Price Pressure and Environmental Regulations as a Challenge for the European Special Welded Structures Industry.

What characterizes the year 2024 in the segment of special welded structures and complete assemblies, such as frames and booms? In other words, what was this year like in the “off-highway vehicles” sector – the market for excavators, loaders, bulldozers, spreaders, and other machinery used in construction, mining, or extraction industries? For better context, this sector generates approximately $15 billion in global annual revenue (source: maximizemarketsearch.com).

We are witnessing not only the traditional automotive industry but also this parallel sector — broadly defined as “off-highway vehicles” — facing tremendous pressure to cut costs, particularly by lowering component prices. This exerts significant strain on the entire supply and subcontracting chain.

Although in the past, the component market crisis impacted the sector, the “off-highway vehicles” segment managed to quietly raise prices — not by officially increasing price lists, but by reducing discounts and exploiting limited production capacities in Europe, which ultimately raised product prices. So even with fewer loaders, bulldozers, or stone crushers being manufactured, there was always a way to increase profits.

Today, however, competition from China, planned bans on internal combustion engines, the rise of electromobility, and the demand for carbon footprint reduction are intensifying price pressure from European manufacturers on their supply chains. Suppliers in the “off-highway vehicles” segment must now adapt to a new standard in which OEMs (Original Equipment Manufacturers) increasingly seek suppliers in Asia — even at the cost of increased political, logistical, and other risks.

Facts show that component production costs for “off-highway vehicles” in Asia (especially in India) are about 30 percent lower than in Europe, and in China, they may be up to 40 percent lower. Smaller steel frames and structures up to five tons can be shipped to Europe cost-effectively, while ongoing technological innovations aim to further improve manufacturing and logistics efficiency.