094

3.4 0.4 8,070

3.9 0.5 8,168

3.3 0.4 8,254

2.9 0.3 8,633

2.9 0.3 8,911

2.5 0.3 9,179

2.9 0.3 9,362

3.0 0.3 9,643

-1.5% -3.0% 1.6%

5000 & above Revenues ($M) Units (k) ASP ($)

0.0 0.0 -

0.0 0.0 -

0.0 0.0 -

0.0 0.0 -

0.0 0.0 -

0.0 0.0 -

0.0 0.0 -

0.0 0.0 -

0.0 0.0 -

0.0 0.0 -

Revenues ($M) Annua l Growth

38.7

42.1 8.9%

44.5 5.7%

44.3 -0.4%

44.2 -0.2%

43.1 -2.4%

44.3 2.8%

41.9 -5.5%

45.2 7.9%

47.1 4.3%

2.2%

Units (k) Annua l Growth

57.5

63.1 9.9%

56.0 -11.3%

57.3 2.4%

58.4 1.9%

55.4 -5.2%

55.2 -0.2%

50.7 -8.3%

53.1 4.8%

53.7 1.2%

-0.7%

Source: IHS

July 2014

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Figure 3.16

The EMEA Market for Low Voltage Motors By NEMA Frame Size - Market Breakdown and Growth 14.0

10%

2013 Revenues

5%

Growth 2014

12.0

Growth 2015

0%

8.0 6.0

-5%

Growth (%)

Revenues ($M)

10.0

4.0 -10% 2.0 0.0

-15%

Source: IHS

Jul-14

Figure 3.17

The EMEA Market for Low Voltage Motors By NEMA Frame Size - Revenue Growth Profiles - 2010 to 2018 15% 56-145

10% 182-184

Growth (%)

5% 213-215

0% 2010

2011

2012

2013

2014

2015

2016

2017

2018 254-326

-5%

364-449 -10%

Total Market

-15%

Source: IHS July 2014

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Table 3.11

The EMEA Market for Low Voltage Motors By Sales Channel

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

CAGR 09 - 18

DIRECT SALES: Total Revenues ($M) Units (k) ASP ($)

3,400.7 10,114.2 336

3,712.9 10,623.6 349

4,055.8 11,166.6 363

4,309.0 11,603.7 371

4,548.7 12,009.5 379

4,925.3 12,499.8 394

5,404.5 13,086.9 413

5,898.1 13,742.1 429

6,658.0 14,578.3 457

7,492.9 15,456.1 485

9.2% 4.8% 4.1%

End-user Revenues ($M) Units (k) ASP ($)

508.7 1,076.2 473

543.8 1,106.0 492

580.1 1,154.1 503

605.0 1,177.5 514

620.3 1,213.6 511

660.6 1,236.1 534

730.8 1,291.5 566

788.6 1,352.1 583

911.3 1,461.6 623

1,053.3 1,583.4 665

8.4% 4.4% 3.9%

OEM Revenues ($M) Units (k) ASP ($)

2,892.0 9,038.0 320

3,169.1 9,517.7 333

3,475.7 10,012.5 347

3,704.1 10,426.2 355

3,928.4 10,795.9 364

4,264.7 11,263.7 379

4,673.7 11,795.5 396

5,109.6 12,390.0 412

5,746.7 13,116.7 438

6,439.6 13,872.6 464

9.3% 4.9% 4.2%

22.1 44.3 499

24.2 46.0 526

26.0 46.7 557

28.7 49.5 579

30.2 50.1 603

31.1 49.0 635

32.7 48.8 670

34.9 50.6 690

37.0 51.0 724

40.0 51.6 775

6.8% 1.7% 5.0%

System Integrator Revenues ($M) Units (k) ASP ($)

DISTRIBUTION SALES: Total Revenues ($M) Units (k) ASP ($)

356.9 865.4 412

377.4 896.0 421

401.6 928.8 432

408.3 951.3 429

411.6 953.9 432

453.6 999.3 454

514.1 1,081.7 475

577.9 1,183.2 488

663.0 1,295.2 512

752.8 1,375.2 547

8.6% 5.3% 3.2%

End-user Revenues ($M) Units (k) ASP ($)

207.4 470.8 440

218.0 486.0 449

233.7 503.0 465

238.7 520.0 459

240.0 521.3 460

262.1 540.8 485

288.8 567.8 509

312.6 594.8 526

350.8 635.7 552

396.6 672.0 590

7.5% 4.0% 3.3%

OEM Revenues ($M) Units (k) ASP ($)

149.5 394.6 379

159.4 410.0 389

167.9 425.8 394

169.6 431.3 393

171.6 432.6 397

191.5 458.4 418

225.4 513.8 439

265.3 588.4 451

312.2 659.5 473

356.2 703.3 507

10.1% 6.6% 3.3%

14.3 27.6 516

15.1 28.9 523

16.2 29.3 554

17.0 31.5 540

17.2 31.6 544

17.5 30.6 572

18.4 30.8 597

19.7 32.2 613

21.5 33.4 644

24.7 35.9 689

6.3% 2.9% 3.3%

3,793.9

4,129.6 8.8%

4,499.6 9.0%

4,763.0 5.9%

5,007.8 5.1%

5,427.5 8.4%

5,969.7 10.0%

6,530.7 9.4%

7,379.5 13.0%

8,310.4 12.6%

9.1%

15,008.1 15,957.9 16,918.7 5.3% 6.3% 6.0%

4.8%

System Integrator Revenues ($M) Units (k) ASP ($)

Revenues ($M) Annua l Growth

Units (k) 11,051.4 Annua l Growth

11,594.5 12,171.2 12,636.0 4.9% 5.0% 3.8%

13,045.2 13,578.6 14,248.2 3.2% 4.1% 4.9%

Source: IHS

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Figure 3.18

The EMEA Market for Low Voltage Motors By Sales Channel - Market Breakdown and Growth 4,500

20%

2013 Revenues

4,000 Growth 2014

15%

Growth 2015

3,000

2,500 10%

2,000

Growth (%)

