LATEST TRENDS

Riccardo VIAGGISecretary General

IN THE CONSTRUCTION

EQUIPMENT

Recent market trends &

economic conditions

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Construction Equipment in figures

The fundamentals

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Construction Equipment in figures

An integrated & international sector

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Construction Equipment in figures

A sector of SMEs

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Performances & trends in numbers

Very positive results and outlook

2016 + 10% sales

Best results since 2011

Market worth 2/3 than pre-crisis levels

Building equipment stronger than earthmoving

Very positive results and outlook

Performances & trends in numbers

France & Russia = strongest growth

DE-UK-Nordic =close to pre-crisis levels

South EU = low growth

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Shares of construction equipment sales in European countries, 1st half of 2017

CECE Business Climate Index

Index = sum of 1) evaluation of the current business situation and 2) turnover expectation

Source: CECE Business Barometer July 2017 9

We consider our current business to be …

Current business situation exhibits a very positive picture, though manufacturers are not as euphoric anymore.

Source: CECE Business Barometer July 2017 10

Construction- Climbing out of a recession

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Performance of the construction sector

Eurostat monthly bulletins on construction

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Positive 2016 +3.9% construction activity Boost by new construction Low civil engineering

March 2017 monthly comparison -1.1% Infrastructure +1.1% Building -1.7%

March 2017 yearly comparison +3.6%Infrastructure +6.8% Building + 2.7%

Reengineering construction equipment

(McKinsey&Co.)

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• Acceleration of growth

• Higher profitability

Emerging markets catching up on technology

Trends for the future

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• Differentiate the offer, rather then compete on price

• Marry their deep machine know-how with insights into the customer’s specific operations

Have to:

To be competitive, European OEMs

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• Deep understanding of customers’ business

• A leading position in technology

To reach the goal, European OEMs need

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Digitisation of machinery &

construction

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Construction industry is among the least digitized

According to McKinsey

McKinsey & Co. 18

Cost/schedule overruns affect our sector

McKinsey & Co. 19

Productivity has declined in some markets

McKinsey & Co. 20

Five ideas to improve performance

Digital construction organisation

McKinsey & Co. 21

1. Higher-definition surveying and geolocation

2. Next-generation 5-D building information modeling

3. Digital collaboration and mobility

4. Internet of Things and advanced analytics

5. Future-proof design and construction

Autodesk AEC

An example:

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• Reduction of “geological surprises”

• Significative improvement in accuracy and speed

• Modern survey technology now more accessible

(Lidar + GPS = € 10.000)

• Small cameras mounted on a drone are faster

and cheaper than an helicopter

Rapid digital mapping and estimating

Higher-definition surveying and geolocation

McKinsey & Co. 23

• Real-time sharing of information

• Transparency and collaboration

• Timely progress and risk assessment

• Quality control

• Better and more reliable outcomes

Paperless projects: from the office to the workforce

Digital collaboration and mobility

McKinsey & Co. 24

• Equipment monitoring and repair

• Inventory management and ordering

• Quality assessment

• Energy efficiency

• Safety

Intelligent asset management and decision making

IoT and advanced analytics

McKinsey & Co. 25

An example from Komatsu Smart construction

IoT and advanced analytics

Komatsu Smart Construction

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An example from Komatsu Smart construction

IoT and advanced analytics

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Regulatory challenges

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• Mobile machinery sector lacks harmonised technical rules for road circulation within the EU

• The EU Commission will analyse the policy options for a new EU law to fill in this gap

Background

Road Circulation

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Road Circulation

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Technical requirements

Road Circulation

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• Industry task force now chaired by CECE working Construction CECE Agriculture CEMA Gardening EGMF Handling EMF Municipal EUnited

• E.g. braking, steering, lighting… but also tyre requirements(marking, solid tyres, foam filled and liquid ballast tyres, treadless tyres and steel wheels/tyres)

Introduction Timing – All engine categories

Emissions stage V- Regulation (EU) 2016/1628

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CI 0-8kW

CI 19-37kW 56-130kW 130-560kW

>560kWCI 37-56kW

Gen-Sets >560kW

CI 8-19kW

Scope of existing Directive 97/68/ECAdditional in Regulation (EU) 2016/1628

Emission Limits – Land based non-road mobile machinery

Limit values in line with US legislation

Limit values more stringent than US legislation

CI engines < 56kW & Engines >56kWemissions in g/kWh Stage CO NOx HC PM PN CO NOx HC PM PN ACI engines 0 - 8 kW variable & constant - - - - - - 8 0,4/0,6 - 1,1CI engines 8 - 19 kW variable & constant - - - - - - 6,6 0,4 - 1,1CI engines 19 - 37 kW variable & constant IIIA 5,5 0,6 - 5,0 0,015 1x1012

1,1

CI engines 37 - 56 kW variable IIIB 5,0 0,025 -constant IIIA 5,0 0,4 -

Engines 56 – 130 kW variable IV 5,0 0,4 0,19 0,025 - 5,0 0,4 0,19 0,015 1x1012 1,1

Engines 56-75 kW 5,0 0,4 -Engines 75 – 130 kW 5,0 0,3 -Engines 130 – 560 kW variable IV 3,5 0,4 0,19 0,025 -

constant IIIA 3,5 0,2 -Engines P > 560 kW variable & constant - Gen-Sets - - - - - - 3,5 0,67 0,19 0,035 -

variable & constant - others - - - - - - 3,5 3,5 0,19 0,045 -

4,7

constant IIIA

4,0

4,7

3,5 0,4 0,19

5,0

5,0 0,4 0,19 0,015 1,14,0

1x1012

0,015 1x1012 1,1

6,0

Directive 97/68

4,7 0,015 1x1012 1,1

New NRMM proposal

7,57,5

4,74,77,5

Emissions stage V- Regulation (EU) 2016/1628

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The 4 pillars approach

CO2 emissions non-road mobile machinery

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CO2 emissions non-road mobile machinery

CECE –CEMA CO2 brochure

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Contact details

BluePointBoulevard Auguste Reyers 80B-1030 Brussels (Belgium)

Tel.: +32 2 706 82 26Fax: +32 2 706 82 10E-mail: info@cece.eu

Follow us on Twitter@CECE_Europe

Riccardo Viaggi Secretary General