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2014-2018 Diesel Gensets Market in Europe

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01. Executive Summary ..............................................

02. List of Abbreviations ..............................................

03. Scope of the Report ..............................................

03.1 Market Overview .................................................................

03.2 Product Offerings .................................................................

04. Market Research Methodology ...........................

04.1 Market Research Process ...................................................

04.2 Research Methodology ......................................................

05. Introduction ...........................................................

06. Market Landscape ................................................

06.1 Market Overview .................................................................

06.2 Market Size and Forecast ...................................................

06.3 Five Forces Analysis ............................................................

07. Market Segmentation by Application ............... 1

07.1 Standby Application Segment ......................................... 1

07.1.1 Market Size and Forecast ....................................................................... 1

07.2 Prime Power Application Segment .................................. 1


07.3 Peak Shaving Application Segment ............................... 1


08. Market Segmentation by Product ..................... 1

CONTENTS

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08.1 Under 60 kW Segment ...................................................... 1


08.2 60 kW-300 kW Segment .................................................... 1


08.3 300 kW-1 MW Segment ..................................................... 1


08.4 1 MW and Above Segment .............................................. 1


09. Market Segmentation by End-users .................. 2

09.1 Industrial Sector ................................................................. 2


09.2 Commercial Sector ........................................................... 2


09.3 Infrastructure Sector .......................................................... 2


09.4 Residential Sector .............................................................. 2


10. Key Leading Countries ....................................... 2

10.1 Spain ................................................................................... 2

10.2 Italy ..................................................................................... 2

10.3 Germany ............................................................................ 2

11. Buying Criteria ..................................................... 2

12. Market Growth Drivers ........................................ 2

13. Drivers and their Impact ..................................... 3

14. Market Challenges ............................................. 3







15. Impact of Drivers and Challenges ..................... 3

16. Market Trends ...................................................... 3

17. Trends and their Impact ..................................... 3

18. Vendor Landscape ............................................. 3

18.1 Competitive Scenario ....................................................... 3

18.1.1 Mergers and Acquisitions ....................................................................... 3

18.2 Market Share Analysis 2013 ............................................. 3

18.3 Other Prominent Vendors ................................................. 3

19. Key Vendor Analysis ........................................... 4

19.1 Caterpillar Inc. ................................................................... 4

19.1.1 Business Overview .................................................................................... 4

19.1.2 Business Segmentation ........................................................................... 4

19.1.3 Key Information ........................................................................................ 4

19.1.4 SWOT Analysis ........................................................................................... 4

19.2 Cummins Inc. ..................................................................... 4


19.2.2 Business Segments ................................................................................... 4

19.2.3 Key Information ........................................................................................ 4

19.2.4 SWOT Analysis ........................................................................................... 4

19.3 Kohler Co. .......................................................................... 4


19.3.2 Business Segments ................................................................................... 4

19.3.3 Key Information ........................................................................................ 4

19.3.4 SWOT Analysis ........................................................................................... 4

20. Other Reports in this Series ................................. 4







Exhibit 1: Market Research Methodology .......................................

Exhibit 2: Segmentation of Diesel Gensets 2013 .............................

Exhibit 3: The Diesel Gensets Market in Europe 2013-2018

(US$ billion) ........................................................................

Exhibit 4: Diesel Gensets Market in Europe by Application

Segmentation 2013-2018 ................................................ 1

Exhibit 5: Diesel Gensets Market in Europe by Standby

Application Segment 2013-2018 (US$ million) .............. 1

Exhibit 6: Diesel Gensets Market in Europe by Prime

Power Application Segment 2013-2018 (US$

million) .............................................................................. 1

Exhibit 7: Diesel Gensets Market in Europe by Peak

Shaving Application Segment 2013-2018 (US$

million) .............................................................................. 1