Revenues ($M)

3,500

1,500 5%

1,000 500

0

0%

Source: IHS

Jul-14

Figure 3.19

The EMEA Market for Low Voltage Motors By Sales Channel - Revenue Growth Profiles - 2010 to 2018 18%

Direct to End-user

16%

Direct to OEM

14%

Direct to Sys Int

Growth (%)

12%

10%

Dist. to Enduser

8% Dist. to OEM 6% Dist. to Sys Int

4%

2%

Total Market

0% 2010

2011

2012

2013

2014

2015

Source: IHS July 2014

2016

2017

2018

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Table 3.12

The EMEA Market for Low Voltage Motors By Power Rating

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

CAGR 09 - 18

0.75-1.5kW (1-2HP) Revenues ($M) 1,066.0 Units (k) 6,434.9 ASP ($) 166

1,232.7 6,828.1 181

1,357.5 7,170.7 189

1,459.5 7,433.8 196

1,555.1 7,586.2 205

1,682.5 7,891.6 213

1,834.0 8,271.1 222

1,987.7 8,703.1 228

2,232.1 9,228.8 242

2,524.7 9,788.5 258

10.1% 4.8% 5.0%

2.25-3.75kW (3-5HP) Revenues ($M) 903.8 Units (k) 3,393.6 ASP ($) 266

954.9 3,486.7 274

1,045.2 3,668.2 285

1,100.1 3,818.4 288

1,180.0 4,039.7 292

1,294.3 4,206.0 308

1,454.1 4,416.2 329

1,601.9 4,647.1 345

1,821.2 4,951.7 368

2,063.7 5,261.7 392

9.6% 5.0% 4.4%

5.62-7.5kW (7.5-10HP) Revenues ($M) 653.5 Units (k) 842.2 ASP ($) 776

718.9 889.4 808

750.9 911.7 824

789.8 950.6 831

840.6 979.3 858

932.0 1,024.8 909

1,024.6 1,081.3 948

1,111.5 1,146.9 969

1,282.1 1,241.8 1,032

1,429.8 1,301.7 1,098

9.1% 5.0% 3.9%

11.25-37.5kW (15-50HP) Revenues ($M) 620.0 Units (k) 331.6 ASP ($) 1,870

644.1 340.1 1,894

706.3 366.8 1,926

756.5 380.3 1,989

769.3 387.1 1,987

834.9 402.8 2,073

912.6 423.0 2,158

983.3 446.4 2,203

1,071.1 466.7 2,295

1,216.0 495.1 2,456

7.8% 4.6% 3.1%

45-112.5kW (60-150HP) Revenues ($M) 194.5 Units (k) 33.9 ASP ($) 5,742

209.4 35.9 5,840

224.5 38.1 5,886

235.1 37.8 6,216

239.0 38.0 6,282

254.6 38.9 6,543

279.8 41.1 6,805

331.9 47.8 6,941

371.7 50.0 7,427

392.9 51.4 7,650

8.1% 4.7% 3.2%

150-375kW (200-500HP) Revenues ($M) 253.4 Units (k) 13.0 ASP ($) 19,501

257.7 12.1 21,346

284.4 13.1 21,690

293.0 12.5 23,407

300.6 12.5 24,049

308.6 12.3 25,033

346.1 13.3 26,034

382.2 14.4 26,555

450.8 16.3 27,723

510.2 17.5 29,109

8.1% 3.4% 4.6%

376kW & above (>500HP) Revenues ($M) 102.6 Units (k) 2.2 ASP ($) 46,096

111.8 2.3 49,697

130.9 2.6 50,136

128.9 2.5 51,976

123.2 2.3 53,794

120.6 2.2 54,992

118.5 2.1 56,340

132.2 2.3 57,355

150.5 2.5 59,093

173.1 2.8 61,778

6.0% 2.6% 3.3%

Revenues ($M) Annua l Growth

4,129.6 8.8%

4,499.6 9.0%

4,763.0 5.9%

5,007.8 5.1%

5,427.5 8.4%

5,969.7 10.0%

6,530.7 9.4%

7,379.5 13.0%

8,310.4 12.6%

9.1%

Units (k) 11,051.4 11,594.5 12,171.2 12,636.0 13,045.2 13,578.6 14,248.2 15,008.1 15,957.9 16,918.7 4.9% 5.0% 3.8% 3.2% 4.1% 4.9% 5.3% 6.3% 6.0% Annua l Growth

4.8%

3,793.9

Source: IHS

July 2014

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Figure 3.20

The EMEA Market for Low Voltage Motors By Power Rating - Market Breakdown and Growth 1,800

2013 Revenues

15%

1,600

Growth 2014

1,400

10%

Growth 2015

1,000

5% 800

Growth (%)

Revenues ($M)

1,200

600 0%

400 200

0

-5%

Source: IHS

Jul-14

Figure 3.21

The EMEA Market for Low Voltage Motors By Power Rating - Revenue Growth Profiles - 2010 to 2018 0.75-1.5kW (1-2HP)

20%

2.25-3.75kW (3-5HP)

15%

Growth (%)

5.62-7.5kW (7.5-10HP)

11.25-37.5kW (15-50HP)

10%

45-112.5kW (60-150HP)

5%

150-375kW (200-500HP) 0% 2010

2011

2012

2013

2014

2015

2016

2017

2018

376kW & above (>500HP) Total Market

-5%

Source: IHS July 2014

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Table 3.13

The EMEA Market for Low Voltage Motors By Enclosure Type

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

CAGR 09 - 18

3,486.8 10,340.3 337

3,802.1 10,864.6 350

4,136.4 11,407.2 363

4,382.7 11,847.8 370

4,614.9 12,248.3 377

5,013.9 12,762.2 393

5,530.3 13,403.7 413

6,061.4 14,127.0 429

6,875.3 15,052.3 457

7,768.0 15,984.9 486

9.3% 5.0% 4.1%

TEFC: non-hazardous Revenues ($M) 3,263.8 Units (k) 9,992.9 ASP ($) 327

3,549.0 10,442.6 340

3,849.1 10,958.3 351

4,057.8 11,246.7 361

4,260.3 11,650.1 366

4,637.9 12,144.1 382

5,126.8 12,767.7 402

5,629.2 13,467.2 418

6,399.9 14,376.2 445

7,244.1 15,293.5 474

9.3% 4.8% 4.2%

223.0 347.3 642

253.1 422.0 600

287.4 448.9 640

324.9 601.1 540

354.6 598.2 593

376.0 618.0 608

403.5 636.0 634

432.2 659.8 655

475.4 676.1 703

524.0 691.4 758

10.0% 7.9% 1.9%

Revenues ($M) Units (k) ASP ($)

