China low and medium-voltage inverter industry report, 2011-2012

In terms of market structure, low-voltage inverter is the mainstream, accounting for over 85% market share, and medium-voltage inverter makes up less than 15% because of its narrower range of application.

Chinese low and medium-voltage inverter industry is characterized by the followings:

Foreign brands possess apparent advantages. By virtue of state-of-the-art technology and early entry, foreign brands represented by Siemens, ABB, Yaskawa and Schneider occupy around 75% of the Chinese market. In 2011, the top five foreign brands (by sales) together constituted 64.3% of the total sales in China. The low and medium-voltage inverter market in China is expected to be monopolized by foreign brands in the coming five years.

Domestic brands are less concentrated. Compared with foreign brands, the domestic low and medium-voltage inverter brands are characterized by a low concentration degree. The top 4 domestic manufacturers occupied only 8.3% of the Chinese market by sales in 2011. Moreover, the advantageous fields of leading Chinese enterprises are relatively dispersed. For instance, INVT specializes in the production of inverters for lifting machinery, wire drawing and coal fields, while Inovance focuses on inverters for elevators and injection molding machines.

Hoisting machinery presents the most robust demand. Low and medium-voltage inverters are extensively applied in hoisting machinery, textile and chemical fiber, machine tools, plastics, oil & gas drilling, oil & gas and petrochemical sectors. The inverters for hoisting machinery, textile and chemical fiber, and oil & gas drilling ranked the top three in sales which amounted to RMB1.92 billion, RMB1.78 billion and RMB1.54 billion respectively in 2011.

Distribution serves as the major sales channel. Most of low and medium-voltage inverter manufacturers sell their products mainly through agents and partly by direct sales modes including project bidding and OEM for system integrators.