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Intermat: 3 takeaways as construction enters an uncertain new world

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Intermat: 3 takeaways as construction enters an uncertain new world
Intermat 2024 attracted over 127,000 visitors. (Image: Intermat)

At last month’s Intermat show in Paris, a group of journalists from KHL Group, the publisher of Construction Briefing, turned out in full force.

They kept tabs on all of the major debuts, engaged in deep conversation with both exhibitors and attendees, and obtained the newest technology.

And after several coffee cups and hundreds of thousands of steps, managing editors of International Rental News Murray Pollok and Andy Brown of International Construction distil the experience into three main lessons:

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1) Chinese OEMs expedite plans for worldwide expansion
There were 1,065 exhibitors at Intermat; precisely 290, or more than a quarter, were Chinese. To put this in perspective, only 89 exhibitors from Italy and 59 exhibitors from Germany were present at the Paris-based show, out of 350 exhibitors located in France.

The fact that more than 25% of the exhibitors were foreign nationals serves as an appropriate example of Chinese OEMs’ aspirations to expand internationally. The top OEMs that have dominated the Yellow Table, KHL’s unique list of the top 50 OEMs worldwide by sales, in recent years are all becoming more and more focused on export markets.

This is a result of our global strategy restructuring during the last two to three years. We observe a really positive growth in the worldwide industry every year. Thus, we currently rely on more than only the domestic Chinese market. We are focusing more on the worldwide market. This is how we’re going to play it.

The Chinese market has experienced both catastrophic lows and soaring highs. It seems natural that the big Chinese OEMs, such as XCMG, Sany, Zoomlion, LiuGong, and others, would want to grow into other regions so they aren’t simply dependent on one area even when the industry is (slowly) starting to recover. The developing nations of Africa and the Middle East were the original focus, but the building industry’s future will be determined by how effectively these nations execute their plan, with Europe and North America being the next in line. It was no coincidence that there were so many Chinese OEMs at Intermat; it was a reflection of their aspirations to expand internationally.

2) Without subsidies, the switch to new power technologies will be difficult.
One of the biggest challenges facing contractors and rental companies is making costly investments in new power technologies, whether they be battery driven equipment (which is usually twice as expensive) or other technology.

The topic of whether or not the government offers financial incentives or subsidies to hasten the transition generated a lot of conversation during Intermat.

Speaking at one of the industry conferences held during the show, Fabrice Blanc, the director of equipment at contractor Eiffage, stated, “We have to make certain choices, but it’s apparent there has to be some incentives. Why are there no subsidies? They will eventually need to assist us. We are making an effort, but we are unable to provide for every workplace without incentives.

The managing director of Loxam’s French division, Olivier Grisez, concurred at the same meeting, saying, “If there is no clear incentive, we will be blocked by the cost.” Something has to be done; government assistance is required. Switching to electric means spending a lot of money.

Kiloutou’s CEO, Olivier Colleau, who was also present at the forum, made no secret of the difficulties: “Electric machines can cost up to three times as much as traditional machines because batteries cost more.” To complete this shift, the industry needs assistance now.

This issue persists because, even with the investments made in electric machinery, off-highway vehicle batteries are still roughly twice as expensive as those used in automotive applications. This is partly due to the need for additional protections and design work, as well as the fact that the volumes are still lower.

And it’s evident that rental businesses are bearing the greatest brunt of the change—their clients are requesting low-carbon equipment. Naturally, this also gives rental companies a unique chance to expand their clientele and boost rental penetration at the same time.

But there is a hefty price for it. The discussion of public subsidies is unlikely to end anytime soon.

3) OEMs find it difficult to go past ICEs.
The construction sector has set out on a voyage without fully understanding where it will lead, save for the knowledge that it will involve lower carbon emissions, as was clearly evident at Intermat.

Construction Briefing was informed by a large manufacturer that specialises in light and compact equipment that it is now investigating four distinct scenarios involving hydrogen fuel cells and hydrogen combustion. It is unclear at this time which solution (or combinations of solutions) would be most effective. A work in progress…

Yanmar Construction Equipment, another expert in compact construction, brought up the point that the industry needs completely new all-electric platforms for their machines, not just batteries installed where engines once were. It means that until ICE, OEMs will be using two different platforms.

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