Machine Control Systems: The Next Frontier in Industrial Automation
Posted on 28th February 2025
At Volpi Capital, we see significant opportunities in the Machine Control Systems (MCS) market. With a projected growth from €6 billion in 2024 to €13 billion by 2034, the sector is expanding at a steady 8% CAGR . Much like other areas of industrial automation and smart mobility, MCS is poised for transformative growth driven by increasing regulatory requirements, sustainability concerns, and a critical need for efficiency in heavy equipment operations.
A Market Ripe for Digital Transformation
Despite the clear benefits of digitalisation, MCS penetration remains surprisingly low. Even among larger enterprises (with 250+ employees), only ~40% currently use MCS, leaving substantial room for adoption. Historically, high hardware costs and complex implementations have limited adoption, particularly for smaller construction firms. However, with newer, more hardware-agnostic, software-enabled solutions entering the market, adoption is accelerating, especially among compact machinery users who were previously underserved.
Accelerating MCS adoption is now being driven by:
- Increased compliance and safety – where digital documentation, precise grading, and automated machine guidance are becoming industry standards, MCS is reducing the need for on-site personnel, which enhances safety.
- Productivity gains – MCS can increase efficiency by 30-45%, reducing rework, minimising downtime, costly mistakes and time required for physical stake-outs.
- Labour shortages – skilled operators are in short supply and MCS solutions help bridge the gap by improving efficiency, and reducing reliance on manual skills.
- Sustainability mandates – MCS reduces fuel consumption and emissions by optimising machine usage, cutting material waste and improving accuracy.
- Infrastructure investment – large-scale infrastructure projects globally, including roads, tunnels, and smart cities, are increasing demand for machine automation.
Why Now? Untapped Potential and Market Consolidation
The MCS market remains fragmented, with a handful of dominant incumbents like Trimble, Topcon, and Leica Geosystems, alongside a growing number of software-driven challengers. Many of these challengers are founder-led businesses with strong regional presence and scalable technology but lack the resources to expand globally.
We see a clear opportunity to back a leading but nimble challenger that can scale internationally by focusing on:
- Software-enabled, hardware-agnostic solutions – we believe that the future of MCS is in software-led solutions, with hardware becoming increasingly commoditised. Companies that can integrate with existing hardware and have a more agnostic approach, stand to gain significant market share.
- Recurring revenue models – transitioning from one-off sales to subscription-based revenue streams will drive higher, more sustainable margins and increase business resilience.
- Geographic and vertical expansion – while MCS is most established in the construction industry, growth opportunities exist in mining, forestry, agriculture, and marine industries. Central and Western Europe, in particular, remain underpenetrated compared to the Nordics and North America.
The Volpi View
From our discussions with industry players, distributors and market experts, several clear trends are emerging:
- Faster adoption of MCS in compact machinery – the cost barrier for smaller machines is falling, increasing penetration in this segment.
- Shift toward automation and AI-driven MCS – machine automation is expanding beyond dozers and graders to excavators, where adoption is still low in Europe (reported below 10%).
- OEM pre-installations creating more software opportunities – more machine manufacturers are embedding MCS-ready hardware at the factory level, opening up software-driven business models.
- M&A activity accelerating – the market is consolidating, with recent acquisitions including Hemisphere (acquired by CNH), Prolec (acquired by Lifco) and Unicontrol (acquired by Spectra Precision).
With MCS adoption still in its relatively early stages, now is the time for a specialised Private Equity player such as Volpi to back the next-generation of fast-growing, software-centric challengers in this space, offering strategic investment support in both organic international growth and synergistic M&A opportunities.
We’d love to hear from you.
Whether you are an MCS provider looking to take advantage of these opportunities, or simply as excited about the future of machine control as we are, we welcome a conversation!
Please get in touch with Robert Kloszewski (robert@volpicapital.com), Erik Berggren (erik@volpicapital.com), and/or Tom Mears-Alcaide (tom@volpicapital.com).
