According to Sriram, Chinese manufacturers are competing very aggressively in Southeast Asia and Australia/New Zealand (ANZ) - markets which she says are already “cut-throat”.

“If we look at the 500kW to 1MW [genset] range, the average price is around US$0.8 million. But the Chinese products cost much less, around $0.5 million.”

However, Chinese genset manufacturers don’t have a significant service or distribution network across Southeast Asia or ANZ, says Sriram. “They don’t have a presence. But, a lot of local importers and packagers will buy their equipment and repackage them," she says.

Domestic firms account for a small proportion of large genset sales, although they are stronger in the market for smaller capacity machines. Multinational OEMs - Caterpillar, Cummins, MTU Detroit Diesel, Mitsubishi, and John Deere - take around 85% of the Southeast Asian market says Sriram, while in ANZ they take a “major portion”.

But price is the major decision-making factor across all size ranges, says Sriram; this is squeezing profit margins of established players already beleaguered by loss of market share from cheaper imports.

Overall, Sriram sees a robust market for stationary gensets in Southeast Asia. Market revenues reached US$281.1 million in 2006, and are forecast to reach US$504 million by the end of 2013.

Sriram sees particular potential in Indonesia, Phillipines and Vietnam where the power infrastructure is less developed. “You have a lot of remote areas, lots of islands which are not connected to the grid," she says.

Nevertheless, she says, standby power - rather than baseload - is the key driver for genset markets. In ANZ, 40-50% of the genset market is for commercial building standby power, while another 30% is for industrial standby. In Southeast Asia (excluding China), standby power accounts for around 90% of the genset market.

Sriram says diesel is still the most popular fuel, and will remain so until gas networks are sufficiently developed. While environmental considerations are driving new sales - concerns about noise regulations for example, are forcing users to continuously upgrade - renewable power itself is not a serious threat to the fossil-fired genset market.

“Where you might have a problem transporting a diesel genset [to a location], there’s potential for renewable,” she says, adding that solar and solar/diesel hybrid solutions are working out well in telecoms applications.