IMS Research forecasts that the Chinese market for low-voltage integral horsepower AC motors will nearly triple in revenues to $7.9 billion in 2016 from 2010. Unit shipments are expected to grow annually at double-digit rates, reaching 22.6 million units in 2016. The robust revenue growth will be driven by local power-saving legislation mandating sales of higher-efficiency, and thus more expensive motors, according to a new report, The Chinese Market for Low Voltage AC Motors - 2011 Edition from IMS Research.
US and Canada lead the world in motor efficiency standards, a major transition to IE3 Premium Efficiency having already occurred by the end of 2010. Analyst Wilmer Zhou states "China is far behind North America. We are starting to see how government directives for improved motor efficiencies will result in leveling the playing field for motor manufacturers in China. The Chinese motor manufacturers are required to change to selling IE2 motors in July 2011." Wilmer adds, "While this might seem to make it harder to enter the motor market and to eliminate many low-end motor suppliers, all industries will benefit greatly from improved motor efficiency leading to a significant reduction in energy costs, which is the prime objective of the legislation".
With the shift from IE1 to IE2, motors sold in China will be more expensive than in the past, since IE2 efficiency-class motors have prices more than 30% higher than those of IE1 Standard Efficiency motors. IMS Research estimates that market revenues for IE2 motors will double in 2011. The international companies and leading local suppliers such as ABB, Siemens, Teco, Huali, Nanyang - Explosion, Jiamusi, Hebei and Jinlong will lead the charge in China.
The IE1 market segment will still dominate, with over 60% share of revenues until 2013 in the Chinese low voltage AC motor market. The biggest shift will happen in 2014 and 2015. The IE2 High efficiency market segment will take the lion's share of revenues in 2016. Wilmer states, "By 2016, the IE2 market is expected to account for 75% of Chinese low voltage AC motor revenues".
In addition, China, with the big advantages in the rare earth mineral market, is expected to become the leading producer and consumer of permanent magnet motors. With the legislative rebates, the permanent magnet motor will be the fastest growing of the low-voltage AC motor types in China, with nearly 80% CAGR from 2010 to 2016.