19.9 51.7 385

21.0 52.9 397

22.3 54.5 409

23.6 57.0 414

24.1 54.3 444

24.9 53.3 468

26.5 53.9 491

28.1 55.5 506

30.7 57.5 533

33.5 59.4 563

5.9% 1.6% 4.3%

TENV: non-hazardous Revenues ($M) Units (k) ASP ($)

16.3 43.0 380

17.3 44.1 392

18.1 45.1 401

19.0 46.8 406

19.1 43.4 441

19.7 42.5 464

21.0 43.1 487

22.0 43.9 501

23.8 45.1 527

25.7 46.1 556

5.1% 0.8% 4.3%

TENV: hazardous Revenues ($M) Units (k) ASP ($)

3.6 8.7 407

3.7 8.8 420

4.2 9.4 447

4.6 10.2 451

5.0 10.9 455

5.2 10.8 482

5.5 10.8 506

6.1 11.6 522

6.9 12.4 554

7.8 13.3 587

9.1% 4.8% 4.1%

64.1 203.7 315

68.9 211.0 327

76.7 221.7 346

80.8 230.9 350

83.4 234.1 356

88.5 238.8 370

94.6 245.5 385

101.1 254.6 397

111.3 266.6 417

122.6 278.3 440

7.5% 3.5% 3.8%

Other: non-hazardous Revenues ($M) 223.1 Units (k) 455.7 ASP ($) 490

237.6 466.0 510

264.2 487.9 542

275.9 500.2 552

285.4 508.5 561

300.2 524.4 573

318.3 545.1 584

340.0 570.9 596

362.3 581.5 623

386.3 596.2 648

6.3% 3.0% 3.2%

4,129.6 8.8%

4,499.6 9.0%

4,763.0 5.9%

5,007.8 5.1%

5,427.5 8.4%

5,969.7 10.0%

6,530.7 9.4%

7,379.5 13.0%

8,310.4 12.6%

9.1%

15,008.1 15,957.9 16,918.7 5.3% 6.3% 6.0%

4.8%

TEFC: Total Revenues ($M) Units (k) ASP ($)

TEFC: hazardous Revenues ($M) Units (k) ASP ($) TENV: Total

ODP: non-hazardous Revenues ($M) Units (k) ASP ($)

Revenues ($M) Annua l Growth

3,793.9

Units (k) 11,051.4 Annua l Growth

11,594.5 12,171.2 12,636.0 4.9% 5.0% 3.8%

13,045.2 13,578.6 14,248.2 3.2% 4.1% 4.9%

Source: IHS

July 2014

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The World Market for Low Voltage Motors - 2014 Edition

Figure 3.22

The EMEA Market for Low Voltage Motors By Enclosure Type - Market Breakdown and Growth 5,000

12%

2013 Revenues

4,500 4,000

Growth 2014

10%

3,000

Growth 2015

8%

2,500

2,000

6%

Growth (%)

Revenues ($M)

3,500

1,500 1,000

4%

500 0

2%

Source: IHS

Jul-14

Figure 3.23

The EMEA Market for Low Voltage Motors By Enclosure Type - Revenue Growth Profiles - 2010 to 2018 15%

TEFC: nonhazardous TEFC: hazardous

12%

Growth (%)

TENV: nonhazardous 9% TENV: hazardous

ODP: nonhazardous

6%

Other: nonhazardous

3%

Total Market

0% 2010

2011

2012

2013

2014

2015

Source: IHS July 2014

2016

2017

2018

Jul-14 138

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Table 3.14

The EMEA Market for Low Voltage Motors Shares by Revenue

Company Name

2013 Share

1.

Siemens

17.0%

2

ABB

12.0%

3

Leroy Somer

5.5%

4

ATB Group

3.5%

5.

WEG

3.5%

6.

LEZ Ruselprom

3.0%

7.

VEM

3.0%

8.

Cantoni

2.5%

9.

Arҫelik

2.0%

Others

48.0%

Note 1: The market in 2013 was estimated to be worth $5,007.8 million. Note 2: Market shares were rounded ot the nearest 0.5%.

Source: IHS

July 2014

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Chapter Four

The Americas market for low-voltage motors  A slowdown to single-digit growth in 2013 for the region  Shale gas renaissance in North America  US Department of Energy includes more motor types in energy efficiency regulations in 2014  Exempt IE1 and IE2 low-voltage motors still significant in IE3 markets in 2013

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4.0 Introduction This chapter presents and analyzes consolidated market statistics for the Americas market for industrial low voltage integral horsepower motors with power ratings at or above 0.75kW/1HP. The statistics presented in this chapter are provide market sizes in terms of both revenues in millions of US dollars (represented as $M), and unit shipments in thousands (represented as ‘k’ units). The base year for the analyses is 2013, with forecasts from 2014 through 2018. Historical market sizes are provided for 2009 through 2012, for reference.