Exhibit 8: Diesel Gensets Market in Europe by Product

Segmentation 2013-2018 ................................................ 1

Exhibit 9: Diesel Gensets Market in Europe by Under 60

kW Segment 2013-2018 (US$ million) ............................. 1

Exhibit 10: Diesel Gensets Market in Europe by 60 kW-300

kW Segment 2013-2018 (US$ million) ............................. 1

Exhibit 11: Diesel Gensets Market in Europe by 300kW-

1MW Segment 2013-2018 (US$ million) .......................... 1

EXHIBITS







Exhibit 12: Diesel Gensets Market in Europe by 1 MW and

Above Segment 2013-2018 (US$ million) ....................... 1

Exhibit 13: Diesel Gensets Market in Europe by End-users

Segmentation 2013-2018 ................................................ 2

Exhibit 14: Diesel Gensets Market in Europe by Industrial

Sector 2013-2018 (US$ million) ....................................... 2

Exhibit 15: Diesel Gensets Market in Europe by

Commercial Sector 2013-2018 (US$ million) ................. 2

Exhibit 16: Diesel Gensets Market by Infrastructure Sector

2013-2018 (US$ million) ................................................... 2

Exhibit 17: Diesel Gensets Market in Europe by Residential

Sector 2013-2018 (US$ million) ....................................... 2

Exhibit 18: Diesel Gensets Market in Europe by Vendor

Segmentation 2013 .......................................................... 3

Exhibit 19: Business Segmentation of Caterpillar Inc. ..................... 4

Exhibit 20: Business Segmentation of Cummins Inc. ....................... 4

Exhibit 21: Business Segmentation of Kohler Co.............................. 4






Diesel Gensets Market in Europe

01. Executive Summary

Market Size 2013: US$1.26 billion

2018: US$1.59 billion

Market Growth Rate 2014: 3.97 percent

2018: 5.80 percent

CAGR 4.79 percent

Geography Europe

Key Leading Countries

Spain

Italy

Germany

Key Customer Segments

Industrial Sector

Commercial Sector

Infrastructure Sector

Residential Sector

Key Market Drivers

Increasing Public Infrastructure Projects

Increasing Demand for Generators from Industrial Sector

Increasing Demand for Generators from Commercial Sector

Increasing Demand for Energy in Europe

Key Market Challenges

Increasing Regulation on Environmental Conservation

Rising Demand and Use of Gas Gensets

Increasing Sale of Used Diesel Gensets

Increasing Diesel Prices

Key Market Trends

Increasing Focus of Vendors on Eastern European Market

Increasing Demand for Hybrid Generators

Increasing Product Differentiation

Increasing Number of Mergers and Acquisitions

Key Buying Criteria

Price

Maintenance

Efficiency

Advanced Features

Key Vendors

Caterpillar Inc.

Cummins Inc.

Kohler Co.






Diesel Gensets Market in Europe 2

02. List of Abbreviations

EU - European Union

IT - Information Technology

kVA - kilo-volt-amperes

kW - Kilowatt

MW - Megawatt







03. Scope of the Report

03.1

Market OverviewThis report covers the present scenario and the growth prospects of the Diesel Gensets market in

Europe for the period 2014-2018. It considers 2013 as the base year and provides data for the

trailing 12 months. To calculate the market size, the report considers revenue generated from

sales of diesel gensets in Europe.

The report also presents the vendor landscape and a corresponding detailed analysis of the top

three vendors in the market in Europe. In addition, it discusses the major drivers that influence the

growth of the market. It also outlines the challenges faced by the vendors and the market at

large, and the key trends that are emerging in the market.

03.2 Product Offerings

Some of the products offered by the major vendors in the Diesel Gensets market in Europe 2014-

2018 are listed below:

Company Products Offered

Caterpillar Inc. FG Wilson Series

CAT Product Series

Cummins Inc. Cummins Power Generation D1703

Light Commercial Generators series

Cummins Commercial Quiet Diesel and Standard Diesel series

Cummins Onan Quiet Diesel series

Rental Diesel Generators series

Kohler Co. REOZ series







04. Market Research Methodology

04.1

Market Research ProcessTechNavio has collected key data related to the Diesel Gensets market in Europe and analyzed

these data using a variety of methods. The market dynamics have been ascertained following a

detailed study of the micro, meso, and macroeconomic indicators of the market.

04.2 Research Methodology

This report is based on in-depth qualitative and quantitative analyses of the Diesel Gensets

market in Europe. The quantitative analysis involved the application of various projection and

sampling techniques. The qualitative analysis involved primary interviews, surveys, and vendor

briefings. The data gathered as a result of these processes were validated through experts'

opinions.

Exhibit 1: Market Research Methodology

Source: TechNavio Analysis

Diesel Gensets

Market in Europe

2014-2018







Based on the research results and technical insights thus gathered, TechNavio analysts have

provided a comprehensive analysis of the varied aspects of the market. The impact of global

economic conditions and other macroeconomic indicators was also considered while assessing

the market.







05. Introduction

Diesel generators are devices that convert mechanical energy into electrical energy using

diesel as a fuel. Generators are used to provide continuous power supply to various end-users.

Diesel generators are segmented based on their application such as Standby, Prime Power, and

Peak Shaving. The end-users of the diesel gensets are the Industrial sector, the Commercial

sector, the Infrastructure sector, and the Residential sector.

The Diesel Gensets market in Europe is expected to witness a steady growth rate and overall the

market is expected to grow at a CAGR of 4.79 percent during the forecast period. The market is

dominated by three major players: Caterpillar Inc., Cummins Inc., and Kohler Co. In terms of

end-users, the market is dominated by the Commercial sector, followed by the Industrial sector.

The majority of the market growth stems from Spain, Italy, and Germany.

The Diesel Gensets market in Europe is driven by several factors. One of the major drivers is the

increasing public infrastructure project. The increasing construction of railways and airports in

European countries has boosted the demand for diesel gensets. Moreover, the increasing

transport infrastructure projects also led to the increasing demand for diesel gensets in Europe.

Another major driver is the increasing demand for generators from the Industrial sector.

Despite the presence of several drivers, the growth of the market is curtailed by several

challenges. One of the major challenges in the market is the increasing regulation on

environmental conservation. Diesel generators emit harmful substances such as nitrogen oxide,

carbon monoxide, and hydrocarbons. This has led the EU to pass stringent rules and regulations

pertaining to the control of the emission of gases and noise generated by the diesel generators.

Another major challenge is the rising demand and use of gas gensets.

