Construction Equipment Rental Market is Estimated To Witness High Growth Owing To Trend of Equipment Renting Over Buying
The construction equipment rental market consists of heavy construction machinery that is rented to industries and individuals when needed. These include excavators, loaders, Bulldozers, road rollers, forklifts and others. Renting construction equipment offers several advantages over buying such as lower capital cost, flexible rental periods, and shifting rentals based on projects and needs. It helps industries to fulfill equipment requirement for short-term projects in a cost-effective manner.
The Construction Equipment Rental Market is estimated to be valued at US$ 237.8 Bn in 2023 and is expected to exhibit a CAGR of 5.1% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market key trends:
The construction equipment rental market size is driven by the trend of renting over buying equipment. Buying heavy construction machinery involves high initial capital cost which impacts cash flows of industries. Renting equipment on an hourly, daily or project basis reduces upfront investment and shifts capital expenditure to operational expense. This provides flexibility to industries and helps optimize their equipment fleet based on changing project demands. Renting also eliminates risks of equipment price fluctuations and resale value uncertainties. Industries can upgrade or change equipment models easily based on technological advancements. This trend of renting over ownership is boosting demand in the global construction equipment rental market.
Porter's Analysis
Threat of new entrants: Low capital requirements and availability of used equipment makes the entry easy however established brand names and customer loyalty poses significant barrier.
Bargaining power of buyers: Large construction companies have significant bargaining power over rental companies due to their ability to own equipment. However, for small and medium construction players equipment rental is a cost-effective alternative.
Bargaining power of suppliers: Presence of global equipment manufacturers like Caterpillar, Komatsu etc. gives them pricing power over rental companies. However, equipment rental companies have alternative supplier options which balances out the supplier power.
Threat of new substitutes: Equipment rental has emerged as an attractive substitute to equipment ownership by providing operational flexibility at lower costs. However, technology change in the construction equipment or fuel type can impact equipment rental business.
Competitive rivalry: Intense competition among global and regional players to cater growing rental demand across construction, infrastructure and other sectors.
SWOT Analysis
Strength:
- Global network and diverse fleet allows one-stop solution for rental needs
- Strong brand image and industry experience provides competitive advantage
Weaknesses:
- Higher operating costs than individual plant ownership
- Dependent on economic cycles and construction activity
Opportunities:
- Growth in infrastructure and construction sectors in developing regions especially in Asia-Pacific and Middle East & Africa
- Emergence of equipment rental for new applications like utility repair and maintenance works
Threats:
- Technological obsolescence of older equipment fleet
- volatiliy in fuel and equipent prices impacts operating margins
Key Takeaways
The global construction equipment rental market size is expected to grow at a CAGR of 5.1% during 2023-2030. Growth in global infrastructure spending especially in emerging economies across Asia and Africa is a major growth driver. China currently dominates the market with a share of over 25% in 2023.
Regional analysis: Asia Pacific remains the fastest growing regional market for construction equipment rental with China and India contributing significantly to the overall growth. Increasing focus on infrastructural development of roads, transportation, utility networks etc. in developing Asian countries provides immense opportunities for rental companies.
Key players operating in the construction equipment rental market are Ramirent, AKTIO Corporation, NISHIO RENT ALL Co., Ltd., AB2000, Cramo Oyj, Ahern Rentals Inc., Byrne Equipment Rental, American Equipment Company, Inc., United Rentals, Inc. (acquired BlueLine Rental), and Ashtead Group plc. Major players are focused on expanding their global footprint and fleet capabilities through strategic acquisitions to leverage emerging opportunities.
Get more insights on this topic: https://creativenewsalert.blogspot.com/2023/12/heavy-construction-equipment-rental-is.html
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