RECORD-BREAKER

Sales for the world’s biggest construction equipment manufacturers reach record levels

It seems that no matter what challenges the world throws at it – rising inflation, armed conflict in Europe, a lack of workers, supply chain issues – the world’s biggest construction equipment manufacturers continue to increase their sales. It helps, of course, that construction is an essential industry – one of the world’s most essential. No matter what happens, there is always a need for infrastructure, housing, roads; and for them to be repaired.

This year’s Yellow Table (which compiles the sales for the world’s top 50 OEMs for 2023) follows on from what is now a fairly consistent period of strong growth. Indeed, last year’s table saw sales of US$230.6 billion. This was just 0.4% down on the previous year’s total, which was the highest amount ever generated by the table.

Towards the top of the table

As sure as night follows day, Caterpillar is once again at the top of the Yellow Table. Sales for the company’s construction and resources division saw a healthy increase from $37.5 billion to $41 billion and further widen the gap from second placed Komatsu. Caterpillar now accounts for 16.8% of the Yellow Table’s total revenues, up from last year’s 16.3%.

Given the introduction to this article, it should be no surprise that sales are up, once again, to a new record-level: US$243.4 billion. One of the reasons for this is the performance of North America, which – helped by various government acts – enjoyed a record year. According to Off-Highway Research, in 2023 approximately 330,000 construction units were sold: an 8% increase from the year-prior and another sales record for the region. With other regions in the world, such as Europe and Japan holding steady and India growing, the overall picture was healthy and managed to offset the still challenging conditions in the Chinese market.

SHARE OF YELLOW TABLE REVENUES

Revenues generated in the Yellow Table from firms in Asia have fallen considerably in recent years: from over half of the total amount in the 2022 table (50.2%) to 44.8% last year and then 42.8% this year. This drop is due to China, which has experienced difficult market conditions. The revenue generated by its OEMs drops from 18.2% last year to 17.2%. North America sees an increase from 27.2% to 29.9%. This is not surprising, given how strong conditions are there. Caterpillar extended its lead at the top of the table and John Deere enters the top three. Europe saw an increase from last year’s 27.5% to 29%. Europe has one OEM in the top five in Liebherr and two others in the top ten: Volvo CE and JCB. Please note that these figures represent the revenues of the companies listed on the Yellow Table, and are not representative of the revenues generated within the regions themselves or individual countries as a whole.

There is a change in the top three with USbased John Deere rising from fourth place to third. Ever since the company purchased the Wirtgen Group it has steadily been climbing the table and, given the strong conditions in its home market, it is perhaps not a surprise to see it once again move up.

China-based XCMG are in fourth place with sales declining slightly when adjusted for currency calculations. Liebherr rise two positions to fifth and Sany drop to sixth. Given the difficulties that the Chinese market has been facing, it could be argued that it is surprising that they have not fallen further – that they have not indicates just how much they have been focusing on growing sales in markets outside of China over the last few years. The rest of the top ten is made up of Volvo CE, which sees its sales hold steady compared to last year, Hitachi Construction Machinery holding firm in eighth position, followed by JCB and Doosan Bobcat in tenth.

Trends and movers

It is no surprise that many China-based OEMs are lower placed than last year; LiuGong is down two places and Sany and XCMG are down a position. The biggest fall this year is from China’s Lovol, which drops seven places. However, in the main, it is notable how small most of the declines are. It is also worth pointing out that the three new entries on the list are all from China: LGMG at number 34, Tonly at 43 and Sinoboom at number 50.

Sinoboom produces access equipment and last year were actually the 51st company on the list, so just missed out. Tonly is a company that was founded recently and produce off-road dump trucks. LGMG manufactures access equipment and off-road dump trucks and have appeared in sister publication Access International’s M20 list of the world’s biggest access equipment manufacturers previously.

Japan-based firms have seen their percentage contribution to the list decline slightly from 20.9% to 19.9%. Last year the three bottom placed OEMs (numbers 48-50) were all Japanese and these three – Kato Works, Aichi and Furukawa – all drop out, replaced by the Chinese firms mentioned above.

Crystal ball time

Construction equipment sales in 2024 are predicted to be less than in 2023 by around 8% but overall figures are still expected to be, in historical terms, very healthy and certainly above the one-million-unit mark.

This would indicate a decline in next year’s Yellow Table’s revenues. However, we’ve seen before a drop in overall sales and the Yellow Table revenues seemingly being unaffected. Two possible reasons for this spring to mind: one is that the top 50 OEMs are increasingly taking a bigger percentage of sales from, say, the 51 to 100 biggest OEMs and thus their sales are not decreasing. Another is the opening of new markets to certain pieces of equipment – think specifically, of Asia and access equipment. Sales in this market – which could be classified as ‘new’ – may well be compensating for declines elsewhere.

As already discussed, North America has been a strong market for construction and is expected to remain so. Europe will likely suffer a small decline in sales this year and the general election in India will play a negative role in sales. China is key – having suffered steep falls in sales over the last few years 2024 is predicted to see a small decline as the market bottoms out. If China can perform better than expected, then next year’s Yellow Table may well post a figure not too dissimilar to this year’s.

ANOTHER RECORD HIGH IS REACHED

Last year's table declined from what was a record amount in 2021 by just 0.4%. Therefore, it is all the more impressive that this year's table has taken what was a strong total amount of US$230.6 billion and increased it to $243.4 billion, a 5.5% increase, to hit the highest amount ever seen on the Yellow Table.

The chart below gives an interesting snapshot of just how much sales have grown over the last decade. It also highlights how strong sales have been over the last three years for the world's top 50 OEMs, despite global sales falling slightly.

It is likely that in next year’s table sales will see a decline. While falling global sales over the last few years don't seem to have made a dent in the Yellow Table, the decline in 2024 may be higher than in previous years (although still a 'soft' landing') and it is unlikely that North America will have another year as strong as 2023.

While the total amount generated will likely fall from the record-high, total sales will almost certainly still be high in a historical context. The demand for the products made by the world's top 50 OEMs isn't going anywhere. 250 40%