Despite the presence of serious challenges, the Diesel Gensets market in Europe is witnessing

several emerging trends in the market. One of the major trends in the market is the increasing

focus of vendors on the Eastern European market. The rapid urbanization of the Eastern

European countries has led to more diesel gensets vendors coming into the market. Thus, the

combined effect of various trends and drivers is expected to exert a positive influence on the

market in Europe during the forecast period.







06. Market Landscape

06.1

Market OverviewThe diesel gensets are comprised mainly of a diesel engine and a generator. The diesel gensets

are used by various sectors such as Commercial, Industrial, Infrastructural, and Residential.

Exhibit 2: Segmentation of Diesel Gensets 2013


The growing demand for diesel gensets in Europe is due to the increasing demand for energy.

The vendors in the market provide diesel gensets which can generate power ranging from 5.5

kVA-22 kVA and 600 kVA-2.7 MW. In 2013, Spain, Italy, and Germany accounts for the largest

market share of the market in Europe.

D i e s e l G e n s e t s

Diesel Engine

Generator







06.2 Market Size and Forecast

The Global Gensets market in Europe was valued at US$1.26 billion in 2013 and it is expected to

reach US$1.59 billion by 2018, growing at a CAGR of 4.79 percent.

Exhibit 3: The Diesel Gensets Market in Europe 2013-2018 (US$ billion)


The Diesel Gensets market in Europe is expected to grow at a steady rate during the forecast

period. The various public infrastructure projects undertaken in Europe have contributed to the

growth of the market. For instance, the increasing construction of railways and airports in

Germany boosted the demand for diesel gensets. Poland, the Czech Republic, and Hungary

also witnessed an increasing number of manufacturing facilities being set up that require

continuous power supply. For instance, in Poland, the increase in the construction of warehouses

and offices has led to an increasing demand for electricity, which in turn has led to the demand

for diesel gensets. The increasing residential construction in Eastern European countries has also

led to the demand for diesel gensets, thereby increasing the growth of the Diesel Gensets

market in Europe. Moreover, the increase in the consumption of energy for various new

applications such as the establishment of a new factory is giving rise to the need for an

uninterrupted power supply. Thus, the demand-supply gap for energy is widening, giving rise to

the need for diesel gensets.







06.3 Five Forces Analysis

Threat of Rivalry

(High)

The market is dominated by

few large vendors. Thevendors are trying todifferentiate their product tosustain competition. Hence,the threat of rivalry is high.

Bargaining Power ofSuppliers

(Medium)

The vendors depend on thesupply of raw materials, parts,

and components from thesupplier to produce efficient

generators. Hence, thebargaining power of suppliers

is high.

Bargaining Power ofBuyers

(Medium)

The products offered by thevendors involve highswitching costs. Hence, this

reduces the bargainingpower of the buyers.

Threat of New Entrants(Medium)

The market providesopportunities for new entrantsas many international vendors

are expected to enter themarket through mergers and

acquisitions.

Threat of Substitutes

(High)

The availability of gas

generators and otherforms of renewablesources of energy makesthe threat of substitutes

high.







Key

The impact of the forces is graded on the basis of the intensity and duration of their impact on

the current market landscape. The magnitude of the impact has been categorized as

described below:

Low - Negligible or no impact on the market landscape

Moderate - Medium-level impact on the market

Moderately High - Significant impact on the growth of the market

High - Very high impact, with radical influence on the growth of the market







07. Market Segmentation by Application

The Diesel Gensets market in Europe includes three major application segments:

Standby

Prime Power

Peak Shaving

Exhibit 4: Diesel Gensets Market in Europe by Application Segmentation 2013-2018


In 2013, the Standby application segment accounted for a market share of 83.81 percent and it

is expected to account for 84.48 percent by 2018. The Standby segment contributes significantly

to the growth of the Diesel Gensets market in Europe, because of the increasing demand for a

continuous power supply by various end-users. In 2013, the Prime Power application segment

accounted for a market share of 15.08 percent, and it is expected to account for 14.39 percent

by 2018, followed by the Peak Shaving application segment that accounted for a market shareof 1.11 percent in 2013, and which is expected to account for a 1.13 percent by 2018.







07.1 Standby Application Segment

07.1.1 Market Size and Forecast

The Standby segment is valued at US$1,056 million in 2013 and it is expected to reach US$1,345

million by 2018, growing at a CAGR of 4.96 percent.

Exhibit 5: Diesel Gensets Market in Europe by Standby Application Segment 2013-

2018 (US$ million)


The demand for electricity in data centers in Europe has led to the increasing demand for diesel

gensets. The increasing growth of the Automotive industry in Eastern Europe has increasing the

demand for diesel gensets, thereby increasing the growth of the Diesel Gensets market in

Europe. Moreover, the Commercial sector is increasingly using diesel gensets for backup power

supply.







07.2 Prime Power Application Segment


The Prime Power segment is valued at US$190.01 million in 2013 and it is expected to reach

US$229.01 million by 2018, growing at a CAGR of 3.80 percent.

