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Danfoss’s acquisition of Finnish drive manufacturer Vacon in 2014 gave it a large share of the industrial drive market. Since then, Danfoss has become the number two AC drive vendor in the world, behind market leader ABB. Siemens is in third place.
Siemens and ABB’s success in the drives sector is because of their leading positions in the controls segment, and their ability to provide complete plant-wide infrastructure. They can be seen as companies that provide comprehensive solutions.
In contrast, Danfoss does not sell standard AC motors. Instead, the company allows clients to choose which motor vendor to couple with its drives. Also, the company does not sell a suite of products that provide a complete answer. Instead, its success comes from its ability to target energy saving applications. The company is known for its building controls, HVAC systems, sensors, valves, and thermostats. Building energy-saving drives is an extension of this work. This leadership has led to Danfoss performing well in segments where energy-saving is the main focus of drive usage, such as HVAC, refrigeration, food and drinks, and the marine sector.
The growth of China as the largest market in the world fragments and dilutes the market shares of established vendors. This trend is set to continue.
Inovance and INVT are the leading Chinese vendors. There is also considerable price pressure on drives globally. Moreover, Chinese drives can be bought for as low as half the price of equivalent leading-brands. Chinese vendors have driven down prices in general and gained a lot of business at the low end of the market.
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