The growing demand for energy-efficient motors to cut operating costs is a key driver in the European motors market, according to a new study from Frost & Sullivan. It reports that the European integral and fractional horsepower motors market was worth almost $5.17bn in 2011 and will reach $6.14bn by 2016.

Growing concerns about cutting carbon emissions are driving the uptake of IE3 class or premium-efficiency motors, while soaring energy costs are further reinforcing the trend to replace old motors with newer energy-efficient ones.

However, rising production costs and competition from low-cost Asian competitors are squeezing the profit margins of established European motor vendors. Economic volatility in Europe is also dampening the market’s growth potential in the short term.

"Another challenge relates to recent measures undertaken by the Chinese Government to regulate its mammoth permanent magnets industry,” warns Frost & Sullivan industrial automation and process control research analyst, Ramasubramanian Natarajan. “This move is set to affect synchronous motors manufacturers in Europe who face the uphill task of procuring permanent magnets used in their motors.”

The report suggests that a focused product line strategy will help motor suppliers to achieve differentiation, as well as supporting growth in key end-user segments. Developing application-specific products will be an important factor in succeeding in the European motors market in the future, it adds.