Exhibit 6: Diesel Gensets Market in Europe by Prime Power Application Segment

2013-2018 (US$ million)


The Prime Power segment accounts for a share of 15.08 percent of the Diesel Gensets market in

Europe in 2013. This segment is driven by the increasing demand for diesel gensets by the

Industrial sectors. Poland, the Czech Republic, and Hungary have witnessed an increasing

number of manufacturing facilities being established due to the availability of low-cost labor,

and increasing foreign investment. The manufacturing bases require continuous power supply to

carry out the production process, which in turn increases the demand for diesel gensets.







07.3 Peak Shaving Application Segment


The Peak Shaving segment is valued at US$13.99 million in 2013 and it is expected to reach


Exhibit 7: Diesel Gensets Market in Europe by Peak Shaving Application Segment

2013-2018 (US$ million)


The Peak Shaving segment is a relatively small segment of the Diesel Gensets market in Europe.

This segment accounted for a share of 1.11 percent of the market in 2013. The segment involves

the seasonal demand of diesel gensets, which implies that diesel gensets are used only in a

particular season, for instance during the summer for air conditioning purposes in many

European countries.







08. Market Segmentation by Product

The Diesel Gensets market in Europe includes four major product segments:

Under 60 kW

60 kW-300 kW

300 kW-1 MW

1 MW and Above

Exhibit 8: Diesel Gensets Market in Europe by Product Segmentation 2013-2018


The 60 kW-300 kW segment accounted for the highest share i.e. 48.15 percent of the Diesel

Gensets market in Europe. The increasing use of 60 kW-300 kW power by the Industrial and

Commercial sectors for standby application has led this segment to occupy the largest share in

the market. The Under 60 kW segment accounted for the second largest share i.e. 27.93 percent

of the market, followed by 1 MW & Above and 300 kW-1 MW with 13.09 percent and 10.83percent of the market, respectively.







08.1 Under 60 kW Segment


The Under 60 kW segment is valued at US$351.88 million in 2013 and it is expected to reach


Exhibit 9: Diesel Gensets Market in Europe by Under 60 kW Segment 2013-2018 (US$

million)


The growth of the diesel gensets that generate power under 60 kW is mainly due to the

increasing demand for the under 60 kW power diesel gensets by the Commercial and

Residential sectors.







08.2 60 kW-300 kW Segment


The 60 kW-300 kW segment is valued at US$606.69 million in 2013 and it is expected to reach


Exhibit 10: Diesel Gensets Market in Europe by 60 kW-300 kW Segment 2013-2018 (US$

million)


The Industrial and Commercial sectors are increasingly using 60 kW-300 kW power diesel gensets

for standby application, thus helping the segment to occupy the largest share in the market.







08.3 300 kW-1 MW Segment


The 300 kW-1 MW segment is valued at US$136.48 million in 2013 and it is expected to reach


Exhibit 11: Diesel Gensets Market in Europe by 300kW-1MW Segment 2013-2018 (US$

million)


The demand for diesel gensets with power ranges of 300 kW-1 MW is majorly driven by the

Industrial sector. The establishment of new manufacturing bases in Poland, the Czech Republic,

and Hungary has led to the increasing demand for 300 kW-1 MW power diesel generators.







08.4 1 MW and Above Segment


The 1 MW and Above segment is valued at US$164.95 million in 2013 and it is expected to reach


Exhibit 12: Diesel Gensets Market in Europe by 1 MW and Above Segment 2013-2018

(US$ million)


The demand for diesel gensets with power ranges of 1 MW and above is majorly driven by the

Industrial and Infrastructure sectors. The increasing construction of railways and airports in

Germany has boosted the demand for 1 MW and above power diesel gensets. In Spain, the

increasing transport infrastructure projects have also led to the increasing demand for 1 MW and

above power diesel gensets.







09. Market Segmentation by End-users

The Diesel Gensets market in Europe includes four major end-users as given below:

Industrial Sector

Commercial Sector


Residential Sector

Exhibit 13: Diesel Gensets Market in Europe by End-users Segmentation 2013-2018


The market is driven by the Commercial sector, which accounts for a market share of 40.56

percent in 2013. There is an increasing demand for diesel gensets from the Commercial sector.

Although the market receives a significant portion of its revenue from the Commercial sector,

the Industrial and Infrastructure sector are also growing rapidly and accounted for considerable

shares in the market.

The Industrial sector accounts for a market share of 33.10 percent, followed by the Infrastructure

sector with a market share of 15.56 percent and the Residential sector with a market share of

10.78 percent in 2013.







09.1 Industrial Sector


The Industrial sector is valued at US$417 million in 2013 and it is expected to reach US$532 million

by 2018, growing at a CAGR of 4.99 percent.

Exhibit 14: Diesel Gensets Market in Europe by Industrial Sector 2013-2018 (US$ million)


The factor contributing to the growth of the Industrial sector is the increasing growth of the

Manufacturing industry in Eastern Europe, which increased the demand for diesel gensets.

Industries are increasingly using 60 kW-300 kW diesel genset power for standby application,

which has also contributed significantly to the overall revenue of the Industrial sector.







