Asia Pacific Provides Boost to Worldwide Electric Motors in Automotive Applications Market in 2015
The worldwide revenue for electric motors in automotive applications is expected to increase to over $30 billion in 2019, up from $25 billion in 2014, according to IHS Inc. (NYSE: IHS). Among the major global regions, Asia Pacific will lead in growth to 2019 through increased automotive production and sales, culminating in revenue increases of 15.4%.
India and China will be the two fastest-growing markets in Asia Pacific for electric motors in automotive applications from 2014 to 2019, with CAGRs of 8.7% and 7.8%, respectively. However, these countries have different drivers; the Chinese market is driven by environmental awareness whereas the Indian market is driven by its economic transformation.
In terms of unit shipments and revenue, China remained the largest market for electric motors used in automotive applications in 2014. The aftermath of the Tianjin Port explosion caused some capacity losses in China’s automotive manufacturing; however, this has affected close to only 1% of the Chinese electric motor market used for automotive applications. Despite the Chinese yuan devaluation and the recent Tianjin Port blast, the market outlook remains strong in 2015.
In the midst of severe environmental issues in China, the government is imposing legislative regulations for fuel economy and emission control. Automotive component electrification and downsizing are among the effective approaches to achieving the fuel efficiency standard in a vehicle, and the electric motor will play a big part as well. China is among the countries with the fewest number of motors per car, and the majority of cars sold in China are not automated to the same extent as cars in Europe and North America. Despite the growing middle class and opportunities for further electrification of cars and SUVs, the implementation of a car-plate auction system in the region could limit regional carmakers’ sales potential in China.
Meanwhile, India is rapidly emerging as a global sourcing hub for automakers across the globe. The growth of the Indian electric motors market for automotive applications will eventually outpace that of the Chinese market due to a growing local economy, which is partly driven by the national economic transformation program called “Make in India”. India is ranked as the world’s sixth-largest automotive market and world-class automakers are rolling out expansion plans in India to maximize manufacturing capacity and output to minimize the supply-demand gap in the local market. With all of these plans, the Indian market for electric motors in automotive applications is poised for stronger growth through 2019.
Additionally, the Eurozone economy has begun to recover and electric motor shipments to the EMEA region are predicted to return to growth. Much of the increasing demand for electric motors in the EMEA region is because of steady growth in the German and French markets. A total of 691 million motors are predicted to be sold in Germany, France and the rest of Europe (except Russia) in 2019. The electric motor market in Russia for automotive use is decreasing drastically because of poor economic performance and strong consumer price inflation.
Price competitiveness is the biggest challenge in the industry. The average selling price (ASP) of electric motors is forecast to decline in an attempt to boost motor shipments to the automotive industry. There are several companies expanding and diversifying their product lines to cater for both DC brushed motor and DC brushless motor market demand. Despite the decline of ASP, the overall competitive environment will remain unchanged as the existing market players have established good partnerships with OEMs and Tier-1 companies in the automotive industry.