Positive Outlook for Global Off-Highway Market
Amidst recent turbulence, the global off-highway vehicle market is showing signs of stabilization in 2024. While unit sales are expected to dip slightly this year, the forecast indicates persistent long-term growth. This positive trajectory is fueled by the increasing mechanization in emerging economies, which continues to drive sales.
As supply chain challenges resolve and the market returns to a more stable phase, optimism grows within the industry. Although the post-Covid surge is tapering off and global unit sales are projected to be lower in 2024 compared to previous years, steady expansion is anticipated in the long run, propelled by the adoption of mechanization in burgeoning markets.
Despite some deceleration in construction sales across various countries due to factors like inflation and interest rate hikes hindering expenditure, the momentum of mechanization adoption remains strong in emerging economies. Countries such as India, South-East Asia, and Brazil are poised for increased machinery uptake driven by escalating wages and the need to boost food production.
ICE Continues to Dominate Off-Highway Machine Market in 2024
While electrified machines are on the rise, internal combustion engine (ICE) sales, including hybrids, are projected to sustain growth until 2035. This growth is particularly notable in low-power ICE machines serving agriculture, construction, and lift-truck sectors. India's thriving tractor market is anticipated to propel ICE machine sales in the Asia-Pacific region, while stable sales are expected in the Americas and EMEA regions.
Battery electric machinery sales, although a smaller segment currently, are forecasted to see accelerated growth post-2030, reaching 350,000 units annually by 2035. Despite challenges such as unclear regulations and upfront costs hindering demand in the short term, certain segments like forklifts and aerial work platforms (AWPs) are experiencing high penetration rates. Strong growth is anticipated in APAC, with significant penetration rates in EMEA and the Americas.
Alastair Hayfield, Senior Research Director at Interact Analysis, says, “Lower power machinery will continue to dominate both ICE and battery electric sales in 2024. Most ICE engine sales will be in the sub-100 kW category, with 75% of those below 55 kW. Furthermore, machinery under 230 kW constitutes the overwhelming bulk of battery electric sales, and almost all battery electric machines sold are likely to be under 100 kW in power this year, reflecting the ongoing cost and technical challenges of electrifying larger machinery.
“Moving forward we expect the off-highway low-power/low margin engine market in APAC and the off-highway high-power/high margin engine markets in EMEA and North America to be hotly contested, particularly as sales of automotive and on-road commercials decline.”