09.2 Commercial Sector


The Commercial sector is valued at US$511 million in 2013 and it is expected to reach US$647


Exhibit 15: Diesel Gensets Market in Europe by Commercial Sector 2013-2018 (US$

million)


The Commercial sector accounted for the highest share in the overall market. In Poland, the

increasing construction of warehouses and offices has led to the growing demand for electricity,

which in turn has led to the demand for diesel gensets. The development of IT in Europe led to

the emergence of large numbers of data centers which require continuous power supply

thereby increasing the demand for diesel gensets.







09.3 Infrastructure Sector


The Infrastructure sector was valued at US$196 million in 2013 and it is expected to reach US$248


Exhibit 16: Diesel Gensets Market by Infrastructure Sector 2013-2018 (US$ million)


The increasing construction of railways and airports in Germany boosted the demand for diesel

gensets. In Spain, the increasing transport infrastructure projects also led to the growth of the

market. Furthermore, the rapid urbanization of the Eastern European region has led to the

increasing demand for diesel gensets for construction activities.







09.4 Residential Sector


The Residential sector is valued at US$136 million in 2013 and it is expected to reach US$165


Exhibit 17: Diesel Gensets Market in Europe by Residential Sector 2013-2018 (US$

million)


There is an increasing demand for the under 60 kW power diesel gensets by the Residential

sector that has contributed to the growth of the sector. However, the growth is expected to

decline in 2018, as the supply of main power is expected to increase with high reliability.







10.2 Italy

Italy was the second major contributor in the Diesel Gensets market in Europe with 16.59 percent

of the market. Italy is one of the fastest growing countries in the market in Western Europe. The

market generates a large part of its revenue from the Commercial sector, which is driven by the

Standby application segment.

10.3 Germany

Germany was the third major contributor in the Diesel Gensets market in Europe with 15.22

percent of the market. The market generated a large part of its revenue from the Commercial

sector, followed by the Industrial sector.

Major Driver

•Increasing demand fordiesel gensets forstandby application byCommercial sector

Major Challenge

•Strict adherence of newenvironmental rules andregulations

Major Trend

•Increasing demand forhybrid generators inItaly's Diesel Gensetsmarket

Major Driver

•Increasing demand for

60 kW-300 kW powerand 300 kW-1 MWpower diesel gensetsfor standby and primepower application byCommercial andIndustrial sectors

Major Challenge

•Increasing Diesel Prices

Major Trend

•Continuous

development of newproducts like Free-PistonLinear Genereator in theGerman Diesel Gensetsmarket







11. Buying Criteria

Parameter Details End-user Segments Significance Attached

PriceThe ability to provide

generators at affordable

price.

Industrial Sector

Commercial Sector


Maintenance

The diesel gensets should

involve minimal

maintenancerequirements and the

time taken should be less.

Industrial Sector

Commercial Sector


EfficiencyThe ability to provide

optimal output with

minimal fuel consumption.

Industrial Sector

Commercial Sector


AdvancedFeatures

The ability to provide

advanced features such

as integrated monitoring

systems and customized

generators.

Industrial Sector

Commercial Sector


Key

The impact of the buying criteria is graded on the basis of the intensity and duration of their

impact on the current market landscape. The magnitude of the impact has been categorizedas described below:




Low High

1 2 3 4 5

Low High

1 2 3 4 5

Low High

1 2 3 4 5

Low High

1 2 3 4 5

Low High

1 2 3 4 5

Low High

1 2 3 4 5

Low High

1 2 3 4 5

Low High

1 2 3 4 5

Low High

1 2 3 4 5

Low High

1 2 3 4 5

Low High

1 2 3 4 5

Low High

1 2 3 4 5







12. Market Growth Drivers

The Diesel Gensets market in Europe is driven by several factors. One of the major drivers is the

increasing public infrastructure project. The increasing construction of railways and airports in

European countries has boosted the demand for diesel gensets. Moreover, the increasing

transport infrastructure projects also led to the increasing demand for diesel gensets in Europe.

Another major driver is the increasing demand for generators from the Industrial sector.

Some of the major growth drivers in the Diesel Gensets market in Europe are discussed below:



Increasing Demand for Generators from Commercial Sector

Increasing Demand for Energy in Europe


The various public infrastructure projects undertaken in Europe have contributed to the growth

of the Diesel Gensets market in Europe. In Spain, the rising transport infrastructure projects have

led to the growth of the market. The rapid development of the Eastern European region also led

to a high demand for diesel gensets for construction as well as commercial activities. Moreover,

a significant amount of capital has been invested by the EU in various public infrastructure

projects such as highways, railways, seaports, and airport construction, the undertaking of which

has increased the demand for diesel gensets in Europe.


The Industrial sectors such as the Manufacturing and Process industries in Europe are some of the

main consumers of diesel gensets. Additionally, Poland, the Czech Republic, and Hungary have

been witnessing a rise in the establishment of manufacturing facilities due to the availability of

low-cost labor and increase in foreign investment. Also, the manufacturing bases require

continuous power supply to carry out the production process, which in turn increases the

demand for diesel gensets. Thus, the increasing demand from the Industrial sector has increased

the growth of the Diesel Gensets market in Europe.

