TOP 5 CONSTRUCTION EQUIPMENT MARKET TRENDS 5 2 In 2021, The Global Construction Equipment market had a 6% volume growth compared to 2020. Currently, the market reported an estimated sales of ~1.19M units of construction equipment globally. China being the market leader, had a 4.6% YoY sales growth of excavators. North America and Europe markets recovered well in 2021 due to strong residential construction which acted as a major growth driver of the industry. On a year-over-year basis, sales to users grew in all segments and all regions of Asia-Pacific. Many OEM’s results of operations are materially affected by economic conditions globally and regionally and in particular industries. The demand for the products and services are cyclical and can be significantly reduced in periods of economic weakness characterised by lower levels of government and business investment, lower corporate earnings and many more. In developed markets, customers tend to prefer more sophisticated machines equipped with the latest technology and features to improve operator productivity. In developing markets, customers tend to prefer equipment that is relatively less costly and has greater perceived durability. In North America and Europe, where the cost of machine operators is higher relative to fuel costs and machine depreciation, customers typically emphasize productivity, performance and reliability. In other markets, where the relative cost for machine operators is lower, customers often continue to use the equipment after its performance and efficiency have begun to diminish. We have analysed the top 5 Construction Equipment trends in 2022, affecting the global markets 1.Digitalization of Construction Machineries Digitization is reshaping the facilities that automate work processes, Trailblazing excavators, cranes and bulldozers are being equipped with a broad range of sensors and communication interfaces. The machinery data collected by sensors every day is valuable information that can be used in the increasingly reality-driven product development Assistant systems that are designed to simplify operations will result in new control elements and displays which eventually increase the demands on the operator in the process. Furthermore, the data is used to check the machinery’s on-the-job performance, fuel consumption and locations, to define predictive maintenance, to more precisely determine operating costs and to manage entire fleets via telematics. OEMs are integrating the intelligent assistant systems for mammoth-sized machines, which incorporate active object recognition systems. The system uses sensors to solely distinguish between people and static objects. When people are detected within the hazard zone, the system sends out a warning at a greater distance than it does for other static objects. This digitalization will increase safety on constructions along with preventing drivers from becoming tired and help relatively inexperienced users be more productive. New functions, operating systems and additional communication and documentation tasks are set to be fused with upcoming machines which will enhance the complexity of the driver’s cabin. 2. Integration of Advanced Telematics Telematics systems have become a new level of standard in construction equipment by the means of features offered by the OEMs. It’s a combination of GPS technology, onboard diagnostics and monitoring sensors to track, log and report data via cellular networks on the performance and operation of construction equipment. These systems can provide machine diagnostics alerts that help prevent downtime, theft, and misuse. Many manufacturers are using telematics that allow the machine to communicate vital information to fleet managers and equipment owners. Almost all OEMs present telematics with their tailored features. Komatsu offers telematics free for the life of equipment ownership while its distributors provide consultations to customers detailing the use of telematics data. Caterpillar’s telematics solution helps any OEMs provide machine owners and operators with the ability to view critical data output in real-time and to make better use of their equipment’s operation. Equipped with remote services capabilities, the engine-integrated telematics solution can help minimize downtime via remote troubleshooting that can run diagnostic testing and helps to clear out the potential issues while the machine is in operation Advanced analytics and decision-making are the future of telematics, where the equipment would be capable of evaluating itself and its conditions to make decisions about parts and services with the consent of the owner. 3. Electrification in the Industry The Mobility industry is currently in the process of Electrification all over the globe. Electrified Construction Equipment is gaining Momentum, as more manufacturers are developing electric-powered construction equipment to meet increasing emissions regulations and provide efficiency improvements Factors to be considered in electrification of construction equipment are: To achieve the goal of reducing emissions from construction equipment fleets must combine other technologies which should be advanced along with it. In the development of additional hybrid solutions, there is research being done on hydrogen vehicles with fuel cells, the problem is of tank space since hydrogen requires a significantly larger volume than diesel for the same energy content. Currently, Volvo CE is leading the electric excavator market, with a total of five electric machines in the market. These Electric compact vehicles use the same machine structures as their diesel equivalent, which provide a high level of operator comfort, the same hydraulics systems and optimized lifting and digging capabilities. From February 2020, Volvo Construction Equipment has been accepting orders for its ECR 25 Electric compact excavator and L25 Electric wheel loader. The machines are offered in 13 countries and have been delivered to end customers. CASE construction equipment developed an electric construction machine which was the world’s first all-electric backhoe loader. In the drives of construction machinery, electrics and hydraulics are currently in healthy competition in all regional markets. 4. Rise of Automated Construction Equipment Construction industry expenditure in robotics is projected to grow fastest in the coming years. The average annual growth rate will exceed 15% by 2023, only if the industry expands with the current pace. Beginning with Increased efficiency, increased safety to reduced need for skilled labor, many factors propel the innovation in autonomous construction equipment. To increase productivity, OEMs are infusing their vehicles with more than 20 sensors and 20 electro-hydraulic drives in an average-sized machine, to increase its productivity and energy efficiency in a process that drives down overall operating costs. Caterpillar has already hauled 2 billion metric tons with self-driving trucks. These machines first appeared in the mining sector but have moved into construction sites. Most of these machines work by using a system of cameras and sensors. Data from LiDAR, cameras, GPS, RFID, and even vibration and temperature sensors guide them throughout the workplace safely and efficiently. Emerging startups are working on a retrofitting approach to automation. An alternative to create new self-operating machines, they modify existing equipment to operate autonomously. Autonomous Wheel Loader – Volvo LX03 At the beginning of 2020, Volvo Group established the Volvo Autonomous Solutions business unit. In October 2021, Volvo CE showcased the ZEUX LEGO Technic Model with an Autonomous, Battery-electric Wheel Loader Prototype. It has been built with components based on the existing L25 Electric drivetrain with zero-emission and low-noise machine with a runtime of up to eight hours depending on its application. 5. Improvement in Efficiency of the Vehicles Across all markets Construction companies have faced the task of increasing their productivity while operating as sustainably as possible. This is the kind of industry where achieving the goals of environmental protection and economy will come together flawlessly. Past 20-30 years wired electric machines have long been commonplace in the industry, battery-powered solutions have also been the priority for some years now. OEMs are improving the efficiency in all terms, as operating huge equipment such as this using solar power only on conditional worksites. In contrast, manufacturers are currently still struggling with electric solutions for high-power-range machinery as the power required for the type of work. The main problem that they are facing right now is weight reduction by all means. For example, an average weighing excavator of about 15 tons would require an 8-ton battery pack for a day shift with sufficient energy and with current technology. CONCLUSION China is the biggest market for construction equipment especially for excavators with a market share of 39%, North America – 19%, Europe – 14%, India and Japan have 11% combined in 2021. The growth will be mainly driven by continued strength in the housing market, Infrastructure development, increased activity in the oil and gas sector, as well as strong CAPEX plans. India and China have high growth rates in sales of equipment, The emergence of a wave of new technologies such as intelligent automation, electrification and digitalization has brought new changes and challenges to this construction machinery industry in recent years along with the government initiatives and private investment towards the sector will be very vigorous for next 5-10 years. In the U.S, The Infrastructure bill has created a push and hope for future stipulations for various sectors and demand for earthmoving and compact construction equipment is expected to exceed the production capacity for 2022-23. Akshay Prakash, Research Analyst at Mobility Foresights
