Off-road Vehicle Market – Snapshot
Vehicles that can be driven on off-road and rugged conditions are known as off-road vehicles. They generally have large tires with flexible suspension and open, deep treads. Common use of such vehicles is for exploration in areas that do not have tar roads. Utilization of higher power vehicles and higher clearance enables access to trails and forest roads that have low traction and rough surfaces. Moreover, vehicles employed in the construction industry and for farming purposes are off-road vehicles. Among all industries, the construction industry held a prominent share of the off-road vehicle market.
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Rise in industrialization is boosting the development of infrastructure. Rising demand for industrial products is fueling the development of new industries. Moreover, expansion of existing industries is propelling the market for construction equipment. Rise in industries is driving the demand for minerals and metals, which are extracted from their ores. This, in turn, is boosting the mining industry, which requires mining equipment such as shovels, loaders, haul trucks, and draglines. Moreover, expansion of the construction industry depends on the economic growth of the country, as sluggish expansion is projected to hamper the market for vehicles that are utilized in construction, mining, and agriculture. The number of construction sites is rising due to increasing industrialization and urbanization across the globe. Expansion of existing industries and establishment of new small and medium enterprises are likely to boost the off-road vehicle market.
Globally, the population is rising at a significant pace, and according to the United Nations, the global population is anticipated to reach around 8.6 Bn by 2030, which was 7.6 Bn in 2016. Rising population has boosted the construction of new residential as well as commercial places, thus driving the construction equipment market. Economic expansion has propelled the investment for the improvement of infrastructure across the globe, specifically across developing countries, which are witnessing heavy construction of roads, railways, and industries.
High cost of manufacturing and maintenance is estimated to significantly restrain the off-road vehicle market. Regulatory bodies across globe are enacting stringent norms to reduce vehicle (carbon) emissions. Off-road vehicles require a large amount of power for their operation; hence, they burns considerable fuel and produces more emission, as compared to passenger and commercial vehicles. Development in vehicle emission of such vehicles is likely to boost the off-highway vehicle market during the forecast period.
Asia Pacific held a leading position in the global off-road vehicle market in 2017. The region is likely to maintain its dominance of the global off-road vehicle market during the forecast period owing to development in infrastructure in various countries of the region. Expansion of industrial and IT sectors in countries such as China, India, and South Korea is likely to boost the development of infrastructure in these countries. This in turn is expected to fuel the demand for construction equipment in the region at a rapid pace. Majority of the population in the region depends on agriculture for living. Advancements in the procedures used in agriculture is prompting the utilization of agricultural equipment. Governments of countries such as India provide subsidies to buy agricultural equipment such as tractors in order to improve the production from agriculture and increase share of the agriculture sector in their respective countries’ GDP. China and India accounted for nearly 50% of the tractor production in the region in 2017. This is due to the large land area under agriculture and exports from these countries to neighboring nations. Asia Pacific has a significantly low average price for off-road vehicles owing to higher share of agriculture equipment, which has a considerably less price as compared to construction equipment.
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The off-road vehicle market in Latin America is projected to expand at a considerable growth rate due to rise in gross domestic production in developing countries of the region. Major trends driving the market in the region are significant investments by key players and governments of countries are enhancing vehicle production, which in turn is driving the demand for off-road vehicles in the region. Rapid improvement in infrastructure and expansion of the construction industry in the region are propelling the off-road vehicle market in the region. Economic development in Brazil, after witnessing recession for three straight years, is likely to improve the economy of Brazil. This, in turn, is expected to boost the off-road vehicle market in the country.
North America is home to a prominent mining industry. Equipment utilized in the mining industry are majorly produced in the U.S. The U.S. is a notable manufacturer of construction equipment. The market in North America is likely to expand at a significant growth rate owing to increase in production of agriculture equipment. This is also supported by the transfer of production bases of off-road vehicles from Mexico to the U.S. The announcement of ‘America First Policy’, President Trump, has prompted several vehicle manufacturers to move their production sites from Mexico to the U.S.
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The global off-road vehicle market is dominated by a few key players, as planning, design, manufacturing, and assembly of off-road vehicles requires significant capital investment, high precision during fabrication of components, which requires technical expertise and is expensive. All players operating in the off-road vehicles market have major production bases, and they operate through various locations across the world. Major players operating in the global off-road vehicle market include Caterpillar Inc., Deere & Company, KUBOTA Corporation, Escorts Limited, YANMAR CO., LTD., CLAAS KGaA mbH, Mahindra & Mahindra Ltd., Hitachi, Ltd., SAME DEUTZ-FAHR Italia S.p.A., AGCO Corporation, AB Volvo, Doosan Infracore, BELL Equipment., Liebherr- International AG, Komatsu America Corp., CNH Industrial America LLC, ALLU Finland Oy, Manitowoc, and Terex Corporation. Some players are focused on construction equipment, some are market leaders in agricultural equipment; however, several players among those mentioned above are operating in both construction and agricultural equipment.
Major players are focusing more on joint ventures, expansion, mergers, and acquisitions with component manufacturers and local players in order to distribute the work load and increase their trade in various countries. Research & development is a major factor playing an important role in enhancing the operation, size, and effectiveness of off-road vehicles.
Accelerating Rate of Industrialization and Urbanization to Augment Growth of Off-road Vehicle Market
Vehicles that can be driven on rough terrain and tough conditions are known as rough terrain vehicles. They for the most part have huge tires with adaptable suspension and open, profound tracks. Basic utilization of such vehicles is for investigation in zones that don’t have tar streets. Use of higher force vehicles and higher freedom empowers admittance to trails and backwoods streets that have low footing and unpleasant surfaces. In addition, vehicles utilized in the development business and for cultivating reasons for existing are rough terrain vehicles. Among all enterprises, the development business held a noticeable portion of the rough terrain vehicle market.
Ascend in industrialization is boosting the advancement of foundation. Rising interest for mechanical items is filling the advancement of new ventures. Besides, development of existing enterprises is moving the market for development gear. Ascend in ventures is driving the interest for minerals and metals, which are removed from their minerals. This, thusly, is boosting the mining business, which requires mining gear like digging tools, loaders, pull trucks, and draglines. Besides, extension of the development business relies upon the monetary development of the country, as slow development is projected to hamper the market for vehicles that are used in development, mining, and horticulture. The quantity of building destinations is ascending because of expanding industrialization and urbanization across the globe. Extension of existing businesses and foundation of new little and medium undertakings are probably going to support the rough terrain vehicle market.
Rising populace has supported the development of new private just as business places, in this manner driving the development gear market. Financial extension has impelled the speculation for the improvement of foundation across the globe, explicitly across non-industrial nations, which are seeing substantial development of roads, rail routes, and businesses.
Significant expense of assembling and support is assessed to altogether control the off-road vehicle market. Administrative bodies across globe are instituting severe standards to lessen vehicle (fossil fuel byproducts. Off-road vehicles require a lot of force for their activity; consequently, they consumes extensive fuel and creates more outflow, when contrasted with traveler and business vehicles. Advancement in vehicle outflow of such vehicles is probably going to support the off-roadway vehicle market during the estimate time frame.
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