France Construction Equipment Market - Strategic Assessment & Forecast 2023-2029

INDUSTRY OVERVIEW

France construction equipment market was valued at 57,392 units in 2022 and is expected to reach 80,292 units by 2029, growing at a CAGR of 4.91%. In 2020, the government planned to invest over USD 100 billion under the France Relance 2030 program. The investment was directed at developing green hydrogen fuel, improving mobility, and supporting railway & biodiversity sectors. The housing sector witnessed a sharp growth of ~14% in 2021 due to increased government investments. In 2022, the government invested over USD 3 billion to renovate residential and commercial buildings nationwide. The government is investing in infrastructure development projects, including expanding airports, railway lines, roadways, and highways across the country. The surge in infrastructure development projects is expected to drive the France construction equipment market during the forecast period.

Further, the government aims to become carbon neutral by 2050. Therefore, it has taken strong measures to reduce mining production and completely ban fossil fuel extraction by 2040 to control carbon emissions. There is an increase in investment in developing the renewable energy sector. In 2022, around USD 1 billion was allocated to develop a nuclear power plant, and USD 1.9 billion funds for green hydrogen fuel. Also, the government invested USD 4 billion and USD 2.5 billion to manufacture electric and hybrid vehicles in 2022. In addition, it has invested USD 1 billion in developing 40 GW of offshore wind farms in 2022.

KEY HIGHLIGHTS

• Material handling equipment accounted for the largest share of the France construction equipment market in 2022. Forklifts & Telehandlers in the material handling segment had the largest share in 2022. Rising investment in housing & warehouse expansion projects is expected to drive the demand for forklifts in the market.
• The French government aims to spend USD 8 billion on infrastructure development and renovation projects. Long-term industrial developments will fuel investment. Hence, the government aims to invest USD 94.4 billion in transportation infrastructure development between 2018 and 2037.
• The government also invested USD 28.1 billion in the mega Grand Paris project to connect Paris with ILe-de-France with 200 kilometers of a new metro line. The project aims to link Paris with other major regions through new, extended metro and rail lines.
• Strict government rules to control carbon emissions and exhaustion of their reserves are major factors that lead to a decline in the mining industry.
• In 2017, the French Government passed a law to completely ban fossil fuel extraction in its territories, resulting in decreased mineral production and the closure of several mines across the country. However, the government plans to invest in lithium mining extraction to become self-reliant in manufacturing electric vehicle batteries in 2022.
• The government announced investing USD 25 billion in renewable energy over the next five years to support over 25 GW of new solar, onshore wind, and hydroelectric generation capacities in 2022.
• The French government has also set the target of building 50 offshore wind farms by 2050, with a total capacity of 40 GW, likely accounting for 20% of France's electricity consumption. To achieve this goal, the government announced an allocation of 2GW projects each year from 2024.

MARKET TRENDS & DRIVERS

Government Investment For Grand Paris Project & Olympic 2024
The French government is expected to increase the investment in sports facilities to promote sports in the country. In 2022, the government planned to invest USD 200 million to build 5,000 new sports facilities by the start of the Olympic Games in Paris in 2024. The government aims to build 1,000 multi-sports athletic complexes, 500 tennis courts, and 500 basketball courts by 2024. The investment is also directed to improve public infrastructure facilities and hotels, which are majorly used for accommodating international delegations of athletes & media persons. Further, the government also launched the Grand Paris Express project to upgrade the transit facilities across Paris. The government invested USD 28.1 billion in uniting Paris with ILe-de- France with 200 kilometers of the new metro line in 2022.

Rise In Infrastructure & Public Transit Projects
In 2023, the French government announced a new effort to invest in transport infrastructure to develop alternatives to the road and promote smooth mobility. The government planned to invest USD 108.1 billion to develop railways by 2040 in 2023. In 2022, the government aimed to invest USD 7 billion for the next ten years to develop 9,000 kilometers of small railways line. In addition, USD 4.8 billion will be allocated for maintaining and modernizing public transport, such as metros & trams, in 2022.

Renovation of Thermal Insulation In Buildings
Residential buildings in France are responsible for 36% of carbon emissions. Therefore, the government planned to phase out fossil fuels and build zero-energy buildings in 2021. Zero-energy buildings use renewable energy resources for their energy requirements. According to the French residential industry data, nearly 55% of French’s current residential buildings were built before 1975. The rise of building renovation projects to reduce carbon emissions is expected to trigger the demand for compact and electric construction equipment in the France construction equipment market.

Surge In Demand For Demolition Excavators
The French government is investing in renovation and rebuilding projects nationwide in 2023. Several aged infrastructures are demolished for renovation purposes which prompt the use of demolition excavators in the France construction equipment market. Crawler excavators having higher durability are used for demolition. High-durable equipment can withstand demolition projects. Further, Hitachi Construction Machinery in Europe sells crawler excavators designed solely for demolition. They provide greater protection for the person in the cab and greater durability for the toughest demolition projects. These machines as fitted with mono, two- or three-piece booms, and their demolition machines can reach up to 40m. Other major OEMs like Liebherr, Hitachi, and Kobelco majorly offer demolition excavators in the France construction equipment market.

INDUSTRY RESTRAINTS

Rising Building Material Prices
The building materials price witnessed sharp growth in Q4 2021. A surge in building material prices continued in 2022, resulting in an 18% rise in prices of materials such as iron, steel, cement & bricks in the French market. The rise in prices is due to growing inflation & surge in transport costs. The ongoing war between Russia and Ukraine disrupts the raw material supply, further worsening the France construction equipment market. The increase in materials prices hampers the region's real estate industry. Growing prices make it difficult for construction companies to meet projected construction deadlines for new buildings.

Focus on Reducing Carbon Emission
France aims to achieve its national goal of cutting carbon emissions by 40% by 2030 and eliminating greenhouse gas emissions by 2050. In France, the decarbonization of construction sites and buildings is one of the major challenges. As per the data published by the Ministry of Ecological Transition, the construction industry in France accounts for approximately 43% of yearly energy consumption and 23% of GSG emissions. Additionally, the emission norms in the country are expected to hamper the demand for large diesel-powered construction equipment in the France construction equipment market during the forecast period.

VENDOR LANDSCAPE

• Caterpillar, Volvo Construction Equipment, Kobelco, and Komatsu are market leaders in the France construction equipment market. These companies have a strong market share and offer diverse sets of equipment.
• In 2021, Volvo Construction Equipment launched three compact electric equipment in the European market, including France.
• BOMAG, MECALAC, Toyota Material Handling & Manitou Group are niche industry players. These companies offer low product diversification and have a strong presence in the local French market.
• SANY, Kubota, and Hitachi Construction Machinery are emerging in the France construction equipment market. These companies are introducing new technologically advanced products to challenge the share of the market leaders. In 2021, SANY launched a new SY305C crawler excavator with higher power and stability in France.
• Takeuchi & Yanmar have low product diversification, and these companies are lagging in adopting new technologies used in construction equipment.