China's low-voltage electrical technology as a bottleneck

Chint, People's Electric Appliances, and Delixi have formed the three giants of China's low-voltage electrical industry. Recently, these enterprises have initiated the innovation and connection between Chinese manufacturing and smart manufacturing. The domestic and foreign markets are steadily rising. As far as the domestic market is concerned, currently foreign-funded enterprises have strong R&D, design, and management capabilities. However, domestic companies have different types of companies and product quality, and their R&D capabilities still need to be strengthened.

China's low-voltage electrical technology into the bottleneck of scientific research needs to be improved

At present, nearly 80% of China's imports of low-voltage electrical appliances come from the Asian market, and over 90% of its exports are occupied by Asian, European and North American markets. China's imports of low-voltage electrical appliances mainly come from the Asian market, accounting for 78.95%, the European market accounted for 14.47%; exports, Asia, Europe and North America accounted for 64% of the three major market exports, 14.27% and 13.65%, exports were respectively Increased 5.12%, 10.56% and 9%. It is worth mentioning that in 2013, China's exports of low-voltage electrical appliances to Africa showed a relatively significant increase, an increase of 34.12% year-on-year, indicating that China's low-voltage electrical companies have achieved some success in opening up the emerging international market.

Low-voltage electrical current situation

The situation of state-owned, private and foreign-funded enterprises in the low-voltage electrical appliance industry has continued for many years. At present, ABB, Siemens, Schneider Electric and other international electric companies have entered the Chinese market in full, and while occupying the high-end product market, they actively enter the middle and low-end markets in China. With the globalization of the market, foreign-funded enterprises and the domestic enterprise market are mutually infiltrated. Another inevitable trend in the development of the low-voltage electrical industry. This penetration includes the penetration of high-end products from domestic companies into foreign markets; the products of foreign-funded enterprises will infiltrate domestic and low-end markets.

However, as far as the domestic market is concerned, the current foreign-funded enterprises have strong R&D, design, and management capabilities. While domestic companies, especially private enterprises, have flexible business ideas and strong sales channels, they have a lot of differences in terms of company size and product quality. Capacity still needs to be strengthened. The state and local governments should actively encourage enterprises and industrial clusters to extend the industrial value chain, support low-voltage electrical companies to develop in a “special, refined, and special” direction, and form a number of distinctive and focused industrial chains to drive industrial upgrading.

Research input needs to be improved Technology short board has become a bottleneck

"The macro situation and the overall situation of the industry are positive for the low-voltage electrical appliance industry. It is expected that the low-voltage electrical appliance industry will maintain a relatively high growth rate in the next five to ten years. The future compound annual growth rate will be 10% to 15%," said the electrical equipment industry expert.

However, it should not be overlooked that the technical shortcomings of the low-voltage electrical appliance industry have become the biggest bottleneck for the industry's forward development. According to statistics, foreign outstanding enterprises can achieve about 7% of total sales in the research and R&D investment of low-voltage electrical products. The average low-voltage electrical appliance industry in China is 1% to 2% of total sales, but only about 3% of excellent companies. This topic has also become the focus of this year's General Electric Low Voltage Appliances Subcommittee of the China Electrical Equipment Industry Association. It can be seen that this issue has attracted the attention of the entire industry.

European low-voltage electrical breakthrough

With the continuous development of the European processing industry, the growth of low-pressure variable-speed drives will recover and in turn drive the growth of sales of premium drives. IHS expects that during this period, by 2016, economic activities in major countries except Japan will further accelerate, and the growth of the global low-voltage variable-speed drive market will reach 2.9% in 2014 and 3.5% in 2015.

Analysts predict that in 2014, sales of low-pressure variable-speed drives will increase by about 6% in the discrete manufacturing industry in their largest application market, and by 7% in 2015. Its sales in discrete industries have a greater impact on the simple standard drive market than on the premium drive market.

About 70% of the revenue in the compact standard drive market comes from the machinery manufacturing industry, while about 50% of the revenue from the premium driver market comes from discrete industries. The sales price of the former is lower than the latter, which explains well the difference in growth between income and unit shipments.

The industry said that since the global economic slowdown in 2009, machinery manufacturers, distributors and system integrators have become more cautious about their level of mechanical stocks. However, recent reports from suppliers indicate that sales to these customers have grown much faster than the processing industry.

Although revenue from the processing industry is still very low, IHS expects sales in this industry to increase by more than 5% in 2014 and by more than 8% in 2015.

Since the strong recovery in Europe, the Middle East, and Africa is not expected to occur until 2014, early developments strongly suggest that the demand for discrete markets is increasing.