China to Remain Leading Consumer of Construction Equipment, Says TMR

According to Transparency Market Research (TMR), the competitive landscape of the global construction equipment market is heavily consolidated, with the top three players - Caterpillar Inc., Komatsu Ltd., and Hitachi Construction Machinery - accounting for around 50% of the market. Caterpillar, the global leader, has made technological leadership a priority, along with strategic mergers and acquisitions to expand its overall portfolio.

The widespread regional coverage of Caterpillar Inc.’s operations means they have established firm connections with dealers and other components in the industry’s supply chain, helping hassle-free operation. Other leading players in the global construction equipment market include Atlas Copco Construction & Mining, Terex, Volvo, John Deere (Deere & Company), Escorts Ltd., JCB Service, and Doosan.

Rapid Infrastructure Development in Emerging Nations Generates Demand for Construction Equipment

One of the prime driving factors for the construction equipment market is the steady development of the infrastructure in developing economies. Countries such as China, India, South Korea, Turkey, Brazil, South Africa, and Argentina are witnessing rapid urbanization due to the high availability of lucrative opportunities in urban centers. This has led to a steady demand for urban infrastructure, providing a steady source of revenue for construction equipment manufacturers.

“The rapid development of urban centers has also necessitated increased mining of metal ores, various types of fuel, and other components required to deliver topnotch infrastructure,” according to TMR’s lead analyst. This has also generated significant revenue for the construction equipment industry and is likely to remain an influential end user in the coming years.

The consistent technological advancement in construction equipment has also been beneficial for the global market. Modern construction equipment features the use of automation technology and is significantly aided by computers, both of which make the construction equipment much more reliable. New construction equipment is also likely to consume less energy than conventional construction equipment, thanks to the widespread prevalence of environmental protection laws across the world.

High Costs Threaten Adoption of Construction Equipment, Leasing to Remain Popular Mode of Use

Being heavy machinery, construction equipment requires high installation costs. While this may not be an issue for large contractors, who can afford to maintain their own fleet of construction equipment, smaller players in the construction market prefer leasing construction equipment. This has emerged as a suitable compromise for the construction equipment industry and is likely to remain this way in the coming years.

Another key restraint on the construction equipment market is the conspicuous differences in import and export duties across the world. Though not a heavily influential factor, this complicates the import-export dynamics of the construction equipment market significantly.

China to Remain Dominant Market, Earth Moving Equipment Leading Product Segment 

By product type, the construction equipment market is segmented into earth moving equipment, material handling equipment, and concrete and road construction equipment. Of these, earth moving equipment was the dominant product segment, with an estimated 2016 valuation of close to US$80 bn and projected 2017 valuation of US$84.6 bn.

Regionally, China emerged as the leading segment of the global construction equipment market and is likely to remain in the top spot through the forecast period. The rapid urbanization in China, coupled with the intensive infrastructure development in the underdeveloped Western provinces of China, will provide sustained demand for construction equipment manufacturers through the forecast period.

The information presented in this review is based on a Transparency Market Research report, titled, ‘Construction Equipment Market - Global and China Forecast, Market Share, Size, Growth and Industry Analysis, 2011 - 2017.’

The global construction equipment market is segmented as follows:

Construction Equipment Market by Type

  • Earth Moving Equipment
  • Material Handling Equipment
  • Concrete and Road Construction Equipment

Agriculture Equipment Market by Type

  • Tractors
  • Harvesting Equipment
  • Plowing and Cultivating Equipment
  • Planting and Fertilizing
  • Other Agricultural Equipment

Construction Equipment Market by Geography

  • U.S.
  • Europe
  • Asia
  • RoW

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