Strategic Evaluation and Forecast of the Southeast Asian Second-hand Construction Equipment Market

Strategic Evaluation and Forecast of the Southeast Asian Second-hand Construction Equipment Market

In 2022, the market size of the Southeast Asian second-hand construction equipment was valued at $1.01 billion, and it is expected to reach $1.47 billion by 2029, with a compound annual growth rate (CAGR) of 5.48% from 2022 to 2029.

The research report on the Southeast Asian second-hand construction equipment market includes the following sections:

- Earthmoving Equipment: Excavators, backhoe loaders, motor graders and other earthmoving equipment (other loaders, bulldozers, trenchers).

- Material Handling Equipment: Cranes, forklifts, telescopic handlers, aerial work platforms (articulated boom lifts, telescopic boom lifts, scissor lifts).

- Road Construction Equipment: Rollers and asphalt pavers.

- End Users: Construction, manufacturing, mining, etc.

- Geography: Indonesia, Thailand, the Philippines, Malaysia, Singapore, Vietnam and others (Laos, Cambodia, Brunei, Myanmar) .

Market Insights

In 2022, the market size of the Southeast Asian second-hand construction equipment was valued at $1.01 billion, and it is expected to reach $1.47 billion by 2029, with a CAGR of 5.48% from 2022 to 2029. The government's investment in the construction of public infrastructure such as roads, airports, ports and energy sectors is expected to bring strong growth to the region's second-hand construction equipment market.

It is expected that the Southeast Asian second-hand construction equipment market will reach 64,378 units by 2029. Countries like the Philippines and Vietnam are expected to experience significant urbanization and total population growth, which will drive the demand for infrastructure construction in these countries. The governments in this region have already introduced a number of plans to help these countries recover from the impact of COVID-19, mainly focusing on infrastructure construction and increasing government spending. The investment in renewable energy projects has increased across the entire region. Countries such as Singapore, Indonesia and the Philippines are all committed to increasing renewable energy projects. Some Southeast Asian countries like Laos, Brunei and Myanmar experienced a slow economic recovery in 2021. However, the government's investment in infrastructure projects related to healthcare, renewable energy and the housing sector is expected to promote economic activities that support the second-hand construction equipment industry in the region during the forecast period.

Key Highlights

- Earthmoving machinery accounts for the largest share in the Southeast Asian second-hand construction equipment market. In 2022, excavators had the largest market share in the field of earthmoving machinery.

- Due to the increase in public infrastructure projects such as railway track extensions, airport construction, bridge and highway renovations in Southeast Asian countries, the demand for excavators in the Southeast Asian second-hand construction equipment market is expected to grow in 2022.

- Due to the increase in public infrastructure projects such as railway track extensions, airport and bridge and highway renovations in Southeast Asian countries in 2022, the demand for hydraulic excavators in the Southeast Asian second-hand construction equipment market is growing. Multiple road construction and affordable housing projects are underway in different countries in the region.

- The growth of the logistics industry has supported the demand for second-hand forklifts and telescopic handlers in the Southeast Asian market due to the growing demand for goods in the global and domestic markets. The exports of major Southeast Asian countries such as Indonesia, Thailand and Singapore increased significantly in 2022. The growing demand for goods and the use of automation technologies in the manufacturing industry will support the growth of the logistics industry in Southeast Asian countries in 2022.

- Due to the rising prices of commodities such as copper, tin, iron ore and nickel in the global market, the mining industry in the Indonesian and Philippine markets has grown, resulting in a surge in nickel mining projects in the region in 2022. Due to the rising price of coal in the global market, the Indonesian government is also investing in coal mining projects.

Market Trends and Driving Factors

Surge in Financing for Second-hand Construction Equipment

In 2021, the governments of Southeast Asian countries planned to invest in infrastructure development projects to overcome the negative impact of the pandemic. Infrastructure projects were postponed as contractors and construction companies faced financial challenges. Facing financial challenges, original equipment manufacturers such as Komatsu, Caterpillar, SANY and Hitachi Construction Machinery provided financial assistance to customers. In 2022, the second-hand equipment financing activities of original equipment manufacturers in Southeast Asian countries surged. Some second-hand construction equipment sellers, such as JLG Finance and Bot Leasing, provided equipment financing services for second-hand equipment buyers.

