Germany Crawler Excavator Market - Strategic Assessment & Forecast 2024-2029

INDUSTRY OVERVIEW

The Germany crawler excavator market size accounted for 29.2 thousand units in 2023 and is expected to reach 35.1 thousand units by 2029, growing at a CAGR of 3.11% during the forecast period. The German government announced it will invest USD 62.3 billion in green infrastructure projects in 2024. The government is increasing its focus on decarbonization and digitalization for a sustainable future. In addition, the German government announced that it will liquidate approximately USD 20 billion in subsidies for renovations and new construction in 2024. The government also planned to direct a considerable amount toward renovating old infrastructure (residential and commercial) and installing energy-efficient facilities. Hence, a surge in government spending on various infrastructure projects is expected to drive the Germany crawler excavator market during the forecast period. Also, in 2023, the German government planned to refurbish and repair roads nationwide and launch over 200 construction projects. 

Investment is also directed at various renewable energy resources as the country aims to achieve carbon neutrality by 2045. Under the German Government's Renewable Energy Sources Act (EEG) program, the government planned to increase solar power generation. The government aims to have the solar installation target by the end of 2024 at 88 GW, 128 GW by 2026, 172 GW by 2028, and 215 GW by 2030. The country's solar power installation increased by 35% in Q1 2024.

KEY HIGHLIGHTS

1. The Germany crawler excavator market was dominated by mini and small-sized excavators in 2023.
2. Mini-size excavators have the largest market share in the German crawler excavator market due to their versatile use in urban public infrastructure projects.
3. The rise in public infrastructure, mining, and renewable energy projects drives the Germany crawler excavator market.
4. In 2023, crawler excavator use in the construction industry accounted for the largest market share by end-users.
5. In 2023, the German crawler excavator sector experienced a transitional phase marked by a downturn in building construction and geopolitical tensions. New order intake decreased notably, yet sales remained relatively stable. This stability was attributed to reducing the significant order backlog from 2021 & 2022.
6. According to VDMA, construction equipment sales, including crawler excavators, are expected to decline by nearly 10% in 2024.
7. In 2023, the construction sector in Germany faced difficulties due to an overall economic slowdown. Factors like increased product costs, labor shortages, and financing challenges affected the market, especially in housebuilding. The PMI index has continuously declined since April 2022, suggesting a prolonged downturn with no immediate resolution.
8. Residential construction is expected to decrease by 6.0% in 2024 but recover by 3.5% in 2025 despite increased demand from Ukrainian refugees and migrants.
9. Additionally, non-residential construction spending is forecasted to decrease by 2.5% in 2024 before a slight recovery of 3.0% in 2025, influenced by weaker economic growth and high costs.
10. As of Sept 2023, HD Hyundai Infracore Co. is establishing its directly managed European subsidiary in Germany to counterbalance sluggish demand from financially strained Chinese developers.

MARKET TRENDS & DRIVERS

Growing Investment in Green Infrastructure Strategy

1. Germany has targeted to invest USD 220 billion by 2026 to support the industrial transformation, including climate protection, hydrogen technology, and expansion of electric vehicle charging stations.
2. The European Commission developed the Green Infrastructure Strategy in 2020. It aimed to develop organic systems, both natural and engineered, that act as living infrastructure in rural and urban settings to promote social, economic, and ecological growth, focusing on sustainable growth.
3. The German government approved USD 63 billion in investments to combat climate change in 2024, aiming to achieve greenhouse gas neutrality by 2045.

Growing Demand for Mini & Small Crawler Excavators in the Germany Crawler Excavator Market

1. In the Germany crawler excavator market, demand for mini and small excavators is growing in agriculture, forestry, and material handling waste management industries.
2. Construction companies nowadays are more attracted to purchasing compact excavators because they can operate in varied areas and are equipped with different technology attachments.
3. The demand for mini & small excavators is expected to be supported by Germany’s plan to lay out a state fund worth USD 546 million to USD 1.1 billion to support the mining of raw materials in response to the country’s transition to the green economy.
4. The electrification of crawler excavators is making significant progress. The year 2023 witnessed a whole range of new electric products. For example, Munich-based manufacturer Wacker Neuson launched the EZ17e mini excavator as a series product.

