Surge in Road Building and Earthmoving Equipment Demand to Influence Growth of the Construction Equipment Aftermarket Market
Rising adoption of road building and heavy earthmoving equipment have triggered significant growth opportunities for construction equipment aftermarket. Increasing construction and infrastructure activities such as digging of trenches and foundations and forestry work are fuelling the use of construction equipment such as loaders and excavators. However, high consistent use of such equipment results in greater wear and tear of vital parts, whose prolonged use can impact the functional workability of these machines or permanently damage the equipment, which calls for efficient and cost effective equipment parts. That said, key players such as Liebherr Group, Terex Corporation and JCB are focusing on upgrading their construction equipment parts network to cater to the growing demand. In December 2020, a new construction equipment parts centre was established by JCB in India. This 150,000 sq. Ft. centre will develop and distribute earthmoving equipment spare parts to fulfil around 40% of the demand for JCB equipment in India. Likewise, growing demand for various hydraulic systems is pushing manufacturers to enhance their production capacities, in turn influencing growth of the construction equipment aftermarket.
Growth in Residential Sector to Bolster Construction Equipment Aftermarket Growth
Growth of the construction equipment aftermarket is expected to remain influenced by growing construction activities in the residential sector. Residential housing projects have been on the rise worldwide, leading to higher demand for construction equipment in turn fuelling sales of spare parts of these machines. For instance, in 2020, according to US Census Bureau and Department of Housing and Urban Development, housing completions reflected an increase of 4.3% in June, as compared to May 2020. On the other hand, commercial sector is also contributing towards growth of construction equipment aftermarket. Establishment of commercial facilities is increasing, in turn fuelling use of construction equipment. For example, in 2020, Anderson Healthcare declared its plan to build a 50,000 ft 2 storey building in Goshen Campus, Edwardsville. Such expansions are expected to bolster growth of the construction equipment aftermarket.
Online Channels to Offer Optimistic Growth Opportunities for Construction Equipment Aftermarket
Sales of construction equipment spare parts through online channels are expected to increase in the coming years. This can be attributed towards convenience and timely delivery of spare parts needed to integrate in construction equipment. Moreover, the COVID 19 pandemic resulted in strict lockdown, resulting in shutdown of various offline construction equipment spare part stores worldwide. Against this backdrop, various OEMs such as HIAB AB and Liebherr Group are leveraging online platforms to carry out interactions with suppliers, dealers and customers regarding construction equipment part replacement or maintenance activities. This has translated into rising sales of construction equipment through various online portals such as Kickparts, Heavy Equipment Spare Parts, Chicago Pneumatic, Blumaq and Exkavator.ru that offer a huge range of construction equipment spare parts, in turn contributing to the growth of the construction equipment aftermarket. In addition, by online channels, companies can also enhance their outreach funnel and presence, consequently improving brand identity.
Construction Equipment Aftermarket to Witness Lucrative Opportunity in Asia Pacific
Emerging economies in the Asia Pacific region are expected to showcase high growth potential for construction equipment aftermarket. Increasing construction activities coupled with favourable government initiatives focused towards enhanced transport connectivity and rising commercial and residential constructions are fuelling growth of the construction equipment aftermarket in this region. For instance, according to analysis by KB Kookmink Bank, the residential housing index in South Korea increased to 104.1 units in August 2020, a 0.8 unit increase from the previous month. Moreover, emerging economies such as India and China have enhanced supply chain for construction equipment, which is likely to provide an impetus to the construction equipment aftermarket in the region. Investments by government authorities in country’s construction space are expected to contribute towards growth of the construction equipment aftermarket. For instance, the Indian Government announced an investment of US$ 1.4 trillion to develop infrastructure through NIP (National Infrastructure Pipeline) in 2020. This program focused on improving urban infrastructure and of highways, railways and airports. These factors are expected to drive the growth of the construction equipment aftermarket in India and manufacturers can expect an optimistic turnover in the coming years.
Construction Equipment Aftermarket Competitive Landscape
Players in the construction equipment aftermarket are stressing on enhancing sales of their equipment and other spare part services on a regional and international level by opting expansion strategies such as M&A. In 2021, Gibson Machinery was acquired by Alta Equipment Group. The acquisition was mainly to expand Alta’s footprint in US and offer construction equipment spare parts and replacement services in Ohio. Manufacturers of construction equipment are also providing care plans for components for new machinery in a bid to strengthen corporate liaison with clients. For example, in April 2021, Marshall Group gave an order of 108 loader cranes to HIAB AB. HIAB AB will also offer its ProCare service for maintenance and replacement of spare parts without extra charge for a duration of 8 years.
The Global Construction Equipment Aftermarket is Segmented as Below:
By Product Type
By End User
By Sales Channel
Key Elements Included In The Study: Global Construction Equipment Aftermarket
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