Dublin, May 27, 2024 (GLOBE NEWSWIRE) -- The "Indonesia Construction Equipment Market - Strategic Assessment & Forecast 2024-2029" report has been added to ResearchAndMarkets.com's offering.
The Indonesian construction equipment market is expected to grow from 28,568 Units in 2023 to reach 36,510 Units by 2029, at a CAGR of 4.17% from 2023-2029.
Bolstered by the government's infrastructure ambitions and public-private partnerships, the market is increasingly driven by the expansion of public infrastructure projects and a keen focus on sustainability. This reflects a robust trajectory in the wake of global economic revitalization.
Increased Investment in Public Infrastructure Projects
- Association of Heavy Equipment Manufacturers of Indonesia (HINABI), the amount of heavy equipment used for the mining sector is 40% of the total production. There is a surge in the demand for nickel, tin, and coal due to the rise in industrial activities post-pandemic in 2023.
- Government funding facilitates this transition, boosting demand for new solar field projects. The White House highlighted that the private sector has committed USD 133 billion in clean energy investments, partly influenced by the Inflation Reduction Act.
- The government's goal is to achieve carbon neutrality by 2060. The government is increasing its focus on using renewable energy (by reducing the use of fossil fuels, promoting electric vehicles in the transportation sector, and using solar panels on buildings for electric generation).
KEY HIGHLIGHTS
- Earthmoving equipment accounted for the largest share of the Indonesia construction equipment market in 2023. The excavator in the earthmoving segment accounted for the largest share in 2023.
- Construction equipment utilization by the construction industry as an end-user had the largest Indonesia construction equipment market share in 2023. Furthermore, Indonesia's market for 4.5-ton excavators is the second largest after 20-ton class excavators in 2023.
- Indonesia prioritizes infrastructure in its National Medium-term Development Plan 2020-2024, allocating a significant $359.2 billion investment.
- There are some major distributors of construction equipment in the Indonesia construction equipment market, like PT Hexindo Adiperkasa, Intraco Penta, and Traktor Nusantara. Furthermore, United Tractors accounts for one of the most significant shares of the Indonesian market.
- The Indonesia construction equipment market OEMs are adopting electric and hydrogen fuel technology.
- Komatsu develops hydrogen fuel cell excavators with Toyota systems for Southeast Asian markets, including Indonesia.
- Volvo launched the ECR25 Electric compact excavator, L25 Electric compact wheel loader, and EC55 Electric mini excavator.
- Komatsu also launched HB365-1 hybrid excavators in the Indonesian market in 2023.
SEGMENTATION ANALYSIS
Segmentation by Type
- Earthmoving Equipment
- Excavator
- Backhoe Loaders
- Wheeled Loaders
- Other Earthmoving Equipment (Other loaders, Bulldozers, Trenchers)
- Road Construction Equipment
- Road Rollers
- Asphalt Pavers
- Material Handling Equipment
- Crane
- Forklift & Telescopic Handlers
- Aerial Platforms (Articulated Boom Lifts, Telescopic Boom lifts, Scissor lifts)
- Other Construction Equipment
- Dumper
- Tipper
- Concrete Mixer
- Concrete Pump Truck
- End Users
- Construction
- Mining
- Manufacturing
- Others (Power Generation, Utilities Municipal Corporations, Oil & Gas, Cargo Handling, Power Generation Plants, Waste Management)
MARKET TRENDS & DRIVERS
Intense Rivalry Between Chinese and Other OEMs in the Indonesian Market
- The level of competition among manufacturers in the Indonesian construction equipment market has grown due to the surge in demand for cheaper Chinese OEMs, which have easy financing facilities.
- In 2022, Chinese manufacturer SANY controlled nearly 21% of the market share in the excavator segment of the Indonesian construction equipment market. Chinese manufacturers provide cheap equipment at around 20% lower prices than their Japanese rivals.
- China is investing heavily in various infrastructure development projects in the Indonesian market. For instance, over 500 units of SANY equipment are used to construct high-speed railway projects between Jakarta and the City of Bandung, which are in progress in 2023.
- Other OEMs in the Indonesia construction equipment industry, such as Kobelco, Komatsu, Caterpillar, Hitachi, and Hyundai Construction Machinery, are increasingly focusing on continuous improvement in aftersales services supported by digital technology.
Adoption of Electric & Hydrogen Fuel Technologies
Concerns over environmental issues led the Indonesian government to aim for carbon neutrality by 2060. This triggered the need for electric construction machinery in the Indonesian construction equipment market. The increasing government focus on carbon emissions reductions in 2021 further supported the demand for electric construction equipment. Major construction manufacturers such as Volvo Construction Equipment, SDLG, and XCMG launched electric and compact mini excavators in Indonesia to tackle the growing industry demand. Furthermore, in 2021, Volvo Construction Equipment launched the EC55D compact excavators in Indonesia for smart city projects.
