The price of electric AC motors is forecast to increase due to rising demand among downstream markets and rising input prices
Los Angeles, CA (PRWEB) July 20, 2014
Electric AC motors have a buyer power score of 2.8 out of 5. This score indicates that suppliers have an advantage with regard to negotiations; however, there are factors that work in favor of buyers and suppliers. During the past three years, suppliers increased the price of AC motors due to rising demand among key buyers and rising freight and gasoline costs. “Factors that boost buyer power include low market share concentration, a low level of product specialization and moderate switching costs,” says IBISWorld business research analyst Jeffrey Cohen.
The average price for AC motors has been increasing during the three years to 2014 due to the economic recovery following the recession. As the economy rebounded, the number of businesses and corporate profit increased, which fueled demand for AC motors among new and existing customers. These strengthening demand trends encouraged suppliers to push up motor prices. During the past three years, declining prices for steel and aluminum, key inputs in the production of several types of AC motors, have caused operating costs for suppliers to fall. Declining input costs have, in turn, mitigated price growth for electric AC motors. “While input prices stayed low, it was not enough to keep suppliers from responding to rising freight and fuel costs, which forced suppliers to pass these higher costs on to buyers in the form of higher product prices,” says Cohen.
The fragmented nature of the market positively affects buyer negotiating power. Because there are many suppliers throughout the United States, buyers have many options when choosing a supplier, and can pit suppliers against one another. Also, AC motors are typically homogenous products, and, because there are hundreds of suppliers in the manufacturing and wholesale channels, buyers have a wide selection of suppliers that can fulfill their needs. The moderate level of switching costs aids buyers because there are several suppliers that have years of experience and are willing to provide products to buyers located anywhere throughout the United States. Major vendors include ABB Ltd., Eaton Corporation, General Electric Company and Johnson Electric Holdings Ltd. For more information, visit IBISWorld’s Electric AC Motors procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of electric AC motors. AC motors are used in a wide range of applications, such as automobiles, pumps, fans, conveyors, machine tools, and heating and cooling. This report does not include electric DC motors.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Buying Lead Time
Key RFP Elements
Buyer Power Factors
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IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorld’s procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.