1:Electrification will disrupt the dealer’s revenue model
Electrification of construction equipment is in its early stages, but Grand View Research reports that the global off-highway electric vehicle market size is expected to reach US$42 billion by 2030. Growth will be driven by lower operating costs as well as improved battery technology and lower costs for batteries. “You are going to see the whole industry switch to battery-operated or hy-brid-machines,” says Clegg. “The amount of parts drops by about 90%, so if your operating costs for a skid-steer were $20 an hour, that drops to $3 per hour.”
2:Connected machines and jobsites to cut owning and operating costs
Nearly all new construction equipment machinery is equipped with technology that allows equipment owners and dealers to avoid downtime through preventative maintenance and early detection of mechanical issues. The challenge has been getting equipment owners on board. “Across the industry, adoption of telematics is definitely under 50%, and maybe only 30%,” says Henderson.
3:Technology will bring greater efficiency to parts and service
Parts are the bread and butter of a dealership, but for an end-user, buying parts is anything but easy. When a machine is down, the costs are astounding and end-users and rental dealers are likely to pay a premium to get a quality part as quickly as possible. Buyers often need guidance; that may mean multiple phone calls and texts from multiple sources, including OEM and aftermarket parts dealers. Each part of the distribution chain has its own distribution, logistics, and markup.
4:Rental continues to grow
Rental is expected to continue its upward trajectory fueled by higher prices for construction machinery and rising interest rates. According to the America Rental Association, construction equipment rental revenue is expected to increase 12.5% in 2022 to surpass US$41.6 billion.
The concept of equipment-as-a-service, which would transfer responsibility for equipment to the manufacturer or dealer, allowing customers to focus on their core business, is also gaining interest. Unlike equipment rental, it might involve an entire fleet to be provided for several years with the potential to tie invoicing directly to usage.
