Construction in Brazil is becoming a bigger industry than ever before as the nation undergoes a major infrastructure makeover. In today’s competitive world, on-time delivery of high-quality commercial and residential buildings is crucial if construction companies want to increase customer satisfaction and differentiate themselves from their competitors. Aside from an efficient workforce, the best way to meet these aims is by using the best construction equipment possible.
It stands to reason then that the Construction Equipment Market in Brazil is at an all-time high and set to continue growing at a CAGR of 15.12 percent for the 2012-2016 period.
Aside from the rapid increase of construction in Brazil and the need to reduce the start-to-finish times of projects, other drivers and relevant trends for the market include:
- Steady Replacement of Older Construction Equipment
- Increase in Adoption of Construction Equipment on a Rental Basis
- Increase in Fleet Tracking System Subscriptions
Despite these strong drivers and promising trends, it won’t necessarily be easy for equipment vendors to capitalize on the boom of construction in Brazil. As is the case in any highly competitive industry with a lot of profit potential, many vendors are struggling with a lack of effective product differentiation, while also dealing with the threat of foreign vendors infiltrating the domestic market.
One of the biggest keys to overcoming both of these challenges will be through mergers and acquisitions. Lately, many large and international vendors are acquiring small and local vendors. For instance in 2011, Caterpillar acquired Bucyrus International; just one year later, Sany Heavy Industry acquired Putzmeister Holding. Such alliances are highly advantageous in that they enhance the market reach and product portfolio of both parties involved.
In addition to mergers and acquisitions, others are sharpening their competitive edge by optimizing their manufacturing locations. Vendors who set up their manufacturing plants close to their primary customers, have a distinct advantage as the close proximity helps them improve their visibility and market presence. Deploying these types of strategic moves is critical for market success.
Ultimately, construction in Brazil shows no signs of slowing down which means that the nation’s Construction Equipment Market will only gain more speed in the coming years. Vendors don’t have to worry about demand for their products and services, since that’s already taken care of. The challenge will be ensuring that it’s their companies that end-users turn to for their construction equipment needs.
For more information, view our 2012-2016 report on the Construction Equipment Market in Brazil.
