Power Solutions International Inc 's Comment on Competition and Industry Peers
We believe we are one of the few providers of comprehensive power systems to
the industrial OEM market. However, the market for our products and related
services is intensely competitive, subject to rapid change and sensitive to
new product and service introductions and changes in technical requirements.
Some competitors have longer operating histories, strong name recognition and
significant financial and marketing resources. Competition in our markets may
become more intense as additional companies enter them and as new technologies
are adopted. Generally, we believe that the principal competitive factors for
our business include the following:
Completeness and comprehensiveness of power systems;
Range of power systems employing a common technology platform;
Emissions regulation (EPA and CARB) compliance and certification;
Industry leading product and applications engineering;
Ease of installation;
Pricing and cost effectiveness;
Breadth of product offerings, including system power and fuel alternatives;
Ability to tailor power systems to specific customer needs;
Performance and quality; and Customer support and service.
We believe that, with our current product lineup and our ongoing research and
product development efforts, as well as our global procurement capabilities,
we are able to compete effectively based on each of these factors.
Among our competitors are fuel system providers such as Westport Innovations,
Inc., Fuel System Solutions and Woodward Governor, Inc. These companies supply
engines and engine system componentry into the industrial OEM marketplace. However,
we do not believe that any of the other fuel system providers with which we
compete are able to provide the single assembly, integrated, comprehensive power
systems that our OEM customers demand and that we provide on a cost-effective
basis. Further, some of our competitors do not have the internal resources or
capabilities to enable them to meet these customer requirements and, in their
efforts to compete, sometimes rely upon third party logistic companies to fit
and dress engine systems with specific engine parts and components which these
competitors are unable to provide themselves. As a result of the changing environment
of the marketplace, some fuel system providers have been forced into non-core
competency areas and some have exited the marketplace entirely.
Other competitors have been automotive engine companies, but a number have ceased
directly supplying power systems to industrial OEMs (although they continue
to supply their standard engines and components to producers of power systems
for this market). They have left this market primarily because production of
emission-compliant and certified industrial engines is not in their core competency
area and because the changing regulations create difficulties for them, as engine
life spans are short. More generally, we believe that the significant costs
associated with developing and certifying emission-compliant power systems as
applicable regulations change have led some companies to exit our markets and
have deterred others from entering them.
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