The global industrial motors market was valued at USD 62.76 billion in 2022 and is expected to reach USD 91.02 billion by 2028, growing at a CAGR of 6.39%. The market has witnessed steady growth over the years, driven by increasing industrialization, automation, and the need for energy-efficient solutions. The market size is influenced by economic growth, infrastructure development, and technological advancements. The industrial motors market is witnessing technological advancements, including the integration of IoT (Internet of Things) and smart motor systems. These technologies enable remote monitoring, predictive maintenance, and enhanced operational efficiency.
The global industrial motors market shipments are expected to reach 141.07 million units by 2028. Regional factors such as economic development, industrial policies, and infrastructure investments influence the market's growth. Major industrial motors markets include North America, Europe, Asia Pacific, and Rest of the World. The U.S. accounts for one of the highest shares in the global industrial motors market and over one-third of revenues generated by industrial motors in North America. United States' high share can be attributed to the growing production of shale oil & gas, the construction of numerous chemical plants, and investments by power utilities in gas turbine combined-cycle plants, which are expected to drive the demand for industrial motors in the US. Further, Asia Pacific is experiencing rapid growth due to the expansion of manufacturing activities in countries like China and India.
RISK FACTORS IN MARKET
The industrial motor market presents various risk factors that vendors need to consider. These risk factors can affect their operations, financial performance, industry position, and overall business sustainability. The markets served by the companies are very volatile. Vendor businesses are affected by various technological changes and corresponding shifts in customer demands, which could result in the shortened life cycle of the product. The company’s businesses can also be affected by the new entrants. Changes in government regulations & policies, tariffs & trade barriers, taxation, and investments are also risk factors for the companies operating in the market.
Price volatility is the market’s biggest risk factor and will continue to face. Vendors experience fluctuations in the prices of raw materials, such as a significant increase in raw material prices due to inflationary pressures and an increase in industrial metals. This includes lead, copper, and steel price globally.
MARKET TRENDS & OPPORTUNITIES
Demand for IE4 Efficiency Low Voltage Motors
There is a growing focus on energy efficiency and sustainability across industries worldwide. In response, manufacturers seek more energy-efficient motor options to reduce energy consumption and operating costs. IE4 efficiency motors offer significant energy savings compared to older, less efficient models. Apart from this, several regulations and standards are in place that mandate or incentivize the use of more energy-efficient motors. For example, the European Union's Eco-design Directive has set minimum efficiency standards for electric motors sold within the EU, which are becoming increasingly stringent. Similar regulations exist in other parts of the world, such as the US Energy Policy Act (EPAct) and China's Minimum Energy Performance Standards (MEPS).
Expansion of Warehouses in the APAC Region
Recently, warehousing and logistics facilities have been increasing due to a boost in e-commerce platforms. The warehousing sector has been strong for a few years in many countries of the APAC region. Several organizations are growing through omnichannel distribution networks and increasing their workforce to retain productivity. The requirement for warehouses is increasing rapidly due to the rise in demand for online delivery of goods. Demand for one-day delivery led to significant demand for warehouses, contributing to the industrial motors market. Increasing warehouses are expected to generate demand for industrial motors in the market. Warehousing and logistics facilities are transforming into modern warehouses. They are implementing automation & IoT solutions for accuracy, reducing error, saving time, and enhancing productivity. Thus, the demand for industrial motors will likely generate from countries or regions with large warehousing facilities.
Supply Shortage of Electric Steel
Industrial and commercial motors suppliers are dealing with a serious issue, i.e., lack of electric steel. In the past, suppliers like Nidec Corporation, Siemens, ABB, and others haven’t had much trouble acquiring supplies of essential raw materials needed to make their motors. Numerous supply disruptions have undoubtedly occurred throughout the industry's history, but relatively few have become long-term issues. The industrial motors market heavily relies on electric steel, which is used to manufacture the cores of the electric motors that power a wide range of industrial equipment, from manufacturing machinery to HVAC systems. However, there has been a recent supply shortage of electric steel, which has led to difficulties in meeting the demand for electric motors and has hampered the growth of the industrial motors market.
INSIGHTS BY PRODUCT
The industrial motors market includes two major types of motors – AC and DC motors. These motors are categorized into different types and used in various applications. The AC motor market is expected to grow at a CAGR of over 6% during the forecast period. There is a need to improve the efficiency and precision of motors to reduce the environmental impact. With the increased use of elevators, conveyors, compellers, and other industrial machinery, the adoption of IE4 and higher-efficiency motors is expected to flourish in the market.
