China is a paving the way for new a wave of infrastructural developments- A cue to infrastructure companies.

China has hammered out many deals in infrastructure in the 2013. It is looking for investment returns outside of China and has been very successful in increasing trade relations and investments in emerging economies. They plan to double their trade in Central and Eastern Europe in the next five years. They have a long term strategy in African continent to enhance their trade. They have also steadily increased their trade relations with Latam and the countries are in willing to co-operate for better relation and infrastructure developments. Apparently these are the next emerging business hotspots.

Chinese are pioneering the technologies of rail system and have been successful to sell it countries that are in need of rail infrastructure. Their most recent projects include connecting Mombasa to Nairobi in Africa, China will also help build the rail line between Serbia and Hungary, in Romania Chinese will also help build a high speed rail system. China has loaned USD 10 billion to develop new metro and rail systems in Argentina. The dragon country has bagged road projects in Serbia, Tanzania and it actively seeks to create a stronger and economically lucrative belt among the Central and Eastern Europeans countries. In 2013 it has signed deals worth USD 50-USD 70 billion in that region.

China has actively taken up projects in the energy sector as well. It will build some USD 1.3 billion Zungeru Power Plant in Nigeria, they are also building power plants in Morocco, investing USD 2.1 billion in Zimbabwe to develop solar power. Chinese companies are developing solar plants in Chile. China will construct dams in Argentina valued at around USD 4 billion; they will also invest to develop oil wells in Venezuela.

China has not shied away from the telecom sector amidst the transportation and energy deals. Although the investments in this sector have not made heads turn, nevertheless the interest in these geographies remained steady. Ethiopia has signed an USD 800 million deal with Chinese telecom giant ZTE to expand its mobile phone network.

Infrastructure companies may have to look at China’s advances to align their market sector and geographic spread. Slowly but steadily China will create new opportunities for business, understandably Chinese companies are benefitting from the present developments. China has set the wheel of infrastructure rolling in these geographies. These countries could be strategic game changers for the players to build the next level of developments and also establish themselves as major players in their respective sectors. Some of these countries are looking at China to make investments and fund projects. However challenges are abound including: geopolitical, demographic and financial markets. How each of the players adapts to these challenges depends on strategies that they adopt. One thing is clear that opportunities for businesses are rising and China has already tapped the markets.

Commercial vehicle manufacturers and construction equipment manufacturers can look at new developments in the markets to increase opportunities

Investment in infrastructure is an ongoing process. According Mckinsey report, global infrastructure will demand USD 57 trillion in investment by 2030. This includes all road, rail, air, sea transport along with investment in energy, telecom and building construction. Looking more closely we can relate all the infrastructure projects involve requirements for commercial vehicles and construction equipment manufacturers. This determines the need of the market and also suggests the future growth prospects for this sector. While the market is very lucrative the competition to stay ahead in the race is also very tight. Local manufacturers will have an edge to sell their products to the new infrastructure projects. However due to serious demand for more advanced and futuristic infrastructure developments from the new and upcoming economies, the specialized knowledge required to cater to the fast moving societies is also getting more popular. This is where planning consortiums come to play a very important role. They will be at the forefront in advising many municipalities and government agencies on new infrastructure developments like urban planning, airports, rail/ road connectivity between cities and countries, energy and communications.

How commercial and construction equipment manufacturers can create an eco-system to lead their market segment:
 Most of the projects where the constructions are awarded are completely funded by the governmental agencies or are on Public private partnerships, few come from private players. There are new trends arising wherein the government agencies are hiring private companies (eg Arup, Balfour Betty) to offer solutions to implement certain vital projects that can change the economic situation to benefit the city/town and in some cases even countries. These private consulting consortiums provide options and give possible solutions to make projects viable. At the same time these companies also take up construction, implementation and maintenance contracts. Vehicle manufacturers/construction equipment manufacturers can create a eco-system by entering into alliances, contracts, acquiring stakes, investment into such companies. This will give them an opportunity to understand the present demand and also future trends in the infrastructure market. They can also influence the construction suppliers to these projects to increase their market share.

Benefits of the eco-system:
Creating a mutual eco-system has many benefits to the companies and the society. Since the parties involved have high stakes in the projects the quality and standard of equipment and vehicles needed are clearly identified. Equipment and vehicle manufacturers can easily make their products available in the market. Also in case of air, sea and road transportation depending on the projects the consortiums are taking up, the new trends and the new needs for the transportations are easily identified leading to new product offerings to end customers. While the dynamics of transportation and construction industry are fast changing this may be an easier option to spot new changes in the market.

Changing the landscape of the business and creating opportunities:
Since this system is mutually beneficial to all the players in the infrastructure business, it creates new landscape for business players. The cost of inquiry is greatly reduced (in case of procurement) and costs of bringing new products in the markets are also minimized. The costs of selling and marketing are also reduced. New needs and requirements are easily identified for the construction and transportation segments. This type of ecosystem creates new opportunities for manufacturers and it changes the way business in conducted on a larger perspective. Finally the society is benefited from reduced costs and effective functioning of the larger projects.