Germany Compact Construction Equipment Market - Strategic Assessment & Forecast 2023-2029

Germany Compact Construction Equipment Market - Strategic Assessment & Forecast 2023-2029

The Germany compact construction equipment market is expected to grow at a CAGR of 4.60% from 2022-2028.

Increased Investment in Public Infrastructure Projects

• The German government invested in house renovation projects across the country in 2022. The government also plans to build 400,000 new apartments yearly, with 100,000 being publicly subsidized. Hence, the rise in construction projects is expected to drive the demand for compact construction equipment during the forecast period.
• As the country becomes carbon neutral by 2045, the government is liquidating subsidies for renovation to make buildings more energy efficient. In 2021, the government offered renovation subsidies of approximately USD 9 billion and further increased the amount in 2022.
• In 2022, the government planned to restart operations in coal-fired power plants, generating 10 gigawatts (GW). These plants have been out of operation for the last two years. They cover nearly 5% of the total German power production capacity. Verbundwerk Hattorf Wintershall Mine in Hessen, Unterbreizbach Mine, Zielitz Mine, Neuhof Ellers Mine and Bernburg Salt Mine are one of the largest underground mines in Germany.

KEY HIGHLIGHTS

• Compact excavators accounted for the largest share of the Germany compact construction equipment market in 2022. Application of compact construction equipment in the material handling segment accounted for the largest share in 2022. Rising investment in housing, warehouse expansion, and public infrastructure projects is expected to drive the demand for excavators in the German compact construction equipment market.
• The country has planned to spend USD 220 billion by 2026 to assist the industrial transformation, including climate protection, hydrogen technology, and electric vehicle charging station expansion. The construction equipment and building experienced a 22% growth in 2021 compared to the previous year due to the infrastructure push with highways, dams, and green cities.
• The German contractor, Hochtief, won a public-private partnership (PPP) deal to renovate and build new offices for the Institute for Federal Real Estate in Berlin. Construction is scheduled to commence in October 2023. The project involves refurbishing four existing properties, which will be linked with new buildings and extensions. These improvement projects across the region expect to propel the demand for compact telehandlers in the Germany compact construction equipment market.

Segmentation by Type

• Excavators
• Backhoe Loaders
• Wheel Loaders
• Track Loaders
• Skid Steer Loaders
• Telehandlers
• Forklifts
• Aerial Platforms
• Others (Articulated Loaders, Truck Carriers)

Segmentation by Application

• Material Handling
• Maintenance & Utility Works
• Waste Management
• Others

Segmentation by End Users

• Construction
• Mining
• Warehouse & Logistics
• Other (Power Generation, Utilities Municipal Corporations, Oil & Gas, Cargo Handling, Power Generation Plants)

MARKET TRENDS & DRIVERS

Surge in Renovation & Repair Projects for Public Infrastructure Supports Demand for Compact Construction Equipment

• In 2022, the German government planned for the rehabilitation & repair of roads across the country. The government aims to launch over 200 construction projects across the country. Major federal and state road network projects for rehabilitation are underway in Baden Wurttemberg. The government allocated USD 429.2 million for road network maintenance in Baden Wurttemberg State in 2022. Current rehabilitation programs focus on existing roads, bridges, and cycle paths.
• In addition, USD 265.4 million was allocated to renovate federal highways. The 2022 rehabilitation program includes 50 bridge maintenance projects, 250 km of highways, and 190 km of state roadways repairs and maintenance. Several road repair works were planned for various states, such as Saarland, Hesse, and Rhineland-Palatinate, in 2022. The government allocated USD 408.3 million budget for repair projects across the country.

Increasing Demand for Compact Construction Equipment in Response to Focus On Sustainability and Smart Cities Development

• “Green building,” being one of the key investment strategies of the German government, is expected to boost the demand for compact-powered construction equipment in the Germany compact construction equipment market. Germany has invested approximately USD 12.5 billion in developing green buildings in compliance with ESG norms.
• The growing demand for compact excavators is attributable to the improvements in the underground mining and construction sectors and a few government projects like the smart city project. The market for compact excavators is evolving into a more innovative sector due to the intelligent systems driven by IoT and data analysis for service, networking, and sustainability.

