Outlook for construction equipment manufacturers is optimistic – but industry success factors have changed
European manufacturers of construction equipment expect annual growth of 5 to 6 % through 2020, and 2 percentage points in additional profit. According to a survey by McKinsey & Company, 69 % of companies are optimistic about the future, with just one out of ten predicting that their business situation will worsen. Specifically, manufacturers point to two primary opportunities: growth from markets outside Europe and the increasing importance of the aftermarket business (parts, service, and solutions). About six out of ten companies say that these two developments will be the most important trends for the industry. These are the two key findings of McKinsey’s “Reengineering construction equipment” study.
The study builds on interviews with more than 30 industry experts as well as a unique survey of senior executives at more than 75 OEMs. The survey was conducted in conjunction with CECE, the European construction equipment manufacturers’ association. The report was presented at the bauma 2016 in Munich/Germany on 13.04.2016.
Today, the construction equipment industry in Europe is made up of around 450 machinery and attachment manufacturers, who directly employ about 150 000 people and generate annual sales of approximately € 40 billion. Italy, Germany, and France are the main hubs, where more than half of the manufacturers are located. The industry consists primarily of small and medium-sized enterprises (SMEs): two-thirds of all companies generate annual sales of less than € 50 million, and just 10 % reach the € 1 billion mark. At the same time, OEMs in Europe are highly international, with more than 40 % of their sales taking place outside the region, mainly North America, the Middle East, and Asia.
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