Plant costs are set to rise and European manufacturers face going out of business as a result of increasing environmental legislation.
That was the clear message from plant manufacturers exhibiting at Bauma last week.
Tighter European Commission legislation to be introduced at the start of 1999, will make it very difficult for small European manufacturers to compete with the industry big boys.
The planned regulations will require all new plant to meet much stricter standards on emissions and noise levels and brings European rules into line with those in the US.
The end result for the construction industry is more expensive plant. A JCB representative admitted that the increase in costs would be 'passed onto the end user'.
Many larger manufacturers, who used Bauma to launch their new green machines, believe that the new regulations will present considerable problems for Europe's smaller producers. Used to selling to niche markets where controls are more relaxed, they will have to upgrade their products to meet the new standards
This gives large manufacturers, already selling in markets with strict environmental standards, such as Germany and the US, a huge advantage. It is expected that many smaller firms will not survive.
Caterpillar chairman, Donald Fites believes 'it will be difficult for smaller producers to maintain standards' and this will lead to 'further consolidation in the industry.'
Manufacturers from outside the Western economies will also find it difficult. Chinese state owned manufacturer XCMG says that strict regulations are a major barrier to them entering the European market. The company's attention is currently focused on Eastern Europe.
South African articulated dump truck producer, Bell, says that it had to completely redesign its products to sell into western Europe.