4.1 The Americas market for low-voltage motors The Americas market for LV motors was estimated to have been worth $5,047 million in 2013, with over 11.4 million units shipped during the year. The Americas region has rebounded quickly from the global recession when the region’s LV motor market experienced an estimated contraction of more than 21% in revenues during 2009. After a strong rebound in 2010 of over 22% revenue growth, the Americas LV motor market continued healthy growth in 2011 of 14.0%, followed by 14.1% growth in 2012. In 2013, the region grew at an estimated 9.2% revenue growth over 2012, accompanied by solid unit growth of 3.8%. Marking four years of consecutive strong growth in the post-recession era, the Americas market is currently benefitting from a strengthening US and Brazilian economy, and a shale gas renaissance due to “fracking” technologies that allows extraction of oil from previously hard-to-reach areas in the Earth’s crust. Also, signs of the return of the US manufacturing base have also fuelled new motor sales. The end of 2013 marked the US market’s third full year in the country’s regulated transition to IE3/NEMA Premium LV motors, while Brazil is in its fourth full year in the country’s regulated transition to IE2 LV motors. It is important to consider the revenue growth in the region was greatly enhanced by inorganic demand resulting from the US and Brazil’s ongoing transition to the next higher efficiency class of LV motor. As in all regions, the efficiency transition to higher efficiency LV motors has occurred slowly in the Americas. Evidence of this is conclusive in the form of reported data showing that in 2012 approximately 25% of a major US manufacturer LV motor product mix was still generated from IE1/Below EPAct motors. Below EPAct motors were required by law to be phased-out of manufacturers’ product lines starting in 1997. Canada’s official transition to IE3/NEMA Premium efficiency LV motors, regulated by the National Research Council (NRC), occurred on January 1 st, 2012. At the time this report was published, no official announcements have been made by any countries in the Americas concerning a future transition to higher efficiency LV motors. For the 2014 edition of this report, coverage of several smaller, but significant Latin American countries have been added to the country-level profile. Thusly, the market size for ‘Rest of Latin America’ has been reduced significantly from the 2013 edition. Most, if not all of the countries added are emerging economies with growing oil and gas and mining sectors. At the time this report was published, no energy efficiency regulations for LV motors existed in these countries, and there are not any such regulatory developments on the horizon. These countries can all be characterized similarly as they are primarily end-user markets with mostly IE1 motors being sold into the process sectors. The OEM/machine builder segment is almost non-existent in the region outside of the US, Brazil, and Mexico.

4.1.1 The Americas market for low-voltage motors by efficiency class Table 4.1 & Figures 4.1, 4.2 and 4.3

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The slow transition to IE3/NEMA Premium in the US LV motor market is a result of loopholes that exist in the current regulations that are being exploited, and legally allowing LV motors of lesser efficiency classes to be sold. Efforts by a group of US LV motor manufacturers and equipment providers, called the Motor Coalition, have addressed closing some of these loopholes in new proposed regulations that were brought before the US Department of Energy (US DOE) in mid-2014, with enactment of these new regulations expected in 2015. The same efforts (to close regulatory loopholes) are being addressed in the European Union (EU) as the EU has experienced the same issues in its transition to IE2 LV motors. IE1 LV motors have been on the rapid decline in the Americas, as there are only a handful of small South American countries that have no energy efficiency regulations where these motors can legally be sold. However, as mentioned, IE1 motors are still penetrating markets that have officially shifted to IE2 (Brazil) and IE3 (USA & Canada). During the year, revenues for this motor type accounted for 5.4% of the Americas market, down from over 10.5% in 2012. Low-digit growth can still be expected in Latin American countries with no energy efficiency regulations, yet having strong mining and oil and gas sectors. Due to the continual erosion of the IE1 market in the Americas, IHS as forecast this segment will significantly underperform against the market average of 12.6% CAGR, generating a negative CAGR of 13.2% for revenues through the end of the forecast period. IE2 LV motors accounted for over 18% of revenues in the Americas LV motor market in 2013, generating $928 million, with the majority of these LV motors being shipped to the Brazilian market with a significant portion being sold into IE3 markets of the US, Canada and Mexico. The IE2 market is expected to further decline through 2015 as the US is expected to have mostly completed its transition to IE3/NEMA Premium. It is interesting to note that while the IE2 market winds down in the North American market, it is simultaneously gaining momentum in the Brazilian market. The IE2 market is expected to continue to decline until 2015, at which point it will experience growth in tune with the Brazilian demand for IE2 motors. However, due to ongoing IE2 downturn in largest market in the region (the US), this market segment has a forecast CAGR of negative 1.6% for revenues through the end of the forecast period. In response to the US transition date of December 19 th, 2010 to IE3/NEMA Premium, revenues began to escalate in 2011, with this market segment more than tripling in terms of revenues and units by the end of 2013 from 2011 levels. As mentioned, the US market is officially IE3/NEMA Premium, but significant portions of the US market are still allocated to the two lower efficiency classes of motors in 2013. As such, this segment accounted for $3,307 million, or 65% of LV motor sales in the region, and 62% of units shipped during that year. IE3/NEMA Premium motors are sold into end-user markets of other countries than the US & Canada, but in insignificant quantities. The IE3/NEMA Premium market is forecast to be the fastest growing LV motor efficiency segment in the Americas, outperforming the market average of 12.6%, with a forecast CAGR for revenues of over 54% through 2018. IE4 (Super Premium Efficiency) have been officially defined by the IEC in early 2014, however, there has been no official designation of this efficiency class in North American standards bodies, including NEMA. LV motors generated $133 million in revenues, or representing almost 2.6% of the Americas market, and 1% of units shipped. The majority of these IE4 LV motors were neodymium-based permanent magnet (PM) motors from leading suppliers Baldor (now owned by ABB), Leroy Somer and Lafert Metric Motors. The majority of these LV motors sold into the US market are between 0.75kW–6.7kW (1–5HP). However, Baldor produces the highest power rated IE4 motors sold into the region. Brazil’s WEG introduced its neodymium-based IE4 product line into the US market in mid-2012. HICO, Hyosung Corporation’s American brand, will introduce a neodymium-based and copper rotor IE4 motor to the US market in late 2012. ABB’s Synchronous Reluctance (SynRM™) IE4 LV motor, which uses no magnets, has been introduced into the Western European market in late 2012, but has yet to be introduced to the Americas market. New ferrite magnet technologies that achieve IE4 levels of efficiency are also making headway in the Americas market. NovaTorque’s PremiumPlus+ LV motor is produced in the 0.75kW–4kW (1–3HP) range by the privately held company in California. NovaTorque’s proprietary design is basically a brushless DC motor, more specifically, an electrically commutated permanent magnet motor (ECPM). NovaTorque recently gained significant market traction with its first major partnering with a major US fan supplier, and is now endeavoring to expand its offering to include 5, 7.5 and 10HP (6.6, 10, and 13.3kW) power ratings. IE4 motors are primarily used for light motion applications such as Compressors, Pumps, Fans, Elevators & Lifts and air separation.