Increasing Demand for Generator from Commercial Sector

The rapid growth of the IT industry has led to the commencement of large numbers of data

centers. Hence, the demand for electricity in data centers in Europe has led to the increasing

demand for diesel gensets. Similarly, in Poland the increasing construction of warehouses and







offices has led to the growing demand for electricity, which in turn has led to the demand for

diesel gensets.

Increasing Demand for Energy in EuropeThere is a huge demand and supply gap for energy in Europe, which has led to the increasing

demand for diesel gensets in the country. Currently, various new applications are increasingly

consuming energy, which on the one hand is leading to a shortage of energy, yet on the other

hand is giving rise to the need for uninterrupted power supply. In order to overcome this

shortage of energy and achieve continuous power supply the European countries have been

continuously using diesel generators as a source of power, thereby increasing the growth of the

Diesel Gensets market in Europe.







13. Drivers and their Impact

Driver Impact on Key Customer Category

Industrial Commercial Infrastructure

Increasing PublicInfrastructure Project

Increasing Demand forGenerators from IndustrialSector

Increasing Demand forGenerators fromCommercial Sector

Increasing Demand forEnergy in Europe

Key

The impact of the drivers is graded on the basis of the intensity and duration of the impact on

their current market landscape. The magnitude of the impact has been categorized as

described below:


Medium - Medium-level impact on the market


Low High

1 2 3 4 5

Low High

1 2 3 4 5

Low High

1 2 3 4 5

Low High

1 2 3 4 5

Low High

1 2 3 4 5

Low High

1 2 3 4 5

Low High

1 2 3 4 5

Low High

1 2 3 4 5

Low High

1 2 3 4 5

Low High

1 2 3 4 5

Low High

1 2 3 4 5

Low High

1 2 3 4 5







14. Market Challenges

Despite the presence of several drivers, the growth of the market is curtailed by several

challenges. One of the major challenges in the market is the increasing regulation on

environmental conservation. Diesel generators emit harmful substances such as nitrogen oxide,

carbon monoxide, and hydrocarbons. This has led the EU to pass stringent rules and regulations

pertaining to the control of the emission of gases and noise generated by the diesel generators.

Another major challenge is the rising demand and use of gas gensets.

Some of the major challenges in the Diesel Gensets market in Europe are discussed below:






The EU has set up stringent regulations and guidelines on environmental conservation, which has

had a negative impact on the growth of the Diesel Gensets market in Europe. The vendors need

to comply with the new rules and regulations being passed on the emission of harmful

substances such as nitrogen oxide, carbon monoxide, and hydrocarbons. Thus, the vendors are

developing environmental friendly diesel generators, which consume less fuel and emit less

carbon dioxide and other greenhouse gases. Hence, the stringent rules and regulations have an

adverse effect on the growth of the Diesel Gensets market in Europe.


The reason behind rising demand for gas gensets is that they emit less carbon dioxide and other

greenhouse gases compared to diesel gensets. Many sectors are now using gas gensets, and,

therefore, the vendors are focusing more on manufacturing gas rather than diesel gensets. In

the past few years, the Industrial and Infrastructure sectors have started adopting gas

generators as they offer more efficiency and productivity as compared to diesel generators.

Thus, the increasing growth in gas gensets provides an alternative for the sectors to switch from

diesel to gas gensets.


The increasing sale of used diesel gensets imposes a serious threat to the diesel gensets

manufacturers. Used diesel gensets sold by rental companies are gaining popularity in Europe.

The availability of used diesel gensets at a low cost compared to original diesel gensets is the







main driving factor on the increasing demand for used diesel gensets. This increasing demand

imposes serious pressure on the manufacturer and the pricing of the product, which directly

affects the growth of the Diesel Gensets market in Europe.


Currently, the price of diesel gensets is high due to the increasing price of diesel. The price of

diesel has increased drastically, especially in the last couple of years, therefore resulting in a

dramatic decline in the overall profit margins of the vendors. Moreover, vendors need to

change their product pricing strategy, which affects their overall revenue generation and R&D

investment. Also, the end-users require consistent maintenance and support from vendors, which

in turn increases the overall cost of ownership for the vendors. All these factors impact the

revenue of the vendors, thereby affecting the overall market.







15. Impact of Drivers and Challenges

Key

The impact of the drivers and challenges is graded on the basis of the intensity and duration of

their impact on the current market landscape. The magnitude of the impact has been

categorized as described below:



Moderately High - Significant impact on the growth of the market








16. Market Trends

Despite the presence of serious challenges, the Diesel Gensets market in Europe is witnessing

several emerging trends in the market. One of the major trends in the market is the increasing

focus of vendors on the Eastern European market. The rapid urbanization of the Eastern

European countries has led to more diesel gensets vendors coming into the market.

Some of the key trends in the Diesel Gensets market in Europe are discussed below:


Increasing Demand for Hybrid Generators




The rapid urbanization of the Eastern European countries has led to more diesel gensets vendors

entering the Eastern European market. The market provides more opportunities to these vendors

because of the increasing infrastructure and industrial activities. The increasing development

activities in Poland, the Czech Republic, Hungary, Russia, and Croatia have helped the vendors

to shift their business or marketing strategy toward the European market.

