Introduction
The Construction equipment market is a service industry providing machinery, equipment and tools of all kinds and sizes (from earthmoving to powered access, from power generation to hand-held tools, etc.) for a limited period to final users, mainly to construction contractors but also to industry and individual consumers.
The market is highly fragmented, such that for every country, there are more than 150 mobile crane service providers, according to the directory of cranes by TDKv. Post-2020, the operating profit rental companies is anticipated to increase from 8-10% to 12-14%, owing to the rising non-residential construction activities and customers’ preference toward brand loyalty due to the extensive marketing activities conducted by major companies.
Crawler excavators are one of the most demanded heavy construction equipment (heavy-duty excavators), weighing 60,000 to 80,000 pounds, used across a wide range of applications, including industries (especially heavy infrastructural projects), underground utilities, road construction, pipeline, and commercial site preparation and demolition purposes. Per industry experts, scissor lifts are the most in demand from an equipment rental standpoint. Generators are growing in popularity, and heavy equipment still makes up a large portion of rental company revenue.
In terms of revenue, large booms and cranes make up most of the business. That’s because these are on rent for a longer duration and are bigger items.
Table of Contents
Market Overview
Key Trends
The construction industry is highly dynamic, and numerous factors, such as overall economy, budgets, and global economic scenario, are influencing the market’s growth. Volatility in these aspects affects the businesses of construction equipment OEMs, as well as construction rental equipment. This, in turn, is leading to price fluctuations of new, used, and rental equipment.
The ASEAN region holds significant opportunities for the growth in demand for construction machinery. With the prospects of large infrastructure projects and shifting labor dynamics, the construction equipment rental market is expected to witness growth post-2020 during the forecast period. With a sudden outbreak of COVID-19 pandemic across the world, many economic sectors, including the construction industry, have been under lockdown for a few weeks/months in the first quarter of 2020.
Key Market Players
The global construction equipment rental market is characterized by numerous domestic and regional players, resulting in a highly fragmented market environment.
The five key players, namely United Rentals Inc., Ashtead Group PLC, Herc Rentals, H&E Equipment Services, Loxaman, and Kanamoto Co. Ltd, in the market account for 18% of the market share, and the remaining 82% of the market share is held by other players (domestic or regional players).
The market is highly driven by mergers and acquisitions and joint venture activities.
Growth Drivers and Challenges
The efficient selection, transportation, and installation services offered by rental providers.
Wide range of equipment leasing plans based on the requirements of clients which enhance their flexibility.
New machines with advanced technologies, such as IoT and telematics, cater to the increasing market demand for advanced equipment.
Predicting the demand in advance and optimizing fleet utilization will pose significant challenges.
The requirement for high capital investments in modern equipment and fleet expansion is further expected to hamper the market growth.
Stringent emission regulations for construction machinery. An Environmental Protection Agency (EPA) report observed that for every liter of fuel combusted, nonroad (‘off-road’) diesel engines emit five times more PM 2.5 when compared to (the current) on-road diesel vehicles (fleet).