Global Off-Road Equipment Market & Technology Outlook 2023

Global Off-Road Equipment Market & Technology Outlook 2023

Global demand for off-road equipment is forecast to climb 6.0% per year to $728 billion in 2027. Gains will be driven by expansion in the Asia/Pacific region as industrializing countries increase mechanization rates and China experiences a near-term recovery following a pandemic-related decline in 2022. In addition, growth will be supported by:

development of new equipment featuring advanced technologies aimed at increasing production and efficiency, lowering emissions, and improving data connectivity capabilities

• rising demand for autonomous and electric equipment amid intensification of global workforce issues (e.g., rising labor costs, skilled worker shortages) and the adoption of new regulations (e.g., emissions standards)

Rising Demand for Advanced Smart Technologies Driving Value Gains

Advanced software, digital connectivity, and data analytics features in smart machinery are desirable to operators in all sectors looking to improve performance and will support demand for off-road equipment going forward. Operators are increasingly adopting smart technologies as they allow for better coordination, precision, and control of machines, and include systems that collect and analyze data to improve productivity, reduce downtime, and perform preventive maintenance. Demand for autonomous and semi-autonomous technologies is also expected to expand due to rising labor costs, increasing regulations, and a shortage in experienced, skilled operators.

All-Electric Equipment Important Focus for R&D Investment

Electric machinery has become a particular area of focus for many key suppliers. For instance, Volvo, one of the industry’s largest producers, has established a goal of at least 35% of its vehicles sold globally being electric by 2030. Electric equipment offers a variety of advantages over gas-powered models, including:

• reduced emissions, making it an ideal choice to comply with increasingly strict environmental regulations in developed countries and as a means of reducing ventilation costs and improving worker health in mining
• fewer defects and repairs as this equipment features a lower number of moving parts, which contributes to lower noise pollution and makes it more suitable for urban areas

The Asia/Pacific Region Will Account for Over Half of Global Demand GrowthHigh levels of growth are expected for developing countries in the Asia/Pacific region – most notably India, Indonesia, Malaysia, and Thailand – as mechanization rates climb due to increasing government support and foreign investment, and better financing options.

In the short term, regional gains will also be supported by a rebound in the massive Chinese market, which experienced an 8% contraction in 2022. The country’s “Zero-COVID” policy caused economic disruption with temporary lockdowns and a severe contraction in construction activity. With the end of this policy in late 2022, product sales are expected to expand at a fast pace in 2023, and growth will continue through 2027 as construction and mining activity accelerate, mechanization levels improve in the agriculture sector, and China continues to invest in expanding public infrastructure.

Study Description

This Freedonia industry study analyzes the $543 billion Global Off-Road Equipment industry. It presents historical demand data (2012, 2017 and 2022) and forecasts (2027 and 2032) by region (North America, Central and South America, Western Europe, Eastern Europe, Asia/Pacific, and Africa/Mideast), as well as historical demand data (2012, 2017 and 2022) and 2027 forecasts by market (Construction, Agriculture, Mining, and Forestry). The study also evaluates company sales and R&D spending on selected companies including AGCO, Caterpillar, CNH Industrial, Deere, Hitachi, Komatsu, Kubota, Liebherr International, Sandvik, Volvo, and Zoomlion.