CRI team visits Contech Vietnam 2023

Contech Vietnam 2023 Vietnam Construction Machinery Exhibition was held at the National Architecture and Planning Exhibition Hall in Hanoi, the capital of Vietnam, from April 21 to 24, 2023. More than 100 companies from all over the world participated in the exhibition.

Colleagues from CRI （元哲咨询） went to Vietnam from Shanghai, visited the exhibition, interviewed more than 20 exhibitors, and recorded videos, including Vietnamese local enterprises, Chinese-funded enterprises, and Malaysian enterprises and other projects in the South Vietnam market Machinery-related companies.

On April 23, 2023, the colleagues of Yuanzhe Consulting went to the site of Contech Vietnam 2023.

Our Staff interviewed and communicated with the heads of more than 20 construction machinery companies at the Contech 2023 exhibition site, including local Vietnamese companies and Chinese companies. Brands and talks about the future development prospects of Vietnam’s construction machinery industry.

Vietnam Construction Machinery Market Size

According to the forecast of CRI Report, with the growth of Vietnam’s economy and the acceleration of infrastructure construction, the market size of Vietnam’s construction machinery will reach about 9.4 billion US dollars in 2032, and the compound annual growth rate (CAGR) from 2023 to 2032 will reach as high as 18%.

According to the research conducted by CRI Team on exhibitors, most companies are optimistic about the development prospects of Vietnam’s construction machinery industry and plan to invest more human resources and capital in the Vietnamese market.

According to the analysis of CRI Report, Vietnam’s construction machinery industry started relatively late and did not start to develop until the 1980s. At that time, the Vietnamese government began to implement economic reform policies and introduced a large amount of foreign capital, including construction machinery manufacturing enterprises. With the rapid development of Vietnam’s economy in recent years, the construction of infrastructure, such as roads, bridges, and urban rail transit, has accelerated, and Vietnam’s construction machinery industry has also accelerated its development.

On the one hand, Vietnam has gradually become an important construction machinery consumer market. At the same time, due to the low cost of production factors such as human resources, land, and energy in Vietnam, more and more foreign-funded enterprises have entered Vietnam’s construction machinery industry and established machine assembly enterprises or construction machinery parts manufacturing enterprises. The products of these enterprises are not only sold in Vietnam, but also exported to all over the world.

Major Construction Machinery Enterprises in Vietnam

According to the analysis of CRI Report, the major enterprises in Vietnam’s construction machinery industry are as follows:

Vinacomin Machinery Company : Founded in 1993, it is a local Vietnamese company that mainly produces mining machinery and construction machinery.

Sao Mai Machinery Company : Founded in 1990, it is a local Vietnamese company that mainly produces construction machinery and mining machinery.

Doosan Vietnam Company : Founded in 2006, it is a subsidiary of South Korean Doosan Group in Vietnam, mainly producing heavy machinery and equipment.

Hitachi Construction Machinery Vietnam Company : Established in 2012, it is a subsidiary of the Japanese Hitachi Group in Vietnam, mainly producing excavators, bulldozers and other construction machinery.

Caterpillar Vietnam : Founded in 1994, it is a subsidiary of American Caterpillar in Vietnam. It mainly produces excavators, bulldozers and other construction machinery.

Import and Export Status of Vietnam construction machinery industry

According to the analysis of CRI Report, Vietnam’s construction machinery industry currently relies heavily on imports, and complete machines and parts are mainly imported from China, Japan, South Korea and other countries. However, according to Yuanzhe Consulting’s interviews with construction machinery companies in the Vietnamese market, more and more construction machinery companies plan to set up factories in Vietnam. Therefore, it is expected that in 2023-2032, the dependence of Vietnam’s construction machinery industry on imported products will gradually decrease. 

Research Report on Southeast Asia Construction Machinery Industry 2023-2032

Topics Covered

• Southeast Asia Construction Machinery Industry Status and Major Sources in 2018-2022
• What is the Impact of COVID-19 on Southeast Asia Construction Machinery Industry?
• Which Companies are the Major Players in Southeast Asia Construction Machinery Industry Market and What are their Competitive Benchmarks?
• Key Drivers and Market Opportunities in Southeast Asia Construction Machinery Industry
• What are the Key Drivers, Challenges, and Opportunities for Southeast Asia Construction Machinery Industry during 2023-2032?
• What is the Expected Revenue of Southeast Asia Construction Machinery Industry during 2023-2032?
• What are the Strategies Adopted by the Key Players in the Market to Increase Their Market Share in the Industry?
• What are the Competitive Advantages of the Major Players in Southeast Asia Construction Machinery Industry Market?
• Which Segment of Southeast Asia Construction Machinery Industry is Expected to Dominate the Market in 2032?
• What are the Major Adverse Factors Facing Southeast Asia Construction Machinery Industry?