Increase in Urbanization and Infrastructure Development Projects Driving Construction Investment

Among Southeast Asian countries, Singapore has the most developed economy and is fully urbanized. Malaysia and Brunei are classified as highly urbanized, while most countries (including Indonesia, Thailand, the Philippines, Laos, Myanmar and Vietnam) are regarded as semi-urbanized. In the past few years, the urban population in the Philippines has grown faster than that in rural areas, mainly due to internal migration brought about by economic development in urban centers. According to the data provided by the Philippine Department of Finance in 2021, of the infrastructure projects worth $20 billion, about $9.7 billion were under construction in 2022. Other Southeast Asian countries such as Thailand, Malaysia and Vietnam are also promoting similar infrastructure and urbanization projects. For example, the Indonesian government planned to invest $430 billion in infrastructure development projects from 2021 to 2024. Most of the country's infrastructure development projects are in the transportation field. The investment projects are divided into three areas - highway, railway and port development, accounting for 29%, 22% and 23% respectively.

Southeast Asian Governments Accelerate Renewable Energy Investment

As global environmental problems become increasingly serious, the governments of Southeast Asian countries plan to increase their renewable energy generation capacity by 2030 to reduce their dependence on fossil fuels. For example, Singapore's grid-connected installed capacity rose to 376.9 MWp in 2020, with a total of 4,067 solar photovoltaic systems installed. Compared with 2019, this figure increased significantly. At that time, the capacity was 262.4 MWp, and only 3,173 photovoltaic systems were installed. In Malaysia, the government is investing $12.1 billion in the clean energy transition and plans to reduce carbon emissions by 60% by 2035. Due to Singapore's ambitious plan to produce 2 GW of solar energy by 2030, the demand for second-hand construction equipment is expected to increase. The government has launched the SolarNova program and research and development programs to increase solar energy production and achieve this goal.

Industry Constraints

The growth of the rental market restricts the sales of second-hand construction equipment in Southeast Asian countries. Southeast Asia (including Indonesia, Malaysia, Thailand, Vietnam, Singapore and Cambodia) is a promising region for the rental industry. The prospects of large infrastructure projects and the changes in labor dynamics give reasons to believe that the rental model will be adopted more and more. There are many small rental companies in Thailand, and the rental market has been growing in recent years. Some of the major construction equipment rental companies in Southeast Asian countries include Sin Heng Heavy Machinery Limited (Singapore), Aktio Co (Indonesia) Ltd., UMW, Nishio Rental (Singapore), Tat Hong (Singapore), Superkrane Equipment (Indonesia), Rent (Thailand) Co Ltd., Kanamoto Co., Ltd. (Malaysia), Guzent (the Philippines), Hillcon (Indonesia). Rental companies in this region are increasing the productivity of assets through digital innovation, such as the Internet of Things and telematics for equipment tracking and expanding coverage of new industries through new product lines, thus adding value to rental services.

The rising prices of building materials hinder the sales of second-hand construction equipment. In 2022, the prices of steel in Southeast Asian countries soared. The prices of building materials including steel increased by 30 - 40% in 2022, pushing up the overall prices of real estate projects in the country. In 2022, the prices of other building materials in the Southeast Asian market, such as asphalt, increased by 5 - 7%, and the prices of cement increased by 3 - 5%. In addition, the prices of construction projects increased by 30% to 35% in 2022, hindering the completion deadlines of projects. Due to the decline in profit margins caused by the rising prices of raw materials, some contractors were forced to stop construction projects. Hoa Phat Hung Yen Steel Co Ltd, Vietnam's leading steel supplier, announced an increase in steel prices in March 2022. Moreover, the prices of steel in the region had tripled before March 2022. In 2022, the prices of building materials such as sand, marble, cement and bricks also increased.

Supplier Landscape

- The well-known suppliers in the Southeast Asian second-hand construction equipment market include Caterpillar, Volvo Construction Equipment, Liebherr, Komatsu, JCB, Hitachi Construction Machinery, Kubota, Kobe Steel, SANY and XCMG.

- Other well-known suppliers include Yanmar, LiuGong, Sumitomo and Hyundai Construction Equipment.

- The leaders in the Southeast Asian second-hand construction equipment market are Komatsu, SANY, Volvo Construction Equipment, Hitachi Construction Equipment and Caterpillar. These suppliers have a strong market share and offer a diverse range of products in the Southeast Asian market.

- Yanmar, LiuGong and Sumitomo are niche market participants in the Southeast Asian second-hand construction equipment market, offering a limited range of products, mainly meeting the needs of customers who require earthmoving equipment.

- Zoomlion will launch a new 186-foot telescopic boom lift in the Southeast Asian second-hand construction equipment market in 2022.