Southeast Asia Emerges As An Investment Hotspot For Both Manufacturers And End Users Of Low-voltage IHP Motors, Finds Frost & Sullivan
SINGAPORE, Jan. 1, 2013 /PRNewswire/ -- Southeast Asia is a developing region; all industries are demonstrating high growth rates. Its large population, low costs of production, and investment-friendly government policies attract not only manufacturers, but also end users of various industries. This creates a fertile market for low-voltage integral horsepower (LV IHP) motors.
New analysis from Frost & Sullivan ( http://www.motors.frost.com), Analysis of the Southeast Asian Low-voltage Integral Horsepower Motors Market, finds that the market earned revenues of $432.3 million in 2012 and estimates this to reach $576.3 million in 2017 through investments from end-user industries such as oil and gas, heating, ventilation, and air conditioning (HVAC), as well as chemicals and petrochemicals.
Due to the higher production costs in China, foreign investors are tilting toward Vietnam and Indonesia. Singapore's strategic location and business-friendly environment also attract investors to start-up manufacturing units. End-user segments with the highest demand for LV IHP motors are automotive, oil & gas, power and petrochemicals.
Customers primarily look for competitive prices and motor quality when purchasing an LV IHP motor. Ultimately, they tend to pick quality over price at the time of purchase."End users are also attracted to energy-efficient motors; therefore, new products and technology in energy-saving systems are expected to drive the market," said Frost & Sullivan Senior Research Analyst Vandhana Venkatesan. "Due to sustainable development, long-term savings on maintenance costs is one of the main reasons for the boom in energy efficiency motors." While the benefits of LV IHP motors are many, market saturation has intensified competition, which, in turn, has led to price wars and shrunken profit margins for manufacturers. They are also facing pricing pressures from low-cost regional and Chinese manufacturers. Due to their domestic economic instability, countries such as the Philippines and Vietnam tend to favor these products, despite their poor quality. "Notwithstanding this competition from low-cost manufacturers, domestic participants can stay afloat by providing high-quality, reliable, energy-efficient products," noted Venkatesan. "Reduced lead time and effective aftersales support will give manufacturers an added edge over their competitors."
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts