Increasing demand has caused suppliers to raise prices during the past three years, but rising import competition has limited this growth.
Los Angeles, CA (PRWEB) February 06, 2015
Auxiliary generators have a buyer power score of 2.9 out of 5, indicating that neither buyers nor suppliers have a distinct advantage in negotiations.
According to IBISWorld analyst Jeffrey Cohen, the price of auxiliary generators has risen at an estimated annualized rate of 2.5% during the past three years, thanks to growth in industrial production and nonresidential building activity. New buildings such as hospitals, power plants and industrial manufacturing facilities spur demand for auxiliary generators, which are used to provide emergency power for these and other structures. A limited availability of substitute products has also diminished buyer power. Although portable generators and inverters provide a reasonable alternative for limited residential situations, they are not equipped to handle the large power requirements of commercial and industrial applications.
Despite steady price growth, higher demand and the absence of any reasonable substitute products, buyers have enjoyed a range of favorable negotiation conditions, including low market concentration, low switching costs and rising imports, continues Cohen. First, market share concentration is low, which causes suppliers to engage in heavy price-based competition to attract customers. Additionally, low switching costs indicate there are several suppliers that can provide high quality auxiliary generators to buyers in several industries. In addition, rising imports have brought more comparable, lower-price foreign goods into the US market. Not only have increasing imports given buyers another supplier choice, they have constrained price growth among US vendors, which must compete with lower-cost goods.
During the next three years, the average price paid for auxiliary generators is forecast to increase further. Although the pace of price growth will quicken, rising imports will largely keep this growth in check. This stable growth will enable buyers to better plan and budget future expenses. For more information, visit IBISWorld’s Auxiliary Generators procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of auxiliary generators. Auxiliary generators are used as an emergency power supply and to store energy. This report includes auxiliary generators that run on propane, natural gas, diesel or renewable energy sources. The primary suppliers of auxiliary generators are manufacturers and wholesalers. Key buyers of these generators include the heavy industrial facilities construction, mining and utilities industries, as well as government agencies. This report excludes portable generators.
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.