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On Monday, Nov. 30, 2020, at 9:00 am CST, representatives of two leading international firms will present a free one-hour webinar discussing the construction outlook in Europe and North and South America.
During the session, Power Systems Research and JCB Power Systems will present the latest information on the impact of COVID-19 on construction equipment production. JCB will provide details on emissions in developing engine technologies that are coming to market across the globe.
The global lawn and Garden Equipment Market, which includes commercial and residential equipment, is projected by Power Systems Research to reach sales of $46.16 billion by 2030. This is a projected increase of $15.96 billion dollars from 2023 to 2030, an increase of 52.8%.
The global impact of COVID-19 is stating to wane and the market is returning to a normal growth rate. Individual homeowners are still interested in lawn and garden care, just not as much as during COVID-19. More people are returning to recreational activities.
The prices of used construction equipment continue to fall, and bidding prices at major auctions are 10% lower than in the same period last year. This is due to a decrease in demand from Southeast Asia due to the COVID-19.
Akihito Komuro
Demand in Japan is steady due to the torrential rains in Kyushu and other factors, but the price decline in overseas markets has lowered the overall market.
Demand in the Philippines and Thailand also declined. In Southeast Asia, demand for cranes and other infrastructure-related equipment has been high for the past few years, but there have been several construction delays and stoppages caused by COVID-19. The average unit price at the crane truck auction was about 6 million yen, a 20% drop from January to March before COVID-19.
Komatsu plans to release a battery-powered compact excavator that emits no exhaust gas in Europe in 2022. The company will also promote the quietness of the product and expects to use it in residential areas. Hitachi Construction Machinery will also double orders for electric excavators in fiscal 2021 compared to the previous year. Following the trend in the automobile industry, competition in the field of electric construction machinery is now in full swing.
The compact excavator to be launched by Komatsu will use lithium-ion batteries that are lightweight and can operate for a long time. It uses a motor instead of an engine, making less noise and emitting no exhaust gas. The company will first market the product in Europe, where environmental regulations are strict, and then consider launching it in Japan. Komatsu began renting several small excavators powered by lead-acid batteries on a trial basis in Japan in April 2020.
EDITOR’S NOTE. Power Systems Research tracks the global trends powersports recreational equipment, especially the electrification of these units. This is one of a series of reports on these trends.
Harley-Davidson’s LiveWire strategy includes these key take-aways:
Unique lineage: LiveWire draws on its DNA from the lineage of Harley-Davidson, capitalizing on a decade of experience in the EV sector.
Motorcycles + beyond: with an initial focus on the urban market.
Virtual HQ: LiveWire will be headquartered virtually, with initial hubs in Silicon Valley, CA (LiveWire Labs) and Milwaukee, WI.
Marketplace: LiveWire will work with participating dealers from the Harley-Davidson network as an independent brand. A go-to-market model will blend digital and physical retail formats.
Dedicated showroom: LiveWire will operate dedicated EV showrooms in select locations, starting in California.
Technology focus: LiveWire plans to develop the technology of the future and to invest in the capabilities needed to lead the transformation of motorcycling. LiveWire expects to benefit from Harley-Davidson’s engineering expertise, manufacturing footprint, supply chain infrastructure, and global logistics capabilities.
Technology sharing: Harley-Davidson and LiveWire intend to cooperate and share their technological advancements to ensure an industry leading application in their respective core segments.
POLARIS FIRST QUARTER 2021 EARNINGS RESULTS. Polaris released first quarter 2021 results with reported sales of $1,951 million, up 39% from reported sales of $1,405 million for the first quarter of 2020. The company reported first quarter 2021 net income of $134 million compared with a net loss of $5 million for the 2020 first quarter.
Gross profit increased 64% to $481 million for the first quarter of 2021 from $293 million in the first quarter of 2020. Reported gross profit margin was 24.6% of sales for the first quarter of 2021.
Polaris Product Segment Highlights:
Off-Road Vehicles (“ORV”) and Snowmobiles totaled $1,232 million for the first quarter of 2021, up 50% compared to $824 million for the first quarter of 2020. PG&A sales for ORV and Snowmobiles combined increased 51% in the first quarter of 2021 compared to the first quarter last year.
Motorcycles totaled $166 million, up 31% compared to the first quarter of 2020, driven primarily from increased sales of Slingshot, Indian Motorcycles.
Global Adjacent Markets segment sales, including PG&A, increased 27% to $125 million in the 2021 first quarter compared to $98 million in the 2020 first quarter driven by increases in demand in North America and EMEA.
