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Global Connected Construction Machine Shipments Grew 6.7% YoY in 2022

  • 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.”

Construction machine market Counterpoint

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.”

The comprehensive and in-depth ‘Global Connected Construction Machine Market 2022’ report is now available for purchase at report.counterpointresearch.com.

Feel free to reach us at press@counterpointresearch.com for questions regarding our latest research and insights.

Background

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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Mohit Agrawal

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Related Reports

COVID Dents TCU Shipments but Recovery Looks Promising

  • Continental, LG, and Harman together account for a majority of global TCU shipments.
  • One in four TCUs shipped in 2025 will be 5G-enabled. Automakers will focus on future-proofing their cars, accelerating the adoption of 5G TCUs.

 San Diego, Buenos Aires, London, New Delhi, Hong Kong, Beijing, Seoul – January 28, 2021

The Telematics Control Unit (TCU) market is expected to grow at a compound annual growth rate (CAGR) of 14.4% during 2020-2025, with the market value surpassing $6.3 billion by 2025, according to the latest research from Counterpoint’s Smart Automotive service. The TCU data here refers to both passenger and commercial vehicles. Higher penetration of connected cars employing 4G-enabled TCUs will be visible till 2025. But with countries deploying 5G infrastructure rapidly, automakers will gradually shift to 5G-enabled TCUs having fallback compatibility to cover a wide range of connected car services with seamless network coverage.

In 2020, COVID-19 drastically impacted the already declining automotive sales in several ways:

  • Automotive factories operated irregularly for many weeks and also saw employee layoffs in H1 2020. This affected the final vehicle assembly.
  • Subdued consumer sentiments toward expenditure on non-essential items resulted in a decrease in new vehicle registrations. However, with vehicle purchase incentives in place, short-term recovery can be expected.

The implementation of E-call regulation in the EU initially led to a boom in TCU shipments while similar initiatives have been taken in other regions too, such as EVAK/ERA GLONASS (January 2017) in Kazakhstan and Russia, and K-ecall (2021 onwards). Other important factors driving TCU adoption include changing consumer preferences towards safety/entertainment features and the recent increase in interest in electrical vehicles (EVs), which employ upgraded TCUs for battery management and vehicle performance. For instance, GM has increased its budget for electric and automated vehicles from $20 billion to $27 billion and plans to launch 30 new EVs globally in the next five years (over 20 of them are planned for North America alone). The telematics industry is poised for growth in the coming years as automakers promote connected services to attract buyers and earn additional revenue through subscriptions.

Commenting on the TCU market, Senior Analyst Aman Madhok said, “Continental, LG, and Harman accounted for more than 50% shipments in 2020. Continental has been supplying to a variety of automakers, both luxury and non-luxury, besides having a presence in major markets worldwide. During the last few years, Continental has overtaken LG in terms of market share due to new contracts and the increasing penetration of TCUs in mass-produced vehicles. Harman bagged a contract from BMW to supply its latest 5G-enabled TCUs in 2021. Furthermore, it managed to associate with the likes of VW and Maruti Suzuki in recent years.”

Counterpoint Research Global TCU Shipments- by Supplier (in %, 2020E)

Madhok added, “On the other hand, LG’s market share is declining due to its heavy dependence on GM, which has reached a saturation point in terms of TCU penetration.”

The Smart Automotive report also differentiates the embedded TCUs based on cellular connectivity. Looking from the connectivity perspective, Research Vice-President Peter Richardson said, “5G penetration is on the rise and TCU suppliers have already started to sign contracts with their respective customers (automakers) to supply 5G-enabled TCUs. Continental will lead here too. It has already won contracts to supply 5G TCUs to two European car manufactures. Continental will be followed by LG and Harman. GM’s recent bullish sentiment towards complete electrification of its vehicles and aggressive plans for employing 5G technology will benefit LG to expand its 5G portfolio. Falling prices of 5G TCUs will enable their adoption in mid-price cars, with automakers like GM, Ford, and VW leading 5G connectivity by 2025.”

The comprehensive and in-depth ‘Global Telematics Control Unit Market Tracker, 2021’ from our Smart Automotive service is available for purchase at report.counterpointresearch.com. Feel free to contact us at press(at)counterpointresearch.com for questions regarding our latest research and insights.

Background

Counterpoint Technology Market Research is a global research firm specializing in products in the TMT (technology, media, and telecom) 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 experts in the high-tech industry with an average tenure of 13 years.

Analyst Contacts:

Peter Richardson

Aman Madhok

Fahad Siddiqui

Counterpoint Research

 

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