Transformers Procurement Intelligence
In this transformers procurement intelligence report, we have assessed the pricing of the major cost components such as raw materials, labor, equipment tools, energy utilities, logistics, and others. Other costs include RD, compliance, warranty, rent, general administrative, and marketing sales.
As per data published by Federal Reserve Economic Data (FRED), the Producer Price Index (PPI) of ‘electric power and specialty transformer manufacturing’ in the U.S. stood at 333 in February 2023, ~20% up as compared to February 2022. Moreover, the same index rose further in February 2024, by ~10% (y-o-y growth). Key reasons for the rise in the index were increase in raw material costs, growth in labor costs, and escalation in energy costs during this period.
Suppliers in the transformers industry often use one of many pricing structures. Cost-plus pricing and volume-based pricing are two of the prominent pricing models being used. Other key pricing models such as competition-based pricing and demand-based pricing are also deployed in this industry. The cost-plus model guarantees that manufacturers cover their costs and achieve a profit margin. The volume-based pricing structure enables manufacturers to offer discounts on bulk purchases. The demand-based pricing enables manufacturers to optimize revenue and market positioning. For instance, during times of high demand, such as peak for construction seasons or periods of high energy consumption, prices of transformers can be raised to capitalize on buyers’ higher willingness to pay.
Key factors leading to variations in prices include raw material price fluctuations, design and specifications, demand and supply fluctuations, and transportation and logistics. For instance, the production of transformers relies on raw materials like steel, copper, and insulating materials. In 2024, shortages and increased costs of these raw materials due to geopolitical tensions, trade restrictions, and supply chain disruptions led to reduced supply and higher production costs. Similarly, transportation logistics factors may include shipping delays, heightened freight costs, and import duties, all of which lead to a rise in the overall transformers’ prices.
Order your copy of the Transformers category procurement intelligence report 2024-2030, published by Grand View Research, to get more details regarding day one, quick wins, portfolio analysis, key negotiation strategies of key suppliers, and low-cost/best-cost sourcing analysis
Operational Capabilities - Transformers
- Geographical Service Provision - 20%
- Industries Served - 15%
- Years in Service - 15%
- Employee Strength - 15%
- Revenue Generated - 15%
- Key Clientele - 10%
- Regulatory Certifications - 10%
Functional Capabilities - Transformers
- Transformer Type (Power/Distributed/SST/Others) - 30%
- Voltage Type (High/Medium/Low) - 25%
- Cooling Type (Oil-Cooled/Air-Cooled) - 20%
- Customer Service - 10%
- Lead Time - 10%
- Others - 5%
Rate Benchmarking
In 2024, average prices of oil-immersed distribution transformers in China ranged from USD 500 to USD 20,000 depending on capacity and specifications, and those of dry-type transformers spanned from USD 1,000 to USD 12,000. Power transformers in China (in 2024) were priced between USD 30,000 to USD 170,000. During the same year, the average prices in India for oil-immersed distribution transformers spanned in the range of USD 800 to USD 17,000 based on capacity and design variations. Dry-type transformers in India ranged from USD 300 to USD 9,000. Power transformers in India fell within the range of USD 12,000 to USD 90,000.
Supplier Newsletter
- In June 2024, Hyosung Heavy Industries announced its plans to augment its ultra-high voltage transformer manufacturing facilities in both the U.S. and South Korea, in response to the rising global need for electricity infrastructure. Under this plan, the company aims to broaden its existing testing and production capacities at its factories/plants based out of Memphis, U.S. and South Gyeongsang, South Korea.
- In February 2024, Hitachi Energy made an investment of more than 30 million euros to enhance its transformer operations in Germany. This investment involved the expansion and modernization of its power transformer manufacturing facility located in Bad Honnef. This initiative not only strengthens Hitachi’s global presence and capabilities but also responds to the rising transformer demand across Europe.
- In February 2024, Siemens Energy unveiled its plans to address the power transformers shortage throughout the U.S. by committing USD 150 million for expanding its operations in Charlotte, North Carolina. As a part of this plan, Siemens Energy plans to augment its current facilities by constructing transformer plant in Charlotte. This project has received backing from a Job Development Investment Grant (JDIG) provided by the state of North Carolina.
List of Key Suppliers
- ABB Ltd.
- Alstom SA
- CG Power Industrial Solutions Ltd.
- Eaton Corporation plc
- General Electric Company
- Hitachi Energy Ltd.
- Hyosung Heavy Industries
- Hyundai Heavy Industries Co., Ltd.
- Mitsubishi Electric Corporation
- Schneider Electric SE
- Siemens AG
- Toshiba Corporation
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Transformers Procurement Intelligence Report Scope
- Transformers Category Growth Rate : CAGR of 6% from 2024 to 2030
- Pricing Growth Outlook : 5% - 10% increase (Annually)
- Pricing Models : Cost-plus pricing, volume-based pricing, demand-based pricing, competition-based pricing
- Supplier Selection Scope : Cost and pricing, past engagements, productivity, geographical presence
- Supplier Selection Criteria : Geographical service provision, industries served, years in service, employee strength, revenue generated, key clientele, regulatory certifications, transformer type (power/distributed/SST/others), voltage type (high/medium/low), cooling type (oil-cooled/air-cooled), customer service, lead time, and others
- Report Coverage : Revenue forecast, supplier ranking, supplier positioning matrix, emerging technology, pricing models, cost structure, competitive landscape, growth factors, trends, engagement, and operating model
Our services include (not limited to):
- Market Intelligence involving – market size and forecast, growth factors, and driving trends
- Price and Cost Intelligence – pricing models adopted for the category, total cost of ownerships
- Supplier Intelligence – rich insight on supplier landscape, and identifies suppliers who are dominating, emerging, lounging, and specializing
- Sourcing / Procurement Intelligence – best practices followed in the industry, identifying standard KPIs and SLAs, peer analysis, negotiation strategies to be utilized with the suppliers, and best suited countries for sourcing to minimize supply chain disruptions
Brief about Pipeline by Grand View Research:
A smart and effective supply chain is essential for growth in any organization. Pipeline division at Grand View Research provides detailed insights on every aspect of supply chain, which helps in efficient procurement decisions.
