iC Yellow Table 2008: World’s 50 largest construction equipment manufacturers
09 May 2008
There was no change in the top three companies in the global construction equipment industry in 2007, with Caterpillar, Komatsu and Terex staying put. But Volvo is the new no. 4, thanks to its acquisitions of Ingersoll Rand's road building equipment arm and a stake in Lingong, with clear water between it and fifth-placed Liebherr.
Hitachi stays at no. 6, while the big faller is its US joint-venture partner John Deere, which fell from no. 4 last year to no.7 on 2007 revenues. CNH and JCB are unmoved at no. 8 and no. 10 respectively, while Sandvik Mining & Construction is new to the top 10, thanks in part to its acquisition of Extec and Fintec last year.
Ingersoll Rand is missing from the Yellow Table this year, following its divestment to Volvo, along with the sale of Bobcat and its remaining construction equipment businesses to Doosan Infracore last year. Doosan, as a result, has moved up two places to no. 16 in this year's Yellow Table.
Another result of Ingersoll Rand's exit from the industry is the share of the market by US-owned manufacturers is it's lowest ever. Based on 2007 revenues, US companies had a 39.6% share of the top 50 total last year - down sharply from 45.6% last year and a high of 47.7% in the 2005 edition of the Yellow Table.
The second name missing from this year's Yellow Table is Dynapac. Fellow Swede Atlas Copco acquired the road building equipment specialist last year, which help it move up a place to no. 11 in this year's rankings.
The absence of these two companies as separate entities has of course opened the door to two new names in the Yellow Table. Telcon, an earthmoving equipment joint venture in India between Hitachi and Tata is new at no. 38, while drill rig and consumable manufacturer Boart Longyear makes its debut at no. 42.
Mergers also played a part in the biggest climb of the year. Wacker's acquisition of Neuson last year catapulted the newly formed Wacker Neuson Group up 19 places to no.30, from Neuson's position of 49 in the 2006 rankings.
In all the cases of mergers and acquisitions mentioned above, the acquiring companies are yet to benefit from a full year's contribution to revenues from their newly bought subsidiaries. As a result, they should climb higher in the 2009 edition of the Yellow Table.
This also applies to the general regional picture. Although the share of revenues attributable to US companies has fallen below 40% for the first time, this money is yet to fully ‘re-appear' with acquiring companies like Volvo and Doosan.
As a result, the total share of the industry enjoyed by Swedish and Korean headquartered manufacturers is yet to show a significant gain. Again, it will be the 2009 edition of the Yellow Table before the effects of 2007's various deals are fully consolidated into the standings and regional picture.
Even without these revenues in this year's table, it is interesting to reflect that growth for the top 50 manufacturers last year was almost as high as in 2006, despite the US market turning down in 2007. This implies that strength elsewhere in the global industry made up for the US downturn, and perhaps even more than compensated for it.
While the overall effect was for global growth, there is no doubt that the US downturn, particularly in the residential sector, had an impact on companies with high exposures. The falls for Deere, which is only active in the Americas in construction equipment, and Gehl in this year's table are undoubtedly a result of an excessive reliance on the lighter end of the US construction market.
But the buoyancy of the rest of the world is a critical point going into 2008, as US construction output looks set to fall again this year. If developing markets like China and India can post another year of strong growth, the global industry as a whole stands a reasonable chance to stay in positive territory.
The growth of emerging markets may also see new names - like Telcon this year - added to the Yellow Table in 2009 and in years to come. For example, in this year's ranking Russia's largest domestic manufacturer, GAZ Group just missed out on a place in the top 50.
The Yellow Book 2009 contains details of more than 6000 pieces of construction equipment available throughout the world listed in critical factor order.
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