The construction machinery market in 2025 is anticipated to experience steady growth in the second half of the year, driven by declining global interest rates and increased public investment. Concurrently, the ongoing shortage of labor at construction sites has spurred strong demand for ICT-enabled construction equipment and remote operation technologies. Additionally, the development of electrification technologies to achieve carbon neutrality (net-zero greenhouse gas emissions) has become an essential focus. Japanese media recently interviewed executives from three leading construction machinery manufacturers.
A: "In the North American market, there is currently a sense of oversupply for rental purposes, and energy-related demand remains stagnant. However, with the new administration's expected changes in energy policy, recovery is anticipated. A key concern is tariffs. While cross-supply of parts can mitigate tariffs on construction machinery components, retaliatory tariffs on large-scale mining excavators manufactured in North America and exported could have a significant impact. Most models not produced in North America are exported from Japan, and even if tariffs are imposed, it would be challenging to shift production to North America due to capacity constraints."
A: "While the growth of the electrification market is still distant, our immediate focus will be on improving fuel efficiency and operational efficiency of existing machinery. Hybrid excavators, which offer the advantage of in-house production of critical components, will see expanded deployment in the North American and Indonesian markets."
-Development of ICT Construction Machinery and Remote Operation
"Remote operation is gradually establishing itself as a viable market segment. In December 2024, ICT Construction Machinery introduced a new generation of 20-ton hydraulic excavators equipped with standard 3D mechanical guidance systems. As the prices of construction machinery continue to rise annually, it has become increasingly challenging for customers to accept these higher costs. To address this, adding value through advanced technologies such as ICT-enabled machinery and unmanned operations has become essential. The after-sales market, including parts replacement and maintenance services, is expected to expand further. Given the high profit margins in this sector, increasing sales volume will significantly enhance overall profitability."
-Hitachi Construction Machinery President Masafumi Senzaki on Investment Strategies with Trading Companies
-Forecast for the US Market in 2025
"The US market is anticipated to recover in the first half of 2025. It is unrealistic to expect local rental stores to refrain from purchasing construction machinery for an extended period. We anticipate that the new Trump administration will implement substantial economic measures, ensuring construction volumes remain stable, which is a positive factor for the industry."
-Collaborations with Trading Companies in North America and South America
"We have established partnerships with Itochu Corporation in North America and Marubeni Corporation in South America. Customer demand for construction machinery varies by region. Leveraging the extensive networks of trading companies allows us to reach end-users more efficiently. In North America, trading companies excel in providing financial services to retail and rental stores. In South America, where mining machinery demand is rapidly growing, the vast region requires significant investment in related technologies, particularly for dump trucks. Given the limited number of Portuguese-speaking personnel at Hitachi Construction Machinery, we plan to invest in relevant technologies and seek their assistance."
-Efforts Toward Electrification of Construction Machinery
-Increasing Demand for Electrification of Mining Machinery
"In contrast to general construction machinery, there is an immediate demand for electric products in the mining sector. While we hold the highest market share in wired hydraulic excavators, cables can pose challenges in dynamic mining environments. On the other hand, equipping dump trucks with additional batteries increases weight and reduces payload capacity. Zambia is currently conducting operational trials of super-large all-electric dump trucks, but verifying their practicality for integration into mining sites will require further time and testing."
Q: What is your outlook on market trends in 2025?
-Regarding potential tariffs on construction machinery produced outside the U.S. under the Trump administration:
"In the U.S., the adoption of electric construction machinery is likely to be limited to specific regions like California, where environmental regulations are stringent. The broader impact on the market is expected to be relatively modest. What is crucial is that electrification can revolutionize fundamental control structures and operational methods. Electric actuators enable millimeter-precision control through 3D guidance systems, significantly enhancing the accuracy of autonomous operations and ICT-enabled construction. They also demonstrate high compatibility with 3D CAD systems."
"Currently, electric excavators use actuators with insufficient horsepower, limiting their application to mini excavators. However, we anticipate the development of high-horsepower engines in the future, which will expand the possibilities for medium and large excavators. High-power motors and related components are being developed by Kobe Steel and its affiliates, and we plan to leverage these advancements."
-What is the sales expansion strategy for the remote operation system "K-DIVE"?
"Starting in 2025, we will conduct field trials at actual civil engineering sites to assess ease of use and improve operational precision. Our goal is to increase the number of successful on-site applications. Customer adoption depends on demonstrating practical value, especially given the current labor shortage. To enhance visibility and promote adoption, we will collaborate with various projects under the Ministry of Land, Infrastructure, Transport, and Tourism."