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The IE4 market in the Americas is expected to outperform the market average, generating a CAGR of 23% for revenues through the remainder of the forecast period. ‘Other, non-regulated’ motors made up the remainder of the region’s LV motor revenues and are expected to underperform the market average at 10.3% CAGR for revenues. Despite the overall transition to AC induction motors on a global scale resulting in the slow erosion of the global DC market, the Americas region remains the largest market for DC motors in the world. This is especially true in the US, where antiquated DC motor systems are still present in steel rolling and pulp and paper mills and other “mill motor” sectors that have a sustained a replacement market for legacy DC machinery. The DC market in the Americas is estimated to be worth $62 million in 2013, down from an estimated $103 million in the previous year. Baldor and GE are two of the largest suppliers of integral horsepower DC machines in the Americas market, most of which are brushless DC motors supplied to the US market. However, as in other regions, the DC motor market is expected to continue to decline sharply in the Americas during the forecast period. TMEIC and other LV motor manufacturers have been aggressive in addressing the DC-to-AC “mill motor” market in the US and other regions by developing a ‘drop-in’ AC induction product designed to DC specifications, which results in minimal redesign of the entire motor system. IHS expects the efficiency transitions occurring slowly in the Americas market to be in its advanced stages by the end of 2014, as historical data shows that efficiency transitions to the next higher efficiency class of LV motors usually takes 3-5 years. However, IHS does not expect that a 100% transition to the next higher efficiency class will ever be realistically achieved. It can be assumed that all efficiency classes will coexist to some degree in each market regardless of the efficiency regulations in place.

4.1.2 The Americas market for low-voltage motors by region Tables 4.2 & Figures 4.4 and 4.5

United States The US recovery lost some momentum in 2013 because of massive fiscal tightening. The drag from fiscal policy will probably be far less significant over the coming year, especially in light of the mid-December budget deal made by the US Congress. This deal will allow the underlying strengths of the economy to become more visible. These include continued strength in housing and the ripple effects of the unconventional oil and gas boom from tapping shale deposits. IHS also expects that the pace of capital spending will gain momentum, making it one of the engines of growth in 2014. IHS currently forecasts real GDP growth to accelerate from 1.8% in 2013 to 2.5% in 2014. The agricultural sector is among the most capital-intensive in the world, as the grain baskets of the Midwest help make the economy the largest cereal producer in the world. There are substantial mineral deposits of almost all key minerals within the country, but not enough to ensure self-sufficiency. Aluminum is the most substantial mined product, accounting for about 17% of the global total. Iron, copper, lead, silver, and gold deposits are other major mining products. The United States is the world's third-largest oil producer and largest single energy market. US oil production meets around 40% of total domestic oil demand, which accounts for more than 25% of global consumption of oil, natural gas, coal, and nuclear energy, and ranks first in the global production of coal and nuclear energy. The country has the world's largest reserves of coal, which provide more than 50% of its electricity generation needs. Within the oil & natural gas sector, pipeline infrastructure and LNG ports and tankers represent growth opportunities, with MV motor sales into pipelines projected to occur early in the forecast period. The growth of MV motor sales into LNG is dependent on pipelines reaching the coasts of the United States and Canada, as this dynamic would be expected to result in increased sales into pipeline applications such as compressors and pumps for natural gas and oil transportation. Although this report covers only IHP LV motors, it is interesting to note that in 2010, the US Department of Energy (US DOE) extended the IHP LV motor efficiency standards established by the National Electrical Manufacturers Association (NEMA) to fractional horsepower motors (FHP). Fractional horsepower motors are 3 axis Rubber & plastics machinery manufacturing Rubber machinery manufacturing Plastics machinery, plastic injection machinery Semiconductor machinery manufacturing Machinery for textile, apparel & leather production Sawmill, veneer, plywood woodworking machinery

Source: IHS

July 2014

Machinery for cement & glass production Commercial & service industry machinery Construction Machinery Manufacturing PCB assembly, automatic soldering & removal equip. EPOS, EFT & automatic ID equipment Flat panel display machinery manufacturing Medical, surgical equipment & orthopedic appliances Rolling mill, metalworking, metallurgy machinery Machinery for mining manufacturing Oil & gas field equipment manufacturing Manufacturing of wind turbines

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Appendix 3, Table 1.2

Correlation of Discrete Industry Sectors With those Used in ISIC, NAICS, NACE Discrete Industries

ISIC

NAICS

NACE

Description

Marine Marine Industry

301

3366

30.1

Ship & boat building

Military & Aerospace Military Equipment Aerospace Equipment

304 303

336992 3364

30.4 30.3

Military armored vehicle & weapons manufacturing Aerospace product & parts manufacturing

Rolling Stock Locomotive/Rolling Stock Industry

302

3365

30.2

Manufacture of railway locomotives & rolling stock

Note: Codes provided correlate to the following editions: ISIC Rev 4, NAICS 2012, NACE 2008.