Full Report: Research Report on Southeast Asia Construction Machinery Industry 2023-2032

The post CRI Insights on Contech Vietnam 2023 and Construction Machinery Industry Trend in Vietnam first appeared on CRI Report.

In 2018, the Chinese construction equipment market performed well, with the production and sales of staple products growing rapidly. According to the data from relevant departments of the Chinese government, from Jan. to Nov. 2018, the sales volume of excavators in China totaled 187,393 units, increasing by 48.4% YOY; the sales volume of loaders totaled 109,000 units, increasing by 22.3% YOY. And other construction equipment such as compacting machinery and concrete machinery all saw growths in both sales and production.

Major Market Drivers

According to CRI’s “Research Report on China’s Construction Machinery Industry, 2018-2022″, the major drivers of the fast growth include:

 (i) Increasing infrastructure investment in China: To sustain economic growth, China’s central and local governments invest heavily in infrastructure such as high-speed railways, subways and public facilities. For example, in 2018, China invested CNY 732 billion (USD 107.6 billion) in fixed assets to build 4,000 kilometers of railways including 3,500 kilometers of high-speed railways, setting a new record in high-speed railway construction. It is expected that from 2019 to 2025, China’s annual investment in railways will be no less than CNY 110 billion. By Jan. 2019, urban rail transit facilities (subways and light railways) are being built or planned for over 40 Chinese cities. CRI estimated that from 2019 to 2025, China’s annual investment in urban rail transportation projects will exceed USD 50 billion. Both railway construction and urban rail transportation will need construction equipment of more than USD 8 billion during this period. And road construction, municipal works and real estate projects will have even greater demand for construction equipment;

 (ii) Replacement of construction equipment: According to CRI’s “
Research Report on China’s Construction Machinery Industry, 2018-2022 ”, by the end of 2018, the quantity of construction equipment in China had exceeded 5 million units. On the assumption that the replacement rate is 10%, more than 500,000 units need to be replaced every year; and

 (iii) Growing export markets: According to China Customs, China’s excavator exports totaled about 19,000 units in 2018, up by about 98% YOY; China’s loader exports totaled about 21,000 units from Jan. to Nov. 2018, up by about 21% YOY. And the export volume of other construction equipment all attained growth. The growth of China’s construction equipment exports in 2018 was driven by Chinese construction equipment’s price advantage on the international market and the Belt and Road initiative.

Global Uncertainties

 (i) Brexit

According to CRI’s “ Research Report on China’s Construction Machinery Industry, 2018-2022 ”, in 2017, the sales revenue of China’s construction equipment industry totaled about USD 82 billion, of which about USD 20.1 billion, or 1/4, came from exports. Evidently, the export markets are vital to China’s construction equipment industry. In 2017, China’s construction equipment exports to the E.U. amounted to USD 2,389 million, registering a YOY increase of 25.51% and accounting for 11.9% of the total value of China’s construction equipment exports. If Brexit causes economic fluctuations to the U.K. and the E.U., it will inevitably have an adverse impact on the export of Chinese construction equipment.

 (ii) Sino-U.S. trade war

In 2017, China’s construction equipment exports to the U.S. amounted to USD 2,772 million, accounting for 13.8% of the total value of China’s construction equipment exports. With the outbreak of the Sino-U.S. trade war, the U.S. government is increasingly likely to raise the tariffs on Chinese construction equipment because some of the products are closely related to the Made in China 2025 program. If the trade war continues, a considerable part of China’s construction equipment exports to the U.S. will face higher tariffs, which will result in a sharp decline in China’s construction equipment exports to North America in 2019.

 (iii) Industrial transfer

According to CRI’s “Research Report on China’s Construction Machinery Industry, 2018-2022 ”, some construction equipment manufacturers in China are very likely to gradually move their factories to Southeast Asian countries such as Vietnam to avoid additional tariffs if the trade war continues. It is obvious that large-scale industrial transfer will weaken the strength of China’s construction equipment industry.

the Belt and Road Opportunities

(1) Progress of and construction investment boosted by the Belt and Road initiative

As the data about China’s construction equipment exports in 2018 has not been announced, CRI’s “Research Report on China’s Construction Machinery Industry, 2018-2022” is based on the data in 2017. As is known to all, the major sources of investment in Belt and Road projects are China’s state-owned enterprises. Therefore, infrastructure projects under the Belt and Road initiative prefer Chinese construction enterprises and Chinese construction equipment. In 2017, Chinese enterprises signed 7,217 contracts on contracting projects in 61 Belt and Road countries. The contract amount totaled USD 144.32 billion, registering a YOY growth of 14.5% and a CAGR of 24.8% from 2015 to 2017. The contract revenue reached USD 85.53 billion, registering a YOY growth of 12.6% and a CAGR of 11.1% from 2015 to 2017. In 2017, China’s construction equipment exports to Belt and Road countries reached USD 8,765 million, increasing by 18.3% YOY and accounting for 43.6% of the total value of China’s construction equipment exports. It’s clear that the advancement of the Belt and Road initiative facilitates the export of Chinese construction equipment.

