This study investigates the dynamic characteristics of Synchronous Reluctance Motor (SynRM), with segmental rotor structure, using finite element method in which the moving mesh technique is considered. The focus of this paper is the efficiency of on-line parameter identification system for position sensorless control of a SynRM considering saturation and iron loss. Comparisons are given with angle of the observer and those of proposed FEM & Preisach model of synchronous reluctance motor, respectively. The position sensorless control using identified motor parameters is realized, and the efficiency of the on-line parameter identification system is verified by experimental results.