Source: IHS

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Appendix Four - IHS GDP and machinery production forecasts Table 1. Americas

IHS GDP Forecasts % Annual Growth 2007 - 2019

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

Brazil Canada Mexico & Central America Rest of South America US

6.1% 2.0% 3.9% 6.4% 1.8%

5.2% 1.2% 2.0% 4.0% -0.3%

-0.3% -2.7% -3.7% -0.3% -2.8%

7.5% 3.4% 4.7% 4.7% 2.5%

2.7% 2.5% 3.9% 6.2% 1.8%

1.0% 1.7% 3.7% 3.6% 2.8%

2.3% 2.0% 1.7% 3.4% 1.9%

1.5% 2.2% 2.8% 1.4% 2.2%

2.5% 2.4% 4.1% 2.4% 3.1%

3.5% 2.7% 4.0% 3.8% 3.4%

3.8% 2.6% 4.0% 4.1% 3.3%

3.8% 2.5% 3.6% 4.1% 2.8%

3.8% 2.5% 3.6% 4.1% 2.8%

Americas

2.6%

0.7%

-2.5%

3.3%

2.4%

2.6%

2.0%

2.1%

3.0%

3.4%

3.4%

3.0%

3.0%

Source: IHS

Jun-14

Table 2. Europe

IHS GDP Forecasts % Annual Growth 2007 - 2019

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

Austria Belgium Czech Republic Denmark Finland France Germany Greece Hungary Italy Netherlands Norway Poland Portugal Spain Sweden Switzerland Turkey UK & Ireland Rest of Europe & CIS (exc Czech Rep & Hungary) Rest of Europe & CIS

3.7% 2.9% 5.7% 1.6% 5.3% 2.3% 3.4% 3.5% 0.1% 1.5% 3.9% 2.7% 6.8% 2.4% 3.5% 3.4% 3.8% 4.7% 3.6%

0.9% 1.0% 2.9% -0.8% 0.3% 0.1% 0.8% -0.2% 0.7% -1.2% 1.8% 0.0% 5.1% 0.0% 0.9% -0.8% 2.2% 0.7% -0.9%

-3.5% -2.8% -4.4% -5.7% -8.5% -2.9% -5.1% -3.1% -6.7% -5.5% -3.7% -1.4% 1.6% -2.9% -3.8% -5.0% -1.9% -4.8% -5.3%

1.9% 2.3% 2.3% 1.4% 3.4% 1.9% 3.9% -4.9% 1.0% 1.7% 1.5% 0.6% 3.9% 1.9% -0.2% 6.3% 3.0% 9.2% 1.4%

2.9% 1.8% 1.8% 1.1% 2.8% 2.1% 3.4% -7.1% 1.6% 0.6% 1.0% 1.1% 4.5% -1.3% 0.1% 3.0% 1.8% 8.8% 1.2%

0.7% -0.1% -0.9% -0.4% -1.0% 0.4% 0.9% -7.0% -1.7% -2.4% -1.3% 2.8% 2.0% -3.2% -1.6% 1.3% 1.0% 2.1% 0.3%

0.4% 0.2% -0.9% 0.4% -1.4% 0.4% 0.5% -3.9% 1.2% -1.8% -0.8% 0.7% 1.6% -1.4% -1.2% 1.6% 2.0% 4.0% 1.5%

1.5% 1.3% 2.5% 1.2% 0.2% 0.6% 2.1% 0.3% 2.5% 0.3% 0.6% 1.2% 3.1% 0.8% 0.9% 2.0% 1.9% 3.3% 3.0%

2.0% 1.9% 2.8% 1.8% 1.3% 1.3% 2.0% 1.7% 2.7% 1.1% 1.6% 1.3% 3.4% 1.3% 1.4% 2.2% 2.2% 3.4% 2.7%

1.8% 2.3% 3.3% 2.2% 2.1% 1.7% 1.7% 1.5% 3.0% 1.2% 1.9% 1.5% 3.8% 1.5% 1.6% 2.3% 1.7% 3.6% 2.7%

1.6% 2.0% 3.9% 2.2% 2.4% 2.0% 1.7% 2.1% 3.5% 1.1% 1.8% 1.8% 4.2% 1.9% 1.9% 2.2% 1.3% 4.1% 2.4%

1.7% 2.1% 3.8% 1.9% 2.1% 1.8% 1.5% 2.3% 4.0% 1.1% 1.9% 1.8% 4.3% 1.8% 1.9% 1.9% 1.3% 4.2% 2.3%

1.7% 2.1% 3.8% 1.9% 2.1% 1.8% 1.5% 2.3% 4.0% 1.1% 1.9% 1.8% 4.3% 1.8% 1.9% 1.9% 1.3% 4.2% 2.3%

8.4%

5.0%

-6.9%

3.8%

4.1%

2.7%

1.8%

1.1%

2.3%

3.1%

7.8%

4.6%

-6.7%

3.6%

3.8%

2.3%

1.6%

1.2%

2.3%

3.1%

3.8% 3.8%

3.7% 3.7%

3.7% 3.7%

Europe

3.8%

0.9%

-4.6%

2.5%

2.2%

0.3%

0.5%

1.5%

2.0%

2.2%

2.3%

2.2%

2.2%

Source: IHS

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Table 3. Asia Pacific

IHS GDP Forecasts % Annual Growth 2007 - 2019

China India Japan Malaysia Oceania Singapore South Korea Taiwan Thailand Rest of Asia (exc Malaysia) Rest of Asia (inc Malaysia)

Asia Pac Asia Pac (ex Japan)

