The global low voltage (LV)
and medium voltage (MV) switchgear market is characterized by intense
price-based competition. As per a new study by Transparency Market
Research (TMR), competition is expected to intensify further as local
players aim for a larger presence in developed markets by providing
affordable and efficient LV and MV switchgear. In Asia Pacific, which
is an attractive market for LV and MV switchgear, Schneider Electric
SE held a dominant share of 16.1% in terms of value in 2015, reports
TMR. The top three players in Asia Pacific cumulatively held more
than 37% of the market.
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The Press Release:
http://www.transparencymarketresearch.com/pressrelease/lv-mv-switchgear-industry.htm
“Owing to the prevalence of
intense price-based competition, the bottom line growth of
enterprises will remain more or less stagnant despite them witnessing
persistent top line growth at an individual level,” says a lead
analyst at TMR.
Urban
Sprawl Augurs Well for LV and MV Switchgear Sales
The rising demand for enhanced
protection in electricity distribution systems makes the deployment
of advanced LV and MV switchgear imperative. Besides this, the demand
for switchgear is also expected to increase in response to the rapid
urbanization and infrastructural development witnessed worldwide.
“With governments of emerging nations such as Indonesia, India, and
China increasingly investing in rural development and urbanization,
the construction of electricity transmission and distribution
networks and upgrades on existing ones are on the cards. This will
stimulate the demand for LV and MV switchgear in the short term,”
added an analyst at TMR.
Across several nations
worldwide, obsolete transmission and distribution networks have
emerged as a major concern. Policy makers are thus compelled to focus
on renewing the old transmission networks for better performance.
This in turn boosts opportunities for the LV and MV switchgear
market.
Increasing
Price-based Competition Puts Pressure on Revenue Stream
Despite the growth witnessed
by the market being largely positive, the prevalence of intense
price-based competition between local and established players creates
a major bottleneck. This is particularly true in case of emerging
economies, where local players give tough competition to their
established counterparts by providing quality products at affordable
price. The prevalence of such intense competition is likely to
negatively influence the trajectory of the switchgear market.
Furthermore, the easy
availability of substitutes is also holding back the market’s
growth. The rampant counterfeiting of the low voltage switchgear
technology creates major challenges for the market. These items are
generally available in the market at cheaper prices, which in turn
adversely impacts the market’s growth trajectory.
Growing
Investment in Infrastructure to Boost Sales of LV and MV Switchgear
Nevertheless, countries
located in the Asian sub-continent and Africa will create new
opportunities for companies to explore in the near future. The
increasing investment in infrastructural and industrial development
in these countries will accelerate the demand for LV and MV
switchgear. The sale of LV and MV switchgear is also expected to
increase due to the rising demand for renewable energy in developed
economies.
Asia
Pacific Emerges as Leading Market for LV and MV Switchgear
Accounting for a dominant
share of 41.5% in 2015, Asia Pacific emerged as the leading market
for LV and MV switchgear globally in 2015. North America followed
APAC in 2015. With countries in North America increasingly focusing
on renewable energy to curb carbon emissions, the demand for LV and
MV switchgear is expected to remain high through the forecast period.
Based on application, the power and utilities sectors accounted for
the leading share in the global market.
The global LV and MV
switchgear market stood at US$56.23 bn in 2015. The market is
expected to reach US$98.80 bn by the end of 2024. This translates to
a CAGR of 6.8% by value between 2016 and 2024. By volume, the market
is expected to rise at a CAGR of 5.7% during the forecast period to
reach 3,874.2 thousand units by 2024.
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