Aftermarket segment sales of $230 million in the 2021 first quarter increased 14% compared to $202 million in the 2020 first quarter. Transamerican Auto Parts (TAP) sales of $193 million in the first quarter of 2021 increased nine percent compared to $177 million in the first quarter of 2020.
Boat segment sales increased 29% to $199 million in the 2021 first quarter compared to $155 million in the 2020 first quarter, driven by sales growth in all three brands, Bennington, Godfrey and Hurricane.
POWERSPORTS MARKET ANALYSIS. The powersports market observed a slowdown during the first two quarters of 2020 driven by the spread of the COVID-19. Shortages of labor and materials in the first quarter led to many industry challenges. Governments began lifting the lockdown restrictions to stabilize the economic activities in the third quarter of 2020. During this period, the powersports industry witnessed steady growth owing to the rising inclination of individuals toward participating in outdoor recreational activities while complying with social distancing norms.
Powersports market size exceeded $34 billion in 2020 and is expected to grow at around 6% CAGR between 2021 and 2027. The global power sports unit sales are anticipated to reach over 3 million units by 2027. PSR
Michael Aistrup is Senior Analyst covering Recreational Products for Power Systems Research
Kubota Corporation and Sumitomo Construction Machinery Co., Ltd. said they have begun discussions regarding the mutual supply of construction equipment.
Internationally, the growing demand for housing and the expected increase in construction work related to infrastructure investment and urban development, plus the increasing shortage of construction labor, are expected to create strong demand for construction equipment to improve efficiency and reduce labor requirements.
Kubota develops, manufactures, and sells small construction equipment used in urban construction, while Sumitomo Construction Machinery specializes in medium and large construction equipment used in a wide range of civil engineering and forestry work.
The construction equipment industry anticipates a robust 5-year outlook with a projected 15% year-on-year growth. This optimistic forecast is anchored in the momentum generated by ongoing construction projects and increased infrastructure spending. The government’s substantial allocation of $130.57 billion (Rs 10 lakh crore) underscores its commitment to fortifying this sector.
Moreover, the recognition of the scale and technological prospects within the construction landscape further emphasizes the strategic importance of advancements in this domain.
The construction equipment (CE) sector has undergone significant transformation over the past 2-3 years, marked by major players reaching peak manufacturing capacities and subsequently embarking on expansive growth initiatives.
Off-road equipment markets are expected to see a slight recovery from the devastating effects of COVID-19 in 2021, according to a report prepared by Power Systems Research that appeared in the October 2020 issue of OEM Off-Highway magazine.
One segment, the construction equipment market in North America has been riding a strong economy over the past few years. The segment was due for a slowdown; however, current worldwide economic conditions have caused a rapid cycle to reset in the construction industry. Government is committed to support the demand in the sector by investing heavily into infrastructure. We have yet to see any new level of demand, but we expect to see signs of the new normal in H2 2020 and early 2021. PSR
John Deere has just announced an investment of US$ 35 million (R$ 190 million) in the production facilities for its Construction Division, two manufacturing units located in Indaiatuba, in the interior of São Paulo. The goal is to expand capacity to meet the growing demand for machines and to implement its Smart Connected Factory program, or Industry 4.0, which encompasses technologies to increase efficiency, quality in processes and reduce operating costs.
PSR Analysis: John Deere is reaching production capacity with the huge growth of demand for Construction Equipment in Brazil in recent years. This demand should continue and should keep increasing with the planned Infrastructure Investments and the continued expansion of the Mining business. Moreover, the strategy of localization, making products in Brazil rather than importing, making Brazilian plants a hub for exports, needs continued investment. PSR
Fabio Ferraresi is Director Business, Development South America, for Power Systems Research
SUMMARY. The North American economy
remained stable in 2019 and pure economic conditions as well as fundamentals in
the region were favorable. Most industries performed very well, and the
short-term outlook remains stable to flat for most market segments. However, we
see many new developments that could suggest a shift in the trend.
Yosyf Sheremeta
Consumer
confidence declined slightly in December, following a moderate increase in November. The Conference Board’s Consumer Confidence
Index stood at 126.5 in December, 1.4 points higher than in September 2019.
Per Lynn Franco, Senior Director of
Economic Indicators at The Conference Board: “While consumers’ assessment of current conditions improved,
their expectations declined, driven primarily by a softening in their
short-term outlook regarding jobs and financial prospects. While the economy
hasn’t shown signs of further weakening, there is little to suggest that
growth, and in particular consumer spending, will gain momentum in early 2020.”
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