A Surge in Investments in Residential Construction Across the Country to Boost the German Compact Construction Equipment Market

• The government actively promotes energy-efficient homes since approximately 16% of Germany's greenhouse gas emissions come from the building sector. The move to green housing could be accelerated by recent initiatives to lessen reliance on Russian gas and oil.
• The global construction output fell by 4% in 2022. However, according to VDMA, construction growth was not much affected in Germany, the U.K., and France in 2022 due to the energy crisis, inflation, and supply chain disruptions.

Adoption of Building Information Modeling (BIM) To Enhance Remote Monitoring & Digitization

• The Federal Ministry of Transport and Digital Infrastructure (BMVI) will aid medium and small-sized companies in integrating BIM to increase the productivity of construction processes and improve the quality of buildings constructed.
• Some of the compact construction equipment firms have integrated the technology of BIM into their system. The upcoming new compact excavators can now input 3D models into a computer. In addition, it gives information about fuel consumption and productivity. Companies like Caterpillar, Volvo, and JCB are at the forefront of integrating BIM.

Investment in Green Infrastructure Strategy to Boost the Germany Compact Construction Equipment Market

• Germany has targeted to invest USD 220 billion by 2026 to support the industrial transformation, including climate protection, hydrogen technology, and expansion of electric vehicle charging stations.
• The Green Infrastructure Strategy was developed by the European Commission in 2020, which aimed to develop organic systems, both natural and engineered, that act as living infrastructure in rural and urban set up to promote social, economic, and ecological growth, focusing on sustainable growth.

Rise in the Adoption of Compact Construction Equipment in Response to New Technology Attachments

• Construction companies nowadays are more attracted to purchasing compact construction equipment as they can operate in varied areas equipped with different technological attachments. Moreover, the traditional pedal operation in compact equipment is being taken over by using joysticks to operate the equipment.
• The growth of the Germany compact construction equipment market will be supported by Germany’s plan to lay out a state fund worth USD 546 million to USD 1.1 billion to support the mining of raw materials in response to the country’s transition to the green economy.
• Construction manufacturing companies such as CNH Industrial, Terex, and others focus on delivering compact construction equipment. Recently, in 2023, CNH launched its first E15X electric power mini excavator.

INDUSTRY RESTRAINTS

Increasing Construction Costs May Harm the Sales of Compact Construction Equipment

According to the recent Feb 2023 data, cement prices reached their peak with growth of 51.7%. Gas supply issues in 2022 forced steel producers to increase their product prices. Other building materials such as concrete, cricks, and iron are also increasing significantly.

Skilled Labour Shortage in the Country Hampers the Pace of Construction Projects

Germany is also facing a shortage of 40 thousand truck drivers due to the high costs of training and obtaining relevant licenses and many other formalities to surpass the eligibility criteria. This is adding to the issue of the existing labor shortage in the country. Additionally, Germany's aging population has recorded a shortage of young people. According to the Federal Statistics Office, in July 2022, only 10% of the population was aged between 15 and 24, compared to 20% over 65. As a result, the country depends on foreign laborers whose supply is impacted post-pandemic.

VENDOR LANDSCAPE

• Caterpillar, Volvo CE, Komatsu, Liebherr, Hitachi Construction Equipment, and JCB are front runners in the Germany compact construction equipment market. These companies have a strong market share and offer diverse sets of compact equipment.
• Caterpillar, Komatsu, Volvo CE, and JCB account for the highest revenue in the German compact construction equipment market.

Prominent Vendors

• Caterpillar
• Hitachi Construction Machinery
• Komatsu
• Liebherr
• Volvo Construction Equipment
• Xuzhou Construction Machinery Group Co. Ltd. (XCMG)
• JCB
• SANY

Other Prominent Vendors

• Zoomlion Heavy Industry Science & Technology Co. Ltd
• Hyundai Construction Equipment
• Kobelco
• LiuGong
• CNH Industrial
• Terex Corporation
• Manitou
• Hyundai Doosan Infracore
• Takeuchi
• Yanmar

Distributor Profiles

• Thomas Baumaschinen
• KUHN- BAUMASCHINEN.DE
• Schlüter Baumaschinen GmbH
• Swecon
• Tecklenborg
• GS Arbeitsbühnen GmbH

KEY QUESTIONS ANSWERED:

1. How big is the Germany compact construction equipment market?

2. What is the growth rate of the Germany compact construction equipment market?

3. Who are the key players in the Germany compact construction equipment market?

4. What are the trends in the Germany compact construction equipment market?

5. Which are the major distributor companies in the German compact construction equipment market?