Autonomous Construction Equipment to Bring Changes in the Construction Industry During the Forecast Period

. The MarketsandMarkets’ study estimates the Construction Equipment Market to grow at a CAGR of 4.52%, to reach a market size of USD 199.18 billion by 2025

(EMAILWIRE.COM, October 20, 2018 ) With increase in population and urbanization, there is an increase infrastructure spending by various governments, which in turn is estimated to fuel the demand for construction equipment. The MarketsandMarkets’ study estimates the Construction Equipment Market to grow at a CAGR of 4.52%, to reach a market size of USD 199.18 billion by 2025 from an estimated market size of USD 146.17 billion in 2018.

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1.1 ASIA PACIFIC & MIDDLE EAST: A PROMISING MARKET FOR CONSTRUCTION EQUIPMENT

Asia Pacific is estimated to dominate the construction equipment market and is projected to be the largest market during the forecast period. It is estimated to account to more than 30% of the market share in 2018 which is expected to grow at a CAGR of 5.16% from 2018 to 2025. The key reason of this growth is - increase in the infrastructural activities in countries such as China and India. For instance, in 2017, China invested USD 2.6 trillion for fixed-asset investment. China's public capital expenditure was estimated to be the equivalent of 13.4% of GDP in 2015. This has resulted to the increased in infrastructure activities, which has indirectly increased the construction equipment demand.

The study estimates loaders and excavators account for have major stake, as loaders accounts to have more than 45% market share in the Chinese Construction Equipment market whereas, excavators accounts to have more than 40% stake in the Indian Construction Equipment market.
The construction equipment market in the Middle East region is projected to grow at the highest CAGR during the forecast period. This growth can be attributed to the increasing infrastructure spending in economies such as Qatar, the UAE, and Saudi Arabia. Qatar will be hosting the 2019 IAAF Athletics Championship and the 2022 FIFA World Cup. Saudi Arabia has presented its Vision 2030.

Major players can use this opportunity to expand their market share in the Asia Pacific & Middle East by designing equipment suitable for the region. This will provide them with an upper hand over the competition.

1.2 SCR TO BE THE LARGEST SEGMENT OF THE CONSTRUCTION EQUIPMENT AFTERTREATMENT DEVICES MARKET

The demand for construction equipment is estimated to grow globally, particularly in Asian countries. As per MarketsandMarkets Analysis, the three Asian countries—China, India, and Japan—are estimated to account for more than 30% of the global construction equipment sale in 2018. North America would account for more than 20% sales of construction equipment in the same year. The growing sales of construction equipment, which use heavy-duty diesel engines, has led to the formation of stringent emission regulations. With each upgrade in the regulation, the permissible emission limits have reduced. Increasing stringency of emission regulation has led to advancements in the engine technology and aftertreatment devices. The proposed and speculated regulations are discussed in the below figure for select countries.

Emission regulations have a significant impact on the market for off-highway engines. Growing environmental concerns and awareness of the harmful effects of vehicular emissions have forced engine manufacturers to develop advanced engines that comply with the new norms. The development of advanced engines has, in turn, increased the spending on R&D activities of the company. In addition, the advancements in the engine technology have boosted the market for aftertreatment devices. However, small regional manufacturers may not possess the technical expertise needed to develop engines that comply with current or future emission norms.

The construction equipment market, by aftertreatment device, is led by the Diesel Particulate Filter (DPF) in 2018, whereas by 2025, Selective Catalytic Reduction (SCR) is projected to be the largest market. This growth is attributed due to the stringent emission regulations that are speculated to be adopted in Asia Pacific during the forecast period.

1.3 NEW PRODUCT DEVELOPMENT TO BE THE KEY STRATEGY ADOPTED BY MANUFACTURERS

The increasing demand for safety and convenience have changed the market dynamics for construction equipment manufacturers. Key strategies adopted by the major players is new product development. For instance, Case, a subsidiary of CNH Industrial, has launched CX145D SR to its D series lineup. It is a highly mobile and powerful excavator that is easy to transport and ideal for restricted constructions sites. The rising demand for safety and convenience as well as high growth in emerging markets has encouraged companies to adopt this strategy. The companies that adopted this strategy are Volvo Construction Equipment (Sweden), John Deere (US), JCB (UK), Zoomlion (China), CNH Industrial (Netherlands), Caterpillar (US), and Liebherr (Switzerland). Expansion is another key strategy prevailing in the market, e.g., Komatsu established a technical center in Japan that has helped the company in improving its design quality. Other companies that adopted this strategy include Caterpillar (US), Liebherr (Switzerland), Volvo Construction Equipment (Sweden), and John Deere (US).

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