Construction Machinery Manufacturing

Brief Excerpt from Industry Overview Chapter:

Companies in this industry manufacture construction machinery, surface mining machinery, and logging equipment. Major companies include Atlas Copco (Sweden), Caterpillar (US), Doosan Infracore (South Korea), Hitachi (Japan), Komatsu (Japan), Liebherr Group (Germany), Sany Heavy Industry (China), and Terex (US), along with the construction divisions of heavy equipment manufacturers CNH (The Netherlands), Deere (US), and Volvo (Sweden).

The global construction machinery manufacturing industry generates about $200 billion in annual revenue. Top countries for construction equipment manufacturing include China, Germany, Japan, Sweden, and the US.

The US construction machinery manufacturing industry consists of about 700 companies that have combined annual revenue of about $40 billion and is expected to experience a high rate of growth over the next two years. Key growth drivers include the aging US highway and bridge infrastructure and rising demand in emerging markets.

COMPETITIVE LANDSCAPE

Demand is highly dependent on the cyclical construction industry. The profitability of individual companies depends on efficient manufacturing operations, since customers are very sensitive to price. Because of the large capital investment required to produce heavy construction machinery, this segment of the market is served mainly by the large manufacturers. Smaller companies can compete effectively by producing equipment that has specialized applications, or that is relatively simple to make. The US construction machinery manufacturing industry is highly concentrated: the top 50 companies generate nearly 90 percent of industry revenue.

US manufacturers compete with their counterparts around the world. Imports, largely from Japan, Mexico,...