Following on the success of the on-road study an off-road study will be launched in 2010.  A preliminary version has already been completed for a single client, and the multi-client version will be available in Q2 2010.  The study covers all of the major global producers and markets for non-road mobile machinery including construction equipment and agricultural tractors.  This new study will be unique when it it is launched and complements the on-highway study.

The main driver for this market is the adoption of ever tighter emissions legislation.  The US EPA’s Tier IV Interim and Tier IV will be of a similar stringency to its current on-road legislation, and be introduced in most equipment by 2015, following a phase-in period starting in 2011.  The legislation, including has specific phase in dates, compliance requirements and emissions levels based on a number of different power bands, ranging from <18kw and below to <560kw.  Smaller engines, in the 56kw and below category are likely to meet the legislation without significant costly aftertreatment, but heavier engines are likely to move to a combination of EGR, diesel particulate filters and  SCR, depending on the specific application, power band and the engine manufacturer’s strategy.

The Off-Highway Market analysed in the study accounts for nearly 2.2m units, a total market smaller than the on-highway  market, but with considerably more diversity.   Agricultural tractors (including all but the smallest variants around 20hp or less) accounted for 1.3m of that volume. An overview, presented below, illustrates the complexity of the market.  Whilst the top five applications account for 90% of production covered in the report, and the top five countries 75%, the top five manufacturer groups account for just 40%.  A further 57 manufacturers account for the remaining 60%, a much longer tail than in the on-highway heavy vehicle segment.

A key finding of the study was that there is still considerable scope for consolidation in the sector, both at an equipment manufacturer and an engine level.  Over 400 engines were identified, from over 60 engine manufacturers. Many of these engines are likely to disappear as emissions legislation is tightened, as the market in developing economies matures and as manufacturers consolidate.

An interesting aspect of the study is that KGP is examining not just production by engine but also the parc, which gives valuable additional insights to KGP’s clients.  A flyer for the On-road study and preliminary brochure for the off-highway study are included at the end of this newsletter. For further details or to discuss any aspect please contact alexwoodrow@kgpauto.com