Generators, being used in countless industrial and commercial establishments to supply power for critical applications, have been witnessing a significant increase in demand for uninterrupted and reliable power supply.  This in turn, has resulted in increased sales of generators. They are used for small loads, such as homes, as well as for larger loads like industrial plants, hospitals, and commercial buildings, thereby being a prime source of power or standby/back-up power sources.

Market overview

The global generator sales market which is estimated to be worth USD 20.93 Billion in 2018 is projected to grow at a CAGR of 5.41% during the forecast period 2018-2023, reaching a size of USD 27.24 Billion by 2023.

Based on fuel type, the diesel segment is estimated to hold the largest market share in 2018, and also during the forecast period. This growth can be primarily contributed to wide use of diesel generator sets in various industries due to the easy availability of fuel and spare parts, ease of storage, capacity to handle varying loads, and quick response time. However, the natural-gas segment is expected to grow at a faster rate over the forecast period, owing to the increased adoption by the developed nations in order to reduce emissions.

Among end-users, the industrial segment is projected to hold the largest market share in 2018, and is also expected to witness the highest growth over the forecast period. This growth can be attributed to the rapidly growing industrialization in developing nations such as India, Bangladesh, Taiwan, Algeria, and Nigeria and the growing oil & gas sector in China, Mexico, Canada, and African nations.

Based on power rating, the above 1,000 kVA segment is expected to witness the fastest growth, owing to its application in a wide range of end-user industries for prime and continuous supply and the increasing use of natural gas for the above 1,000 kVA generators.

How is the market progressing, geographically?

Among regions, Asia Pacific is projected to be the largest and the fastest-growing market over the forecast period, owing to the high demand for power products in China and India. Moreover, the high economic growth rate of China has led to an increased demand for power generation equipment such as diesel and gas generators. Also, the new policy reforms in India in support of the growth of industries have led to lucrative growth opportunities for the OEM manufacturers, which in turn is also likely to create a huge demand for generators in this region. Furthermore, the growing IT and healthcare sectors in China, Australia, India, Singapore, and South Korea are expected to play a significant role in the growth of the generator sales market in the Asia Pacific region.

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What are the factors driving and restraining the market growth?

The growth of the global market for generator sales is being primarily influenced by the following factors:

• Rising demand for uninterrupted and reliable power supply
• Growth of healthcare infrastructure
• Increasing demand for IT infrastructure management
• Rapid urbanization in developing nations

Apart from these, growing demand for emerging economies and hybrid generators, bi-fuel, and inverter generators are expected to further create an array of growth opportunities for the market.

However, rising adoption of energy storage technologies and significant investment for the modernization/upgradation of existing T&D infrastructure are the major factors expected to restrain the market growth. Moreover, high life cycle cost of internal combustion engines and strict emission and noise control norms are the key challenges to be overcome by the companies involved in this market.

Major players and sustainability strategies adopted

Caterpillar (US), Cummins (US), Rolls-Royce (UK), Mitsubishi (Japan), Yanmar (Japan), and Kohler (US) are the major companies operating in the global market for generator sales. These companies are adopting growth strategies such as new product launches, contracts & agreements, mergers & acquisitions, and expansions in order to increase their market shares as well as maintain their market position.