Increasing Demand for Hybrid GeneratorsThe Diesel Gensets market in Europe is witnessing an increasing trend in the demand for hybrid

generators, which run both on gas and diesel. Hybrid generators offer more cost and fuel

efficiency as compared to conventional generators. Unlike diesel generators, a hybrid generator

emits less harmful substances such as nitrogen oxide, carbon monoxide, and hydrocarbons.

Thus, the increasing demand for hybrid generators is expected to increase the growth of the

overall market.


The vendors are producing new products to differentiate themselves from the competitors.

Generators with comprehensive control and monitoring systems are being developed by a few

vendors, and this increases the overall efficiency of the generator. Similarly, user-friendly

generators are being developed by the vendors, which allow the end-users to operate the

generator easily, and without any proper technical knowledge.








The Diesel Gensets market in Europe provides opportunities for new mergers and acquisitions for

large vendors. As the market is highly fragmented with the presence of many international and

local vendors, there is intense competition. Vendors are trying to expand their market share and

their distribution channels through creating alliances with regional, small, and large companies.

Many vendors are also expected to acquire small and domestic suppliers during the forecast

period.







17. Trends and their Impact

Key

The impact of the trends is graded on the basis of the intensity and duration of their impact on

the current market landscape. The magnitude of the impact has been categorized as

described below:










18. Vendor Landscape

18.1

Competitive ScenarioThe Diesel Gensets market in Europe is highly fragmented with the presence of several large

vendors. Although the market includes a huge number of local vendors, it is dominated by few

major vendors. Many foreign vendors are expected to enter the market, as it provides more

opportunity to reap higher revenue when compared to other regions.

The major vendors in the market are Caterpillar Inc., Cummins Inc., and Kohler Co. The

increasing demand for power in Europe results in intense competition among these vendors.

Caterpillar Inc. dominates the Diesel Gensets market in Europe followed by Cummins Inc. and

Kohler Co., respectively. In order to sustain and grow in the market, the vendors are striving to

develop new equipment that is different from their competitors.

The vendors are trying to beat their competitors through various new innovative products,

increasing capacity, and grabbing new opportunities.

18.1.1

Mergers and Acquisitions

May, 2012: Cummins Inc. bought SCR doser technology from Hilite International

March, 2012: Kohler Co. acquired Maquigeral Industria e Comercio de Maquinas Ltda, a

Brazilian generator manufacturer

November 2011: Caterpillar Inc. acquired MWM Holdings GmbH

July 2011: Caterpillar Inc. acquired Bucyrus International Inc., a key leading mining

equipment provider in the market







18.2 Market Share Analysis 2013

Caterpillar was the leader in the Diesel Gensets market in Europe in 2013, and accounted for a

market share of 27-30 percent. This company offers large diesel generators to various industries. It

holds a strong position in the Industrial sector of this market. In addition, it has strategic

partnerships with other vendors in the market for technological advancements and product

distribution.

Exhibit 18: Diesel Gensets Market in Europe by Vendor Segmentation 2013

Cummins Inc. occupied the second largest share in the Diesel Gensets market in Europe and

accounted for a market share of 15-18 percent in 2013. The company offers a wide range of

engines and other power-generating products to various industries. It sells a majority of its

generators to the Commercial and Industrial sectors.

Kohler Co. occupied the third largest share in the Diesel Gensets market in Europe, with a market

share of 10-13 percent in 2013. The company has a good customer reach in the Residential

sector of the market. It also offers diesel gensets for rent to its end-users. In addition, it offers

towable generators, transfer switches, switchgear, and controls for standby, prime, and energy

management applications.







18.3 Other Prominent Vendors

Company Description

ABB Ltd. Global industrial automation technology

provider

GE Co. Global infrastructure and IT technology

provider

Siemens AG Global infrastructure and IT technology

provider







19. Key Vendor Analysis

19.1

Caterpillar Inc.

19.1.1

Business Overview

Caterpillar Inc. is one of the largest construction machinery and mining equipment

manufacturers in the world. The company has presence in more than 182 countries with more

than 180 dealers across the world. Through the acquisition of Bucyrus International Inc. in July

2011, the company enhanced its product portfolio.

The company offers a wide range of products and services through five major business

segments: Energy and Power Systems, Construction Industries, Resource Industries, Financial

Products, and Others. It offers a wide range of power generators and power engines through its

Energy and Power Systems segment.

The company reported revenue of US$65.88 billion in FY2012, which was 9.54 percent higher than

its revenue in FY2011. The company generated US$21.12 billion in FY2012 from the Energy and

Power Systems segment, which accounted for 32 percent of the company's overall revenue. This

segment generated 41.3 percent of its overall revenue from North America and more than 28

percent from the EMEA region in FY2012.

The company is investing heavily to expand its business. Some of the major business expansionsby the company in 2011 were the acquisition of Bucyrus, the development of an axle-

manufacturing facility, its investment of more than US$600 in large mining and truck

manufacturing activities, and a new manufacturing plant in Indonesia.







19.1.2

Business Segmentation

Exhibit 19: Business Segmentation of Caterpillar Inc.


