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Off-highway market predicted to stabilise

Interact Analysis says there are encouraging signs for global off-highway market

Market analysis firm Interact Analysis says there are encouraging signs for the global off-highway market in 2024 following a turbulent few years, as supply chain issues resolve themselves and the market appears to be returning to a more stable business cycle.

The post-COVID boom is coming to an end and global unit sales are forecast to be smaller in 2024 than last year, but steady long-term growth is anticipated as increasing mechanisation in emerging markets drives sales, it says.

Interact Analysis predicts that, In many countries, construction sales will slow for a range of different reasons, including high inflation and interest rates, which are curbing spending, housebuilding and infrastructure development.

However, persistent, long-term growth is being seen in emerging economies as the rate of adoption of mechanisation gathers momentum. India, South-East Asia and Brazil are expected to see wider adoption of machinery, driven by rising wages and demand to increase food output.

Diesel still going strong

In terms of engine type, despite the increasing use of electrified machines, internal combustion engine (ICE) sales (including hybrids) are forecast to continue growing out to 2035, pushed up by low-power ICE machines in agriculture, construction and lift-trucks.

Interact Analysis says that in the battery electric machinery market, sales will remain a relatively small proportion of overall global volumes, while demand this year will remain very low as lack of clear regulations and comparatively high upfront costs continue to constrain sales.

This is with the exception of forklifts and aerial work platforms (AWPs), where penetration rates are already high. After 2030, battery electric sales volumes are forecast to accelerate, rising to 350,000 units sold annually by 2035, with high volumes expected in APAC and strong penetration rates in EMEA and the Americas.

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“Lower power machinery will continue to dominate both ICE and battery electric sales in 2024,” Interact Analysis senior research director Alastair Hayfield says.

“Most ICE engine sales will be in the sub-100kW category, with 75 per cent of those below 55kW. Furthermore, machinery under 230kW constitutes the overwhelming bulk of battery electric sales, and almost all battery electric machines sold are likely to be under 100kW 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.”

Global off-highway vehicle forecast. Image: Interact Analysis
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