Surge in Renovation & Repair Projects for Public Infrastructure

1. In Sept 2023, Germany's Federal Ministry for Transport announced a USD 43.3 billion investment plan until 2027 to improve Germany's railway infrastructure at the 2023 Rail Summit in Frankfurt.
2. As stated by the ministry, most funds in 2024 will be directed towards Germany's construction industry, with approximately USD 20.4 billion designated for building renovations and new constructions.
3. The government highlighted that this financial injection could significantly encourage the construction sector to adopt greener practices. Moreover, subsidies for renewable energy will increase, with around USD 13.6 billion set aside.
4. The government aims to bolster the hydrogen industry with USD 20.1 billion, aligning with its renewable energy transition strategy. In the transportation sector, USD 13.5 billion will be allocated to enhance Germany's rail network from 2024 to 2027, while USD 5.0 billion will be invested in the nation's electric vehicle charging infrastructure.

Increasing Focus on Sustainability and Smart Cities Development Projects

1. Germany aims to reduce CO2 emissions by 65% by 2030 and achieve net zero emissions by 2045. To reduce their carbon footprint, construction companies are focusing on using compact construction equipment in the German crawler excavator market.
2. “Green building” is one of the German government's key investment strategies and is expected to boost the demand for compact-powered construction equipment. Germany has invested approximately USD 12.5 billion in developing green buildings in compliance with ESG norms.
3. The growing demand for excavators is attributable to improvements in the underground mining and construction sectors and a few government projects, such as the smart city project. Moreover, the market for compact excavators is evolving into a more innovative sector due to the intelligent systems driven by IoT and data analysis for service, networking, and sustainability.

INDUSTRY RESTRAINTS

Germany’s Residential Slump Expects to Impact the Demand for Crawler Excavators Negatively

1. The German housebuilding sector risks a significant decline due to the cancellation of construction projects and a slowdown in order volumes. Elevated interest rates and escalating materials costs fuel this crisis.
2. According to calculations by the German Property Federation (ZIA), there is currently a shortage of 600,000 apartments in Europe's largest economy. This deficit is projected to increase to 830,000 by 2027.
3. Germany's housing crisis persists, as the Federal Statistical Office (Destatis) reported a 23.5% decrease in residential building permits issued in January 2024 compared to the same period in 2023. Only 16,800 apartments were granted permits in January, marking a decline from the previous year.

Skilled Labour Shortage in the Country Hampers the Pace of Construction Projects

1. In Feb 2024, the German government highlighted the significant challenge facing Europe's largest economy, emphasizing growth constraints due to a workforce shortage. For 2024, the government anticipates a growth rate of 0.2%, down from the previous forecast of 1.3%.
2. With approximately 700,000 vacancies currently unfilled, Germany's economic growth potential has declined to 0.7% from around 2% in the 1980s and is projected to decrease further to 0.5% if the issue remains unresolved.
3. Moreover, Germany faces a significant shortage of at least 300,000 skilled workers by 2030, particularly in the renewable energy industry sector, as demand for jobs in this field increases.
4. Germany's labor market faces structural challenges intensified by the digital revolution, leading to the demand for swift adjustments from workers, businesses, and the government for global competitiveness. Despite rapidly recovering from the COVID-19 crisis, persistent issues include workforce distribution shifts and declining productivity.

VENDOR LANDSCAPE

1. Caterpillar, Komatsu, Volvo CE, Hitachi Construction Machinery, JCB, and Liebherr are leaders in the Germany crawler excavator market. These companies have a strong market share and offer diverse sets of equipment.
2. Kubota, Liu Gong, Yanmar, John Deere, Wacker Neuson, and Bobcat are niche players in the Germany crawler excavator market. These companies offer limited product diversification and have a strong presence in the local German market.
3. SANY, Zoomlion, HD Hyundai Construction Equipment, Takeuchi, Develon, Kobelco, Kubota, CNH Industrials, and XCMG are emerging in the Germany crawler excavator market. These companies are introducing new technologically advanced products to challenge the market share of the country’s market leaders.
4. Mecalac and Hyromek are stragglers in the Germany crawler excavator market. These companies generally lack innovative and advanced product technology compared to competitors.