Government Investments in Public Infrastructure Projects Through the PPP Model
- In 2023, the government invested in 83 PPP projects for infrastructure development, including 50 projects in the transportation sector, including 13 ports and 15 railway projects. Asian Development Bank provided a loan of USD 100 million to the Indonesian government to support these projects. In 2023, the Indonesian government planned 49 projects, 33 Public Private Partnership Projects (PPP), and 16 non-PPP projects.
- These 33 PPP projects include 18 in the road sector, 4 in the telecommunication sector, 1 in the electricity sector, 6 in the water supply sector, 3 in the transportation sector, and 1 in the energy conservation sector.
Investment in Transport Sector Projects Under the National Strategic Plan
- In 2022, the country's government introduced National Strategic Projects in Indonesia. The projects are focused on increasing the region's economic growth, improving community welfare, and increasing regional development.
- Over 200 national strategic projects, worth nearly USD 500 billion, range from toll road development and new airport construction to broadband enhancement coverage.
- The 200 projects consist of 56 roads, 57 dams, 11 railways, 16 railways, 15 energy, 16 ports, 12 water and sanitation, two housing estates, eight airports, nine irrigations, one project in the education sector, one project in the coastal embankment, and one project for digital technology.
MARKET RESTRAINTS
Surge in Building Material Prices Hampers Construction Projects
- In 2023, the country's government increased fuel and oil prices. The increase in fuel prices is expected to affect other commodities, including housing and property sectors. It will also affect building materials such as iron, cement, sand, steel, and bricks.
- According to the Central Statistics Agency (BPS), 2023, diesel prices increased by 37.8%, cement rose by 8.5%, asphalt increased by 15.3%, and steel roof prices fell by 3.85%.
- The cost of construction projects of buildings for roads, bridges, and ports increased by 9.6%; the cost of electricity, gas, water, and communication center installations rose by 5.6%.
Skilled Labor Shortage Hampering the Industry's Growth
- Indonesia faced a shortage of skilled labor in 2023. To achieve economic growth in the manufacturing, infrastructure, and agribusiness sectors, the country needs 113 million skilled workers by 2030.
- The country depends on foreign labor from Bangladesh, Nepal, and India. The shortage of skilled labor triggered during COVID-19 in 2020 due to lockdowns further impacted the labor market and hampered the Indonesia construction equipment market growth.
- In 2022, Indonesia had the lowest rate of foreign participation in the labor market among Southeast Asian countries. Indonesia has a 0.7% participation of foreign labor, whereas the participation of foreign labor was higher in Malaysia (13%) and Singapore (35%).
VENDOR LANDSCAPE
Prominent Vendors
- Caterpillar
- Komatsu
- Volvo Construction Equipment
- Hitachi Construction Machinery
- Kubota
- SANY
- JCB
- Xuzhou Construction Machinery Group Co. Ltd. (XCMG)
- Kobelco
- Zoomlion Heavy Industry Science & Technology Co. Ltd
- Hyundai Construction Equipment
Other Prominent Vendors
- Liebherr
- LiuGong
- Yanmar
- Sumitomo Construction Machinery
- Takeuchi
- Toyota Material Handling
- Manitou
- Sakai Heavy Industries
- Kato Works Co.
- GEHL
- MERLO Group
- Bobcat
- Terex Corporation
- CNH Industrial
- Mecalac
- AIRMAN
- Shandong Lingong Construction Machinery (SDLG)
- Hidromek
- Rokbak
Distributor Profiles
- PT Indotruck Utama
- United Tractors
- Multicrane Perkasa
- PT. Airindo Sakti
- PT. Sumitomo Construction Machinery
- PT. Badak Prima Lestari
- PT. United Equipment Indonesia
- ALTRAK 1978
Key Attributes:
| Report Attribute | Details |
| No. of Pages | 219 |
| Forecast Period | 2023 - 2029 |
| Estimated Market Value in 2023 | 28568 Units |
| Forecasted Market Value by 2029 | 36510 Units |
| Compound Annual Growth Rate | 4.1% |
| Regions Covered | Indonesia |
For more information about this report visit https://www.researchandmarkets.com/r/6b58zh
About ResearchAndMarkets.com
ResearchAndMarkets.com is the world's leading source for international market research reports and market data. We provide you with the latest data on international and regional markets, key industries, the top companies, new products and the latest trends.
Attachment
