"Catapult Your Business to Fore, Gain Competitive Advantage "
The global undercarriage systems market size was USD 21.80 billion in 2019 and is projected to grow USD 29.26 billion in 2032 at a CAGR of 2.3% in the 2020-2032 period. The global impact of COVID-19 has been unprecedented and staggering, with undercarriage systems witnessing a negative demand shock across all key regions amid the pandemic. Based on our analysis, the global market will exhibit a lower growth of -0.7% in 2020 as compared to the average year-on-year growth during 2016-2019. The rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over. The undercarriage systems market in the U.S. is projected to grow significantly, reaching an estimated value of USD 5.01 Bn by 2032, driven by the evolution of different technologies embedded in the undercarriage systems.
The demand for undercarriage systems is influenced by the increasing production of heavy equipment across the construction, mining, and other industries. Furthermore, government and private sectors across the globe are making large investments in the construction of new residential & commercial buildings and public infrastructure, thereby supporting the growth of the construction industry. This would ultimately encourage the need for heavy equipment and the requirement of undercarriage components.
COVID-19 Pandemic: Unavailability of Finished Steel Products is Hampering Growth
The market is experiencing an exponential downfall in the year 2020, owing to the temporary lockdown of manufacturing industries across Europe, Asia, and North America. According to the Investment Information and Credit Rating Agency of India Limited, in 2020, construction equipment sales are expected to fall by 19% from the previous year, whereas the production of construction equipment is experiencing a downfall by 4%. The Committee for European Construction Equipment (CECE) announced that the pandemic has broadly impacted about 60% of the European construction equipment industry.
Furthermore, the major impact is being observed on the original equipment manufacturers (OEMs). The manufacturing of undercarriage components has shrunk because of the unavailability of finished steel products required to assemble the complete system. The World Steel Association (WSA) stated that in 2020, the demand for crude steel production in nearly 64 countries is experiencing a decrease of 6% compared to March 2019.
As a result, the lockdown has also caused a severe downfall in the sales volume of undercarriage components, such as idlers, rollers, track shoes, and undercarriage systems amongst the prominent players. This severe downfall is supported by the changes in dealer inventories and lower end-user demand. Moreover, the non-working condition of this type of system is adding the extra cost of maintenance. This, in turn, will lead to the dried up sales channel of these systems in the coming years.
Request a Free sample to learn more about this report.
Growing Adoption of Excavators across Various Applications is a Prominent Trend
The market for earthmoving equipment is gaining traction for decades and is expected to remain the same in the forecast period with the development of construction machinery market. Amongst the earthmoving equipment, the excavator is a preliminarily business segment showing exponential growth owing to its demand in the mining, quarrying, and demolition applications. Moreover, numerous equipment manufacturers are focusing on introducing new product lines to expand their existing business segments and strengthen their presence across developed and developing economies. For instance, in December 2019, SANY GROUP unveiled a wide range of excavators to widen its product portfolio. This is further anticipated to create a potential impact on undercarriage systems sales.
Evolution of Different Technologies Embedded in Undercarriage Systems to Aid Growth
The ongoing technological advancement in heavy equipment is enabling the masses to achieve complex job work efficiently at sites. Also, the introduction of real-time-enabled Internet of Things (IoT) is benefitting users and companies to track the conditions of their equipment at all times. At the same time, major manufacturers, including Caterpillar, Titan International, Inc., and Komatsu are rigorously emphasizing upgrading their existing technologies and pouring heavy investments in conducting research and development activities to sustain in the competitive market. This is further set to contribute to the heavy equipment sales, thereby creating driving force of undercarriage systems revenue market growth for the global region.
Furthermore, key vendors are now focusing on upgrading the components of the undercarriage system, which includes drive motors, sprockets, idlers, tracks, and track chains to reduce frictions, longer oil retention, improve lubrication, and resist abrasion. Owing to the above-mentioned factors, the market is anticipated to flourish significantly with advancements in technologies and development in undercarriage parts.
Volatility in Raw Material Prices and High Upfront Investments May Hinder Growth
The demand for heavy machinery is growing with the emergence of an innovative, efficient, and easy-to-use equipment range. However, fluctuation in the availability of raw materials is a major factor set to limit market growth. The preliminary material required to manufacture undercarriage systems and components requires steel, aluminum, rubber, and others.
According to our primary research, these system accounts for ~15-20% of the total purchase price of the equipment. Volatility in raw materials, therefore, affects the cost of production of equipment and further compels manufacturers to reduce profit margins, thereby hindering growth.
Steel Track Segment to Hold Dominant Share Owing to its Possession of High Tensile Properties
The market is segmented on the basis of type, namely, rubber track and steel track. Amongst them, the steel track segment generated a major revenue and market share by type in 2019. This is owing to its high tensile properties and ability to outperform in an extreme environment, increased infrastructural development, rising consumption of finished steel products, and many others. Additionally, steel undercarriages are highly durable, corrosive resistant, and are easily recycled.
The rubber tracks segment is expected to grow at a slower rate during the forecast period. These tracks are best suited for concrete and asphalt surfaces. Moreover, the properties of such tracks are ideal for agriculture and other applications.