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

14.2% 9.8% 2.2% 6.3% 4.4% 9.0% 5.5% 6.0% 5.0% 6.4% 6.4%

9.6% 3.9% -1.1% 4.8% 2.4% 1.9% 2.8% 0.7% 2.5% 4.7% 4.7%

9.2% 8.5% -5.5% -1.5% 1.5% -0.6% 0.7% -1.8% -2.3% 2.9% 2.4%

10.5% 10.3% 4.7% 7.4% 2.2% 15.1% 6.5% 10.8% 7.8% 6.2% 6.3%

9.3% 6.6% -0.4% 5.1% 2.5% 6.0% 3.7% 4.2% 0.1% 5.9% 5.8%

7.7% 4.7% 1.4% 5.6% 3.6% 1.9% 2.3% 1.5% 6.5% 5.5% 5.5%

7.7% 5.0% 1.5% 4.7% 2.4% 4.1% 3.0% 2.1% 2.9% 5.7% 5.5%

7.3% 5.4% 1.4% 5.4% 3.0% 3.3% 3.6% 3.3% 1.8% 5.4% 5.4%

7.1% 6.2% 1.3% 5.3% 2.7% 4.1% 3.7% 3.8% 3.7% 5.7% 5.7%

7.2% 6.5% 0.9% 5.1% 2.9% 4.1% 3.7% 4.2% 4.2% 5.8% 5.7%

7.4% 7.3% 1.5% 4.7% 2.8% 4.2% 3.5% 4.0% 4.2% 5.4% 5.3%

7.6% 7.4% 1.4% 4.7% 2.8% 4.2% 3.5% 3.6% 4.2% 5.2% 5.1%

7.6% 7.4% 1.4% 4.7% 2.8% 4.2% 3.5% 3.6% 4.2% 5.2% 5.1%

6.9% 9.6%

3.5% 5.9%

1.9% 5.5%

7.4% 8.5%

4.6% 6.8%

4.6% 5.8%

4.6% 5.8%

4.6% 5.8%

4.7% 5.9%

4.8% 6.0%

5.0% 6.2%

5.2% 6.3%

5.2% 6.3%

Source: IHS

Jun-14

Table 4. Aggregated Regions

IHS GDP Forecasts % Annual Growth 2007 - 2019

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

Austria & Switzerland Benelux Central & Eastern Europe EMEA Middle East & Africa Nordic Countries Russian Federation & CIS Spain & Portugal

3.8% 3.6% 6.6% 4.1% 6.0% 3.1% 8.9% 3.3%

1.6% 1.4% 4.1% 1.6% 5.6% -0.3% 5.2% 0.8%

-2.6% -3.4% -7.6% -3.5% 2.4% -4.7% -6.7% -3.7%

2.5% 1.8% 0.0% 3.0% 5.4% 2.9% 4.8% 0.1%

2.2% 1.3% 2.3% 2.4% 3.2% 2.0% 4.5% -0.1%

0.9% -0.8% 0.4% 0.9% 3.9% 1.0% 3.3% -1.9%

1.3% -0.3% 1.6% 1.0% 3.1% 0.6% 1.9% -1.2%

1.7% 0.9% 1.8% 1.9% 3.7% 1.3% 0.9% 0.8%

2.1% 1.8% 2.7% 2.4% 4.6% 1.7% 2.2% 1.4%

1.8% 2.1% 3.4% 2.7% 5.3% 2.0% 3.1% 1.6%

1.4% 1.9% 3.6% 2.9% 5.2% 2.1% 3.8% 1.9%

1.4% 2.0% 3.8% 2.7% 4.9% 1.9% 3.7% 1.9%

1.4% 2.0% 3.8% 2.7% 4.9% 1.9% 3.7% 1.9%

World

4.3%

1.8%

-1.7%

4.3%

3.1%

2.5%

2.4%

2.8%

3.3%

3.6%

3.7%

3.6%

3.6%

Source: IHS

Jun-14

Table 1. Americas

MP FORECASTS % Annual Growth 2007 - 2019

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

Brazil Canada Mexico & Central America Rest of South America US

9.2% 7.2% 8.3% 6.6% 9.2%

7.3% 4.6% 7.4% 5.6% 4.8%

-16.4% -17.6% -19.6% -11.7% -21.1%

15.1% 5.7% 7.9% 6.2% 17.9%

8.2% 11.7% 8.7% 8.1% 12.5%

-3.9% 7.6% 5.8% 2.7% 7.2%

4.2% 0.6% 4.1% 4.2% 1.9%

4.2% 3.5% 5.7% 4.1% 3.6%

3.4% 3.9% 5.0% 3.5% 4.9%

5.5% 4.6% 4.0% 4.1% 3.9%

4.6% 3.9% 5.2% 4.8% 3.3%

4.0% 3.1% 4.7% 4.0% 3.5%

3.8% 3.3% 4.3% 3.6% 3.9%

Americas

9.0%

4.9%

-20.3%

16.1%

12.1%

6.6%

1.9%

3.6%

4.7%

4.0%

3.5%

3.5%

3.8%

Source: IHS

July 2014

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Table 2. Europe

MP FORECASTS % Annual Growth 2007 - 2019

Austria Belgium Czech Republic Denmark Finland France Germany Greece Hungary Italy Netherlands Norway Poland Portugal Spain Sweden Switzerland Turkey UK & Ireland Rest of Europe & CIS (exc Czech Rep & Hungary) Rest of Europe & CIS

Europe

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

7.5% 6.3% 15.9% 11.7% 10.6% 4.1% 9.4% 3.5% 13.8% 3.5% 4.1% 6.8% 13.7% 2.7% 5.0% 4.2% 2.8% 14.2% 2.1%

8.4% 2.2% 17.7% -4.0% 2.9% 0.9% 3.7% -16.2% 9.1% 1.7% 0.2% 16.6% 12.1% -0.3% -7.2% 0.3% -2.0% 3.2% -1.6%

-23.0% -25.4% -27.7% -25.3% -27.5% -18.1% -24.1% -27.0% -22.5% -16.0% -13.3% 4.2% -8.8% -4.2% -26.7% -35.3% -14.2% -10.4% -23.4%

6.5% -0.7% 13.7% -1.6% 9.8% 6.3% 14.6% -17.9% 41.5% 12.3% 17.1% 4.1% 12.6% -2.5% -4.3% 9.5% 8.1% 16.9% 12.0%

13.5% 12.2% 10.5% 13.5% 9.1% 6.0% 11.3% -8.0% 39.5% 8.7% 7.0% 6.4% 12.4% 4.0% 6.1% 17.5% 11.4% 22.1% 9.7%

5.2% -4.1% 2.5% 1.5% 0.5% -1.4% 1.1% -13.3% 1.9% -6.8% -3.7% 6.2% 3.8% -4.2% -1.2% -5.6% -7.7% 2.8% 2.1%

-0.9% -2.6% 2.8% 8.9% -5.0% -2.8% -1.2% 4.5% -0.8% -5.7% 0.1% 14.4% 0.3% -0.8% 0.2% -9.7% -2.5% 7.3% -11.6%

