Demand for off-road equipment featuring state-of-the-art technologies to fuel rising unit sales to US$481bn this year

April 26, 2022
By Guy Woodford
A new Freedonia report says demand for off-road equipment featuring state-of-the-art technologies will fuel unit sales growth of 5.5% between 2021 and 2022 to $481 billion, slightly above 2019 levels
A new Freedonia report says demand for off-road equipment featuring state-of-the-art technologies will fuel unit sales growth of 5.5% between 2021 and 2022 to $481 billion, slightly above 2019 levels

According to a new report by Freedonia, investment in new and replacement off-road equipment featuring state-of-the-art technologies will fuel unit sales growth of 5.5% between 2021 and 2022 to $481 billion, slightly above 2019 levels.

The U.S.-based business market intelligence consultancy notes in Global Off-Road Equipment Technology 2022 says that many buyers are attracted to more smart tech-equipped machines due to their offer of greater efficiency and productivity. These include:

  • autonomous and semi-autonomous equipment, such as robots
  • fuel-efficient and low- or zero-emission equipment
  • units with advanced ergonomics that provide improved operator comfort and safety
  • drones, global positioning, predictive maintenance, and other solutions made possible by developments in the Industrial Internet of Things (IIoT)

Smart off-road equipment sales are projected to grow 35% in 2022 and then more than double by 2026, when they will account for nearly 5% of all off-road equipment demand. Construction is currently the largest market for smart equipment. However, demand will expand most quickly in the mining sector (which is expected to become the leading market for smart off-road equipment technology by 2026) as operators increasingly use advanced technologies – such as autonomous equipment and digital mine management solutions – to lower costs and boost output.

High production costs and labour shortages mean that advanced off-road equipment is typically most cost-effective in high-income countries like Australia, Canada, Germany, and the US. The use of state-of-the-art technology will remain limited in lower- and mid-income nations, where profits are less influenced by labour costs and emissions standards are generally less stringent. The mining industry is a notable exception since many of the world’s largest mines – which are operated by multinational companies that can afford advanced, high-end machinery – are located in lower-income countries.

Freedonia notes that China is by far the largest consumer of off-road equipment, accounting for 31% of demand in 2021. The country is forecast to represent 26% of absolute global gains in 2022. However, opportunities will differ between the major markets:

  • Mining and agriculture will see solid growth as these markets continue to recover from the pandemic-related declines in 2020.
  • Construction will advance more slowly from a high base, as the market for this equipment posted significant gains in 2020 when a combination of strong government spending and China’s ability to mitigate negative economic effects from the pandemic’s initial phase spurred investment in new and replacement construction equipment.

As a result of these trends, the global construction machinery market is expected by Freedonia to decelerate in 2022, while the mining machinery and agricultural equipment markets will continue to grow at a rate similar to 2021.

 

Originally published on Aggbusiness.com

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