To know how our report can help streamline your business, Speak to Analyst
Construction Segment to Exhibit Highest CAGR Backed by Surging Infrastructural Development
Based on applications, the market is categorized into agriculture, construction, forestry, mining, and others. The construction segment holds a major share and is anticipated to grow at a higher rate owing to the rising government initiatives for infrastructure development, the emergence of smart constructions, investments in green infrastructural developments, and others.
For instance, in April 2019, the Association of Southeast Nations (ASEAN) collaborated with Asia Development Bank (ADB) launched the ‘ASEAN Catalytic Green Finance Facility’ to invest approximately USD 1.00 billion in the green infrastructure development in every possible facility across Southeast Asia.
Followed by construction, the mining segment also holds a significant share owing to the rising mining activities, increasing demand for metals and ores across various geographies, and surging consumption of metals in various industries, including automotive, general manufacturing, aerospace and defense, and others.
The forestry and agriculture segment is anticipated to grow at a considerable rate with the increasing consumption of consumer goods, the evolution of smart farming technologies, rising awareness for land fertility balancing, and rapid urbanization.
Asia Pacific Undercarriage Systems Market Size, 2019 (USD Billion)
To get more information on the regional analysis of this market, Request a Free sample
Based on the region, the market is further divided into North America, Europe, Asia Pacific, the Middle East and Africa, and Latin America.
Asia Pacific is expected to grow at the highest growth rate compared to other regions, mainly due to the increasing urbanization across the Asian countries. Also, they are creating a huge demand for residential infrastructure, thereby attributing to the construction equipment market growth.
China is anticipated to hold a major share among the countries in this region. This would occur because of the rising focus of the Chinese government on investing in the infrastructure sector. It is set to impact the construction equipment sales, further contributing to the market growth. For instance, the Government of China has invested more than USD 4 trillion in the “One Belt, One Road” infrastructure megaproject. It focuses on the cooperation and connectivity between China and its Eurasian neighbors. Moreover, the emergence of various small and medium construction equipment manufacturers across this country is likely to propel the market share of the overall region in the near future.
Moreover, Europe is expected to show substantial undercarriage systems market growth. This is owing to the increasing domestic and international demand for mining products, a boost in export for agri-food products, a rise in equipment rental businesses, and others.
North America is anticipated to show considerable growth in the market owing to the presence of major manufacturers such as Caterpillar, Komatsu, and Hitachi, operating in this region. Also, the implicit efforts of these companies regarding strategic partnerships, technological developments, focus on the aftermarket services, and acquisitions are also projected to influence the market growth in this region.
To know how our report can help streamline your business, Speak to Analyst
The Middle East and Africa is projected to grow at a considerable rate. This is owing to the major expansion of large-scale projects related to infrastructure across the GCC countries. Saudi Vision 2030 program, for instance, is becoming the key growth factor for gearing up the development across the GCC, thereby enabling the higher rates of foreign direct investments (FDI) in the construction industry.
Following the Middle East, Latin America is anticipated to exhibit moderate growth owing to the rising government initiatives for renovation and new building projects, favorable governmental norms and standards, increasing mining activities, and considerable growth in agriculture businesses.
Key Players Focus on Upgrading their Operations and After-sales Strategies
Key manufacturers are regularly implementing comprehensive programs to refurbish and modernize the technology of manufacturing equipment to produce defect-free undercarriage components. Prominent players are investing in streamlining their processes to quickly transfer the undercarriage systems in bulk transporting or emergency. For instance, Titan International, Inc. is heavily investing in streamline processes to increase its productivity, enhance supply chain management, and lower selling & administrative expenses.
Furthermore, companies are offering value-added after-sales services to expand the geographical presence of these systems. These services refer to free of cost maintenance, technological improvement, additional strategic add-ons, and others. Leading manufacturers have introduced internal sales forces that are primarily organized to provide after-sales services through a network of independent and OEM-affiliated dealers. After-sales services refer to after-purchase digital offerings to customers that result in improved operating profits.
An Infographic Representation of Undercarriage Systems Market
To get information on various segments, share your queries with us
The market research report mainly focuses on the detailed analysis of the industry and focuses on key aspects such as leading companies, type, and major product applications. Besides, it offers insights into the market trends and highlights drivers and restraints. In addition to the aforementioned factors, the report encompasses several factors that have contributed to the market's growth over recent years.
ATTRIBUTE | DETAILS |
Study Period | 2016-2027 |
Base Year | 2019 |
Forecast Period | 2020-2027 |
Historical Period | 2016-2018 |
Unit | Value (USD billion) |
Segmentation | Type, Application, Geography |
By Type |
|
By Application |
|
By Geography |
|
Fortune Business Insights says that the global market stood at USD 21.80 billion in 2019.
In 2027, the market is expected to be worth USD 24.76 billion.
The market will exhibit a CAGR of 1.9% over the forecast period (2020-2027).
Asia Pacific is anticipated to be the dominant region and stood at USD 8.60 billion in 2019.
Within the application criterion, the construction segment is expected to lead the market during the forecast period.
The evolution of different technologies embedded in undercarriage systems is the key driver of the market.
Marubeni-Komatsu Ltd. (Marubeni Corporation), Caterpillar, and Berco S.p.A. (thyssenkrupp AG) are the key market players.
The commercial application segment is expected to hold the highest share in the market.
In terms of application, the construction segment is expected to grow significantly over the forecast period in China.
The growing adoption of excavators across various applications is a key trend of the market.
US +1 833 909 2966 ( Toll Free )