The market for construction machinery showed good results in Q1 2020, following ruble devaluation and the construction of hospitals. However, it began to decline in April, and the Association of European Business (AEB) expects an 18% decline for 2020 instead of the small growth forecasted earlier.
The most significant sales decline is expected for excavators, loaders and dump trucks. Only crawler tractors can avoid decrease, however, it’s still 32.6% worse than pre-crisis expectation.
Experts note that the largest decline is likely to be in more expensive applications, or where existing fleets have larger reserves. In cases where there are no support measures, the decline could be as much as 50% or more.
However, one positive signal is that there are no plans to reduce road construction projects.
Hitachi notes that demand for mining machines fell by 40-50% because of coal low prices, so the company is focusing on construction applications. Many machines were used in construction of COVID hospitals.
The Ministry of Industry and Trade (Minpromtorg) also expects a decline. It hopes to soften the decline with subsidized leasing. Local OEMs are even more pessimistic – Rosspetsmash sees a possible 30-40% decline and suggests adding road construction industry to the list of segments affected by COVID-19.
Agriculture machine makers feel more confident. They expect a flat market, and some see even small growth in their segment. Read The Article
PSR Analysis: As expected, negative trends have touched off-highway machinery. However, the impact seems to be smaller than forecasted, and no catastrophic scenario for the industry (or even for some OEMs separately) is expected. PSR
Maxim Sakov Is Market Consultant, Russia, for Power Systems Research
