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Mexico’s fast-growing heavy construction equipment market

September 1, 2018
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Why this is important to Wisconsin businesses: By supplying Mexican manufacturers, U.S. companies can tap into the larger Latin American market.

The size of Latin America’s market for heavy construction was valued at $4.31 billion in 2017, and is projected to reach $6.39 billion by 2022, growing at a compound annualized growth rate (CAGR) of 6.8 percent. The construction segment accounted for the dominant share of the total heavy construction equipment market in 2017.

In 2017, excavation and demolition applications dominated the market, and are expected to grow at a CAGR of 6.5 percent. Excavators, cranes and dozers are the main equipment used for excavation and demolition activities. Heavy lifting applications are expected to grow at the highest CAGR, 7.4 percent from 2017 to 2022.

The heavy construction equipment market includes heavy-duty vehicles, which are specifically designed for use in various construction operations such as drilling, hauling, excavating, paving and grading. The market players in Mexico’s heavy construction equipment industry cater to end-user industries including manufacturing, oil and gas, forestry, mining, construction and infrastructure. Heavy construction equipment manufacturers focus on designing high-quality, high-performance, high-efficiency products. The prominent players in the market have introduced advanced heavy construction equipment that adheres to government regulations and caters to demand from end users.

The key factors driving the growth of Mexico’s heavy construction equipment market include recovery of the construction sector, a surge in public-private partnerships and rapid urbanization. However, Mexico’s heavy construction equipment market growth is restrained by the increasing carbon footprint, shifting oil prices, and weaker economic conditions in countries such as Brazil and Argentina. Demand for heavy construction equipment has increased within the region, especially in Colombia and Chile, because of rapid urbanization and heavy investment in infrastructure. In addition, prominent players such as Caterpillar and Volvo are working to develop more efficient earthmoving machines to reduce carbon emissions and improve efficiency.

The Mexico heavy construction equipment market is segmented based on equipment type, application, end user and country. In 2017, the earthmoving equipment segment dominated Mexico’s heavy construction equipment market, with a 48.5 percent share, followed by the material handling equipment segment. This is attributed to plummeting operational costs with the advent of smart and intelligent excavators. In addition, the market is driven by the government’s proactive role in developing the industrial and commercial sectors.

The construction industry is the major end-user industry for heavy construction equipment in Latin America, accounting for 34 percent in 2017. Equipment such as excavators, loaders, motor graders, backhoes, cranes, dumpers and tippers are utilized for large-scale construction activities.

Key findings regarding Mexico’s heavy construction equipment market:

  • The material handling equipment segment is expected to grow at the highest CAGR, 8.2 percent, from 2017 to 2022.
  • The tunneling application segment was valued at $743 million in 2017.
  • Mexico’s heavy construction equipment market is expected to grow at a CAGR of 5.5 percent.
  • Chile is the fastest-growing market among the Latin American countries.

The key companies profiled in the report include Volvo, Caterpillar, Komatsu, Hitachi Construction Machinery, Doosan Infracore, Leibherr Group, CNH Industrial, Terex Corporation, JCB and Atlas Copco.

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