Indonesia Construction Equipment Market Report 2023
DUBLIN, Aug. 29, 2023 /PRNewswire/ -- The "Indonesia Construction Equipment Market - Strategic Assessment & Forecast 2023-2029" report has been added to ResearchAndMarkets.com's offering.
The Indonesia construction equipment market is expected to reach 40,137 units by 2029
The Indonesian government proposed a package worth USD 47.8 billion to offset the economic effect of the COVID-19 pandemic. Under the National Medium-Term Development Plan (2020-2024 RPJMN), the government plans to invest USD 412 billion in developing transport, industrial, energy, and housing infrastructure by 2024.
The surge in commodities prices in the global market has positively impacted the country's mining industry. The demand for nickel, tin, and coal rose in 2021, increasing nickel and coal mining projects. Therefore, the rise in infrastructure development projects and the growth of the mining industry due to the surge in demand for nickel, tin, and coal in the market are expected to drive the demand for construction equipment in Indonesia during the forecast period.
Earthmoving equipment accounted for the largest share of the Indonesia construction equipment market in 2022. Excavators in the earthmoving segment accounted for the largest share in 2022. Rising investment in public infrastructure and transport facilities is expected to drive demand for excavators in the Indonesian market.
In 2022, the Indonesian government increased the infrastructure development projects, including constructing airports, railways lines, roadways, highways & bridges across the country. The government invested USD 407 billion under Nation Strategic Plan; the fund was directed to 200 different PPP projects in 2022.
The demand for hydraulic excavators is growing due to the rise in public infrastructure projects, including the extension of railways tracks, airports & renovation of bridges & highways across Indonesia in 2022. Several road construction & housing projects are progressing in different countries in the Indonesian market in 2023.
MARKET TRENDS & DRIVERS
Government Investment in Public Infrastructure Projects Through PPP Model
The Indonesian government aims to invest USD 430 billion in infrastructure development projects from 2021 to 2024. There was a 20% rise in infrastructure investments from the last investment plan in 2015-2020.
The country's infrastructure development projects are mostly in the transport sector. Investment projects are divided into three sectors - road, rail, and port development, accounting for 29%, 22%, and 23%, respectively.
The Trans-Sumatra toll road project is one of the largest projects worth USD 33.7 billion and is in progress. China supports a key project - Jakarta-Bandung high-speed railways.
Growth in Metal Ore Will Drive Equipment Market
The mining industry will be one of the major contributors to Indonesian GDP in 2022. The industry accounted for nearly 5% in 2022. According to a report from the Central Statistics Agency (BPS), the mining industry witnessed a sharp growth in 2022; the industry's mineral export value reached USD 5.93 billion, a growth of 103% compared to 2021.
The iron ore industry recorded the largest growth among the mining and quarrying sub-sector, 25.78%, in 2022. Then the other mining sub-sector grew by 4.79%, and the lignite coal sub-sector grew by 3.64%.
Companies Focus on Digital Transformation to Tackle Chinese CompetitionThe level of competition among manufacturers in the Indonesia construction equipment market has grown due to a surge in demand for Chinese OEMs, which are available at lower prices & easy financing facilities.
Further, other OEMs in the country, such as Kobelco, Komatsu, Caterpillars, Hitachi, and Hyundai construction machinery, focus on continuous improvement in aftersales services, supported by digital technology.
Hitachi Construction Machinery launched the digital application of equipment performance monitoring and technical support system. The company also launches the spare parts e-commerce platform to enhance the customer experience.
Adoption of Electric & Hydrogen Fuel Technologies
There is a rise in environmental concern in the Indonesian market in 2022. Indonesian government aimed to achieve the goal of carbon neutrality by 2050. This triggered the need for electric construction machinery in the market in 2022. Increasing government focus on carbon emission reduction in 2021 supported the demand for electric construction equipment.
Major construction equipment manufacturers such as Volvo Construction Equipment, SDLG, and XCMG launched electric and compact mini excavators in the Indonesia construction equipment market to tackle the growing demand in the market.
A Surge in Fuel Prices Impacts Building Material Prices and Hampers the Construction Projects
In 2022, the Indonesian government increased the fuel and oil prices in the market. The increase in fuel prices is expected to affect other commodities, including housing and property sectors. A rise in fuel prices will affect building materials such as iron, cement, sand, steel & bricks.
According to Central Statistics Agency (BPS), diesel prices increased by 37.8%, cement rose by 8.5%, asphalt increased by 15.3%, & steel roof prices fell by 3.85% in 2022.
The cost of construction projects of buildings for roads, bridges, & ports increased by 9.6%, followed by the cost of electricity, gas, water & communication center installations rose by 5.6%. The construction cost of residential building projects also witnessed growth of 4.2% in 2022.
SANY, Kobelco, Komatsu, Caterpillar, & Hitachi Construction Machinery are leaders in the Indonesia construction equipment market. These companies have a strong market share and offer diverse sets of equipment.
Manitou, Kubota, Toyota Material Handling & Kubota are niche market players. These companies offer low product diversification and have a strong presence in Indonesia's local market.
Volvo Construction Equipment
Hitachi Construction Machinery
Xuzhou Construction Machinery Group Co. Ltd. (XCMG)
Zoomlion Heavy Industry Science & Technology Co. Ltd
Hyundai Construction Equipment
PT Indotruck Utama
PT. Airindo Sakti
PT. Sumitomo Construction Machinery
PT. Badak Prima Lestari
PT. United Equipment Indonesia
Other Prominent Vendors
Sumitomo Construction Machinery
Toyota Material Handling
Segmentation by Type
Other Earthmoving Equipment (Other loaders, Bulldozers, Trenchers)
Road Construction Equipment
Material Handling Equipment
Forklift & Telescopic Handlers
Aerial Platforms (Articulated Boom Lifts, Telescopic Boom lifts, Scissor lifts)
Other Construction Equipment
Concrete Pump Truck
Others (Power Generation, Utilities Municipal Corporations, Oil & Gas, Cargo Handling, Power Generation Plants, Waste Management)
For more information about this report visit https://www.researchandmarkets.com/r/kbq49m
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