4.9% 2.1% 8.7% 3.2% 3.5% 2.6% 4.9% -3.2% 11.5% 2.5% 2.6% 4.9% 3.9% 1.8% 3.5% 4.4% 3.5% 6.6% 4.4%

4.2% 3.5% 9.8% 4.1% 4.5% 3.8% 3.6% 1.6% 11.2% 3.0% 4.0% 3.7% 7.0% 3.0% 4.1% 2.9% 4.0% 7.5% 2.3%

4.4% 3.7% 8.6% 4.8% 5.4% 3.7% 3.2% 2.7% 9.7% 3.7% 3.7% 4.4% 7.6% 2.5% 3.5% 4.4% 2.8% 6.6% 2.8%

3.9% 2.8% 9.1% 3.0% 3.4% 4.4% 3.9% 4.4% 11.0% 2.5% 4.0% 3.5% 7.1% 3.3% 4.4% 3.0% 2.5% 7.1% 2.8%

3.5% 2.5% 7.8% 2.1% 3.9% 3.7% 3.0% 4.7% 11.8% 2.0% 3.6% 3.2% 6.2% 2.8% 3.2% 2.8% 2.0% 6.0% 2.3%

3.8% 3.0% 7.4% 2.6% 2.7% 3.4% 3.3% 5.4% 10.7% 2.3% 3.3% 3.9% 6.6% 2.5% 3.0% 2.6% 1.7% 5.6% 2.0%

5.7%

7.7%

-12.4%

8.8%

11.6%

6.0%

4.4%

4.5%

4.2%

4.8%

4.5%

4.0%

3.6%

7.5%

9.0%

-15.3%

12.4%

14.7%

5.1%

3.5%

5.8%

5.8%

5.9%

6.0%

5.7%

5.2%

6.4%

2.1%

-20.5%

10.7%

10.6%

-0.6%

-2.0%

4.1%

3.9%

3.9%

4.0%

3.3%

3.3%

Source: IHS

Jun-14

Table 3. Asia Pacific

MP FORECASTS % Annual Growth 2007 - 2019

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

China India Japan Malaysia Oceania Singapore South Korea Taiwan Thailand Rest of Asia (ex Malaysia) Rest of Asia (inc Malaysia)

26.7% 4.5% 2.8% 7.9% 4.4% 10.8% 9.4% 16.9% 9.1% 6.6% 6.6%

21.1% 7.8% -5.0% 3.4% 2.1% -1.9% 0.5% -12.1% 6.6% 4.3% 4.3%

11.0% 7.2% -39.8% -20.1% -14.8% -14.0% -13.9% -31.1% -20.4% -11.5% -11.5%

31.2% 17.8% 38.4% 13.9% 9.6% 42.7% 19.8% 45.4% 21.2% 12.6% 12.6%

22.0% 13.0% 11.3% 9.0% 0.9% 14.0% 11.4% 8.4% -11.1% 10.1% 10.1%

4.3% -6.8% -6.2% 5.3% 4.8% 3.4% 1.8% -11.6% 7.4% 5.2% 5.2%

7.9% -7.8% 0.1% 4.5% 4.0% 7.7% 6.2% -5.5% 8.4% 4.6% 4.6%

7.8% 3.2% 6.7% 6.1% 3.9% 6.7% 6.9% 6.5% 4.8% 5.0% 5.0%

10.6% 5.4% 3.6% 5.5% 4.4% 7.8% 8.5% 6.0% 6.9% 4.9% 4.9%

9.5% 5.7% 3.0% 4.9% 3.4% 7.2% 7.0% 6.4% 6.3% 5.1% 5.1%

8.8% 6.5% 3.8% 4.4% 3.9% 6.2% 6.1% 4.4% 6.8% 4.6% 4.6%

7.9% 7.5% 2.6% 4.1% 3.1% 6.9% 5.8% 4.0% 5.8% 4.3% 4.3%

7.8% 8.1% 2.2% 3.9% 2.5% 6.3% 5.4% 3.6% 5.3% 4.5% 4.5%

Asia Pac Asia Pacific (ex Japan)

11.2% 18.2%

3.8% 10.2%

-15.4% -0.1%

31.5% 28.9%

15.9% 17.7%

-0.2% 2.1%

4.3% 5.7%

7.1% 7.2%

8.0% 9.4%

7.2% 8.6%

6.9% 7.9%

6.2% 7.3%

6.1% 7.1%

Source: IHS

July 2014

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© 2014 IHS

IHS Technology

The World Market for Low Voltage Motors - 2014 Edition

Table 4. Aggregated Regions

MP FORECASTS % Annual Growth 2007 - 2019

Austria & Switzerland Benelux Central & Eastern Europe EMEA Middle East & Africa Nordic Countries Russian Federation & CIS Spain & Portugal

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

5.1% 4.9% 7.2% 6.4% 0.0% 8.0% 4.8% 4.8%

3.2% 0.9% 5.4% 2.1% 0.0% 1.8% 3.4% -6.7%

-18.8% -17.6% -5.1% -20.5% 0.0% -26.3% -12.8% -25.1%

7.3% 11.4% 2.2% 10.7% 0.0% 6.4% 8.3% -4.1%

12.4% 8.5% 8.7% 10.6% 0.0% 12.3% 5.6% 5.9%

-1.2% -3.8% -0.9% -0.6% 0.0% -0.6% 5.3% -1.5%

-1.6% -0.7% 3.3% -2.0% 0.0% -0.7% 5.1% 0.1%

4.3% 2.5% 0.9% 4.1% 0.0% 4.0% 4.9% 3.4%

4.1% 3.9% 4.8% 3.9% 0.0% 3.8% 4.7% 4.0%

3.7% 3.7% 6.5% 3.9% 0.0% 4.8% 4.7% 3.4%

3.3% 3.7% 3.2% 4.0% 0.0% 3.2% 4.7% 4.3%

2.8% 3.3% 3.2% 3.3% 0.0% 3.1% 0.0% 3.2%

2.9% 3.2% 4.1% 3.3% 0.0% 2.9% 0.0% 3.0%

Source: IHS

July 2014

Jun-14

232

© 2014 IHS