19.1.3

Key Information

Company Details Description

Product Portfolio FG Wilson Series

CAT Product Series

Key Mergers and Acquisitions July 2011: Acquired Bucyrus International Inc., a key

leading mining equipment provider in the market

November 2011: Acquired MWM Holdings GmbH







19.1.4

SWOT Analysis

Strengths

Caterpillar is the largest vendor in theDiesel Gensets market in Europe.

The company continues to expand itsbusiness through various mergers andacquisitions.

The company has a diversified product

portfolio for various industries.

Weaknesses

The company's products are veryexpensive.

It relies heavily on industrial users forrevenue generation.

Opportunities

The company offers customizedgenerators, which gives it a competitive

advantage in the market.

It has a balanced position in both

mature and developing countries inEurope.

Threats

Large-scale mergers and acquisitionsactivity could decline the company's

profitability.

The increasing threat of local vendors in

Europe offering lower priced equipmentmay affect the growth of the company.







19.2 Cummins Inc.

19.2.1 Business Overview

Cummins Inc. is one of the leading manufacturers of diesel engine generators and engine-

related components. The company is involved in the design, manufacture, and distribution of

diesel and natural gas engines. It also engages in the manufacturing of engine-related

components such as filtration, exhaust after treatment, fuel systems, control systems, air handling

systems, and electric power generation systems. It is headquartered in Columbus, Indiana, and

employs more than 43,900 employees worldwide. This company operates in more than 190

countries. The company has a huge network of company-owned and independent distributors

across the globe. It operates majorly in four business segments: Engine, Components, Power

Generation, and Distribution.

The company reported revenue of US$17,334 million in FY2012, witnessing a decline of 3.96

percent in its revenue of US$18,048 million in FY2011.

19.2.2

Business Segments

Exhibit 20: Business Segmentation of Cummins Inc.


Cummins Inc.

Engine ComponentsPower

GenerationDistribution







19.2.3

Key Information


Product Cummins Power Generation D1703

Light Commercial Generators

Cummins Commercial Quiet Diesel™ and Standard

Diesel™ Series

60 Hz Cummins Onan Quiet Diesel™ Series RV

Generators

50 Hz Cummins Onan Quiet Diesel™ Series RV

Generators Cummins Onan Quiet Diesel™ Series

Rental Generators

Mergers and Acquisitions May, 2012: Acquired SCR doser technology from Hilite

International







19.2.4

SWOT Analysis

Strengths

Cummins Inc. has a diversified productportfolio for the Commercial andIndustrial sectors.

The company has strong presenceamong the commercial and

infrastructure sectors in the Diesel

Gensets market in Europe.

Weakness

The company's products are premiumpriced.

Opportunities

The company tries to improve its time-to-market, which in turn enhances the

company's sales.

The company can collaborate with

external R&D centers and strengthen itsR&D operations.

The company develops hybridgenerators, which could enhance the

company's market potential.

Threat

The increasing threat of low-cost andlocal vendors may affect the company

sales and entry strategies in theEuropean market.







19.3 Kohler Co.

19.3.1 Business Overview

Kohler Co., headquartered in Kohler, Wisconsin, US, is a diversified manufacturing company. The

company was established in 1873 and is widely known for its plumbing products, tiles,

generators, and engines. It also has good presence in the Hospitality sector. The company has

52 manufacturing locations across the globe and employs more than 30,000 people across six

continents.

Kohler offers diesel gensets under the Global Power business segment. The company offers diesel

gensets under the combined power brands of SDMO, Kohler Power Systems, and Maquigeral. Its

generators include marine gensets with power ranges of 4 to 500 kW, 10 to 3250 kW industrial-

grade powerhouses, and 8.5 to 125 kW residential standby generators. It also offers towablegenerators, transfer switches, switchgear and controls for standby, and prime and energy

management applications. The company reported revenue of approximately US$5 billion in

FY2012.

19.3.2 Business Segments

Exhibit 21: Business Segmentation of Kohler Co.


K o h l e r C o .

Kitchen & Bath

Global Power Diesel Gensets

Interiors and

Hospitality

Real Estate







19.3.3

Key Information


Product Portfolio Diesel Generators: 10REOZDC,15REOZDC, 20REOZDC,

20REOZT,125REOZJG,180REOZJG, and 2000ROZMC

Gas generators

Generator controls

Transfer switches

Paralleling system

Towable generators

Key Mergers and Acquisitions March, 2012: Acquired Maquigeral Industria e Comercio

de Maquinas Ltda, a Brazilian generator manufacturer







19.3.4

SWOT Analysis

Strengths

Kohler is one of the major vendors in theGlobal Diesel Gensets market.

The company offers a wide range ofproducts to its end-users.

Kohler's Global Power Group hasmanufacturing facilities in nine countries

across four continents with sales andservice facilities across the globe.

Weakness

The company is more popular as aplumbing product manufacturer,

therefore affecting its brand image inthe Diesel Gensets market in Europe.

Opportunity

With its financial strength, the company

can acquire other small and mediumplayers in the market, which mayimprove the overall revenue of the

company.

Threat

Intense competition is one of the

biggest threats for the company. Inaddition, Kohler lost US$9.6 million to oneof its competitors, Westerbeke Corp., for

some patent case.







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