INSIGHTS BY POWER OUTPUT
The global industrial motors market by power output segments as IHP and FHP. IHP dominated the market share in revenue as they are commonly used in heavy-duty applications requiring higher power output, such as large-scale manufacturing, mining, oil and gas, and heavy machinery. These industries often require motors with greater horsepower to drive heavy loads and operate machinery efficiently. As a result, demand for IHP motors is generally higher in these sectors contributing to their dominance. The end-users of FHP motors include food & beverage, electrical, and mechanical machinery components such as power drills and routers, among others.
INSIGHTS BY VOLTAGE
The industrial motors market comprises various voltage brackets, including low, medium, and high-voltage. The low voltage motor market is governed by energy efficiency legislation in each of four types – IE1, IE2, IE3, and IE4 and accounts for the highest share in the market. The regional efficiency transition regulations in countries will require buyers of low voltage motors to purchase higher efficiency low voltage motors, which are more expensive. This dramatically affects revenue growth but not necessarily unit growth. During the forecast period, medium and high voltage are expected to thrive due to advantages such as suitability for advanced machines and long life.
INSIGHTS BY LOW VOLTAGE AC MOTOR BY EFFICIENCY
Key factors driving the growth of the energy-efficient motor industry are energy savings and resulting costs over conventional motors, growing funding from policymakers worldwide for energy-efficient motors, increasing need to reduce the greenhouse effect, and implementing energy-efficient motors in the manufacturing sector. However, the high cost of premium performance (IE4) motors is the key limiting factor for developing the industrial motors market.
IE2 motors have been widely adopted in the industrial motors market due to their improved energy efficiency compared to older motor designs. IE2 motors are designed to meet the minimum energy efficiency requirements specified by the International Electrotechnical Commission for motors operating at a continuous duty cycle. IE2 motors are designed with improved materials, better insulation, and optimized designs, which reduce energy losses and improve overall efficiency.
INSIGHTS BY SALES CHANNEL
The global industrial motors market by sales channel is categorized as direct and indirect. Direct sales channels allow the consumer to buy goods directly. Many customers prefer to buy directly from vendors to reduce the extra cost incurred via third parties in the sales channel, such as dealers or distributors. Strategic partnerships are expected to reduce operational costs in the market. In the industrial motors market, there are three scenarios in the direct sales channel – direct to OEM, direct to end-user, and direct to system integrator. Direct-to-OEM sales channel held the largest segmental share in 2022. The indirect sales channel involves a third-party purchase through a distributor or dealer. There are several reasons that customers choose the indirect method – lack of awareness of various brands, variety, price, and long-term contracts. In the industrial motor market, there are three scenarios in the distribution sales channel – distributor to OEM, end-user, and system integrator.
INSIGHTS BY END-USER
The HVAC end-user segment will hold the largest global industrial motors market share in 2022. The HVAC industry consists of motors used in heavy-duty applications such as ventilators, fans, exhaust fans, unit heaters, air conditioning units, smoke ventilation fans, and other applications. VFD (variable frequency drives) has increased in the HVAC industry, driving the demand for high-efficiency motors. The demand for industrial motors is anticipated to grow due to increased industrial production and replacing old motors with new energy-efficient motors. The demand for industrial motors is expected to rise in the coming years due to expansions and investments by private and public players.
APAC accounted for the highest share of the global industrial motors market, accounting for over 33% in 2022, mostly due to the presence of leading manufacturing countries, such as China and Japan, and rapidly boosting industrialization in India. APAC was led by China, Japan, India, and South Korea, the significant industrial motors markets. Urbanization and industrialization in emerging countries like India are raising the demand for vehicles, thereby boosting the demand for industrial motors from the automotive industry.
In 2022, Europe was the second-largest global industrial motors market revenue contributor due to the presence of leading manufacturing companies and significant development in nations such as Germany and France. Moreover, due to increasing IoT expenditure and automation and favorable government policies, significantly boosting the manufacturing & warehousing industries, Latin America is expected to witness the highest CAGR during the forecast period.
There is currently an intensification of the competitive scenario in the global industrial motors market. Vendors are likely to be adversely affected by the rapidly evolving technological climate, as the characteristics of this sector are continuous developments and improvements according to schemes and government policies. The rivalry between vendors for market share is severe. The entrance into the industry of large motor firms presents a big challenge to domestic sellers. The present scenario pushes suppliers to adjust and refine their specific value propositions to maintain a strong industry presence. The industrial motors market is highly divided by numerous manufacturers operating and selling industrial motors worldwide. Some vendors currently operating in the market are WEG, Siemens, ABB, Allied Motion, Danfoss, Johnson Electric Group, Regal Rexnord, Ametek, and many others.