Industrial Automation 4th November 2019

Inovance Expanding Internationally with BST Acquisition

Blake Griffin
Blake Griffin

Blake is an expert in automation systems, industrial digitalization, and off highway-electrification. Since joining Interact Analysis in 2017, he has written in-depth reports on the markets for low voltage AC motor drives, predictive maintenance, and mobile hydraulics.

On the 15th October 2019, China-based automation equipment manufacturer Inovance announced the acquisition of elevator component vendor BST. Inovance plans to merge BST with its existing elevator controls division, Monarch, to form a new division named Monarch BST.

While Inovance offers a broad portfolio of automation equipment, we believe this acquisition to be largely a motor drives play. Inovance made its name in China by producing low-cost drives targeted at the elevator industry. Since entering the market, the company has grown dramatically, and now is a pioneer in this space by offering drives with integrated elevator control capability.

By our estimates, Inovance is the third largest low voltage motor drive vendor in the Chinese market, behind ABB and Siemens. The company has expanded its offerings to target other applications; however, we believe elevators remain Inovance’s single largest application for its motor drives business. Using data sourced from our newly published low voltage AC motor drive market report, you can get a sense of scale of the elevator, escalator, and lift sector within China.

The elevator, escalator, and lift sector is the third largest market for motor drives in China worth an estimated $193.6 million in 2018. To put that in perspective, China’s market for drives sold into the elevators, escalators, and lifts sector is $19.5 million shy of being larger than the rest of the world combined.

While Inovance is incredibly strong domestically within the Chinese market for drives, the company does not have a large presence internationally. According to records found in the public domain, Inovance’s overseas revenue accounted for only ~2.5% of the company’s total revenue in 2017 which could indicate the strategic thinking behind the acquisition of BST.

BST is an elevator equipment supplier based out of Shanghai which has a significantly larger international presence than Inovance. It claims that it holds customers in 83 countries. Given this, we believe Inovance has acquired BST as a mechanism for growing its elevator drives business by leveraging BST’s international presence. Inovance already has developed a core competency in the elevator drives space, so doubling down on this competency to expand internationally makes a lot of sense.

Supporting this theory that the acquisition is aimed at expanding internationally is the location where the announcement was made. As two Chinese based companies, it is not a coincidence that the announcement of the merger between Monarch and BST was made at Interlift in Germany, the largest international tradeshow for the elevator industry. Compounding this point was the promotional video Inovance released announcing the acquisition. During the video, there is a point which shows Monarch’s NICE3000 integrated elevator controller and it advertises that it is EN 81-20 rated – a European safety standard. Clearly Inovance has global ambitions and the acquisition of BST is a significant launching point for those aspirations.

It will be interesting to see how Inovance’s movement to international markets impacts the price of drives in those regions. Inovance’s strategy when entering the Chinese market was to be a low-cost supplier. The success of this strategy, proven by Inovance’s significant share of the region, cannot be understated. As a result of this low-cost strategy, average selling prices of drives to China have experienced significant price pressure to the point of seeing price erosion of 5-7% in some recent years. It will be interesting to see whether the company employs a similar strategy as it enters new markets. If so, we expect the average selling price of drives within the elevator, escalator, and lift sector to experience increased price pressure globally.


Inovance has proven before that it can be a very disruptive force when entering a new market. We have no reason to expect this will be any different as the company begins to expand globally. The formation of Monarch BST is the company’s first major step towards launching a campaign to increase its international presence, and its progress should be monitored by any drive manufacturer who does significant business within the elevator, escalator, and lift sector.


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Data referenced in this insight was sourced from our recently published report covering the market for low voltage AC motor drives. Our Low Voltage AC Motor Drive Market – 2019 report comprises over 620,000 data points and has achieved an unprecedented depth of data.

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Posted in: Industrial Automation.