The global traction transformer market is characterized by the presence of many global, regional, and local vendors. The market is highly competitive with all the players competing to increase their market shares. High competition, rapid advances in technology, frequent changes in government policies, and stringent environmental regulations are some of the key factors that could restrain market growth. The vendors compete based on cost, product quality, reliability, and aftermarket services. It is crucial for vendors to provide cost-effective and efficient products to succeed in a competitive market environment.
The growth of the market vendors is dependent on market conditions, government support, and industrial development. Thus, the vendors should focus on expanding their presence and improving their services. ABB, Siemens, Toshiba Corporation, Mitsubishi Electric Corporation, Altrafo Srl, Emco Limited, Alstom, JST Group, International Electric Co Ltd, Schneider Electric, Hind Rectifiers Limited, CG Power and Industrial Solutions Limited, and WEG are some of the major players in the market. These companies compete in terms of availability, quality, price, and technology. Although the international players are dominating the market, regional and foreign players with small market shares also have a significant presence. The international players may strengthen their presence in the global market by heavily investing in product development during the forecast period.
THREAT OF NEW ENTRANTS
The research and development cost in traction transformer is high and span of developing traction transformer is lengthy, which lowers the threat of new entrants in the market. The high technological complexity also acts as an entry barrier in the market, due to dimension restrictions defined by the default dimensions of rolling stocks. The industry is dominated by a few large players, who maintain a substantial market share. Therefore, the threat of new entrants in the market is low.
BARGAINING POWER OF SUPPLIERS
There are a substantial number of suppliers of raw materials and components in the traction transformer market, making the supplier concentration high. Raw materials and components for power transformers, including aluminum, copper, iron, windings, insulating materials, and bushing metal parts are easily available in the market. Further, raw material differentiation is very less, limiting the bargaining power of suppliers in the market. Hence, the bargaining power of suppliers in the traction transformer market is low.
BARGAINING POWER OF BUYERS
The buyers in this market have a high concentration due to concentrated authorities as the buyers consists of only the authorized railway department. In most cases, buyers procure traction transformer through competitive bidding, giving them a considerable power in the traction transformer market. However, many end users are willing to pay a premium price for quality products in the market, which again leverages the bargaining power to the buyers. Such factors determine the bargaining power of buyers in the traction transformer market high.
THREAT OF SUBSTITUTES
There are no substitutes for the traction transformers due to limitations on the construction of the traction transformer. Transportation & infrastructure networks depend on the traction transformer to step-down the voltage of the motors fitted in the rolling stocks to feed power for running the traction motors, to minimize transmission losses. Such factors are expected to lead to a low threat of substitutes in the market.
RIVALRY
The growth of the traction transformer market is growing with the increasing demand for transportation across the world. There are a few large players in the market, which makes the market highly competitive. Also, the product differentiation is moderate in the traction transformer market due to the need for manufacturing more efficient traction transformers. This makes the intensity of rivalry in the market high.
