- One in three construction machines sold in 2022 had embedded connectivity.
- The connected construction machinery market is expected to see an annual growth rate of 11% over the next eight years.
- The top five players – Caterpillar, XCMG, Sany, Komatsu and Volvo – captured 60% of connected construction machine shipments in 2022.
San Diego, Buenos Aires, London, New Delhi, Hong Kong, Beijing, Seoul – April 27, 2023
Global connected construction machine shipments grew 6.7% YoY in 2022 despite a decline in overall construction machine shipments, according to Counterpoint’s latest Global Connected Construction Machine Market report. One in three construction machines sold had embedded connectivity. The slowdown in China’s construction activity impacted the shipments of Chinese players and overall global shipments. However, due to a 10% YoY increase in the average selling price (ASP) in 2022, construction machine revenues grew 3% YoY to reach $213 billion. The ASP increased due to supply shortages and addition of features like electrification and connectivity.
Construction machines refer to equipment, machinery and vehicles specially designed for construction tasks such as excavation, loading and unloading, moving materials, material handling and demolition. The construction machinery also includes mining machinery applications like rock drilling, rock cutting, crushing and tunneling. Engineering and construction projects are complex and difficult to manage. Connected machines help measure construction activity, which is regarded as a barometer of economic prosperity for any region.
Commenting on connected construction machine brand dynamics, Senior Research Analyst Soumen Mandal said, “Construction machinery is a highly concentrated market with the top five players – Caterpillar, XCMG, Sany, Komatsu and Volvo – capturing 60% of connected construction machine shipments in 2022. Smaller players like Liebherr are aiming to make inroads by providing connectivity in a larger proportion of their SKUs. JCB and Hitachi cater to the lower end of the market by offering cost-effective solutions and have fewer machines with connectivity. We expect significant growth opportunity for connectivity for these brands in the coming years.”
The demand for connectivity is driven by theft prevention, predictive maintenance, automated operations, distance monitoring, AR/VR-based simulation and usage-based applications like insurance, vehicle financing and rental services. The tracking of machine assets also helps schedule construction operations in a better way and complete projects on time. Orbcomm, Teltonika, Calamp, syniotec, Machinemax, Trackunit, VisionTrack, Tenna, Trimble and DPL Telematics are a few among many players embedding connectivity in heavy construction machines while offering complimentary services like connectivity and device management platforms.
Commenting on the market outlook, Associate Director Mohit Agrawal said, “Global construction machine shipments are likely to remain flat and reach 2.33 million units by 2030. The current downtrend is expected to last another two to three years. We expect the market to rebound from 2025 onwards. The scarcity of skilled technicians, laborers and drivers will fuel the growth of automated machines. We expect nearly 75% of construction machines to have embedded connectivity by 2030 as the industry shifts towards electrification and autonomous operations. Further, we expect the connected construction machinery market to see an annual growth rate of 11% over the next eight years. Currently, 4G is the leading technology in the connected construction machine market but we expect 5G to be the most preferred technology by the end of the forecast period.”
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Counterpoint Technology Market Research is a global research firm specializing in products in the technology, media and telecom (TMT) industry. It services major technology and financial firms with a mix of monthly reports, customized projects and detailed analyses of the mobile and technology markets. Its key analysts are seasoned experts in the high-tech industry.
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