 (2) Marketing strategies of Chinese construction equipment manufacturers including OEMs in Belt and Road countries Belt and Road countries are increasingly important to Chinese construction equipment manufacturers including OEMs as China’s construction equipment exports to these countries keep rising.

CRI’s market survey shows that Chinese construction equipment manufacturers including OEMs adopt the following marketing strategies in Belt and Road countries:

• (i) establishing branches or offices to broaden the markets;
• (ii) cooperating with the Chinese construction enterprises that have contracted many projects in these countries to promote the sale of their goods;
• and (iii) acquiring local construction equipment factories or establishing new factories to localize production. For example, SANY Group has established factories in Turkey, Indonesia and Russia, and Zoomlion Heavy Industry Science & Technology Co., Ltd. has established factories in Italy, Germany and India.

About CRI

CRI is a research and consulting company focusing on various industries and markets.

CRI provides customized industry research services for initial public offerings, corporate mergers and acquisitions, business development, market launch and financing for clients varying from private companies to the government entities.

The information contained in the CRI Report was derived from data and intelligence collected from various sources which include but not limited to government and regulatory statistics, industry association reports and data and data obtained from interviews with manufacturers, distributors, experts and customers in related sectors.

The post 2019 China’s Construction Machinery Industry Prospect: Global Uncertainties as Well as Opportunities first appeared on CRI Report.

In terms of the sales volume of new machines in the construction machinery industry, with stable infrastructure investment and start-ups of real estate in 2016, the high growth of excavator sales was mainly driven by the machine updating in the infrastructure and real estate starts at the downstream. In 2017, since the investment on the real estate and infrastructure increased and PPP projects landed, China’s market demand for excavating machines achieved substantial growth. Meanwhile, company’s business indicators turned optimistic and the entire industry began to restore. In 2016, manufacturers such as Sany, Zoomlion, XCMG and Shantui experienced a diminished decline or even growth in the revenue at different levels.

Related report:  Research Report on China’s Construction Machinery Industry, 2018-2022

In 2017, the sales volume of excavators was 140,303 units, increasing by 99.5% YOY; the sales volume in the domestic market was 130,559 units, with an increase of 107.5% YOY; the export sales volume reached 9,672 units, with an increase of 32.0% YOY. The domestic market increased significantly. Other products such as cranes, bulldozers, and loaders, also followed the growth of excavator sales. In 2016, the sales volume of cranes was 9,455 sets, increasing by 2.60% YOY; the sales volume of bulldozers registered 4,061 sets, with an increase of 10.29% YOY; that of loaders reached 75,445 sets, increasing by 2.50% over the same period of last year. Driven by the rebound of excavators, the overall construction machinery industry warmed up from single products to sub-sectors.

By the end of 2017, the penetration of excavation machines was approximately 789,000 units in 6 years, 1.183 million units in 8 years, and 1.411 million units in 10 years. Among them, the six-year penetrations of large, medium and small excavators were respectively 119,000 units, 233,000 units, and 437,000 units. The eight-year penetrations of them were 185,000 units, 413,000 units and 586,000 units. The ten-year penetrations amounted to 221,000 units, 524,000 units and 666,000 units.

Related report:  Research Report on China’s Construction Machinery Industry, 2018-2022

In 2017, the sales volume of all kinds of construction machinery products achieved high growth. The sales of excavators reached 140,303 units, increasing by 99.5% YOY, of which 130,559 were sold in the domestic market, increasing by 107.5% YOY; the sales volume of loaders was 97,610 units, with an increase of 45% YOY; bulldozers were sold at 5,707 units, with an increase of 40.53%, including 3,437 units of 160 horsepower bulldozers, accounting for 60.22% of the total sales; the sales volume of graders reached 4,522 units, with an increase of 42% YOY. The grader industry in 2017 maintained stable growth and the growth rates exceeded 25% in the year except for that in January as low as 0.96%.

In 2018, the construction machinery industry is expected to improve. First, the supply-side reform achieved remarkable effects. Many key customers try to take the lead, stimulating the demand of buying new machines and improving the brand and image. Second, the 19th National Congress set strict standards on environmental protection, thus driving the demand of updating construction machines. Third, the international market is promising. XCMG, Sany and other companies perfected their overseas sales layout and gained greater brand acceptance. Fourth, the industry is closely related to life and engages in many segment markets, such as intelligent equipment. Therefore, the demand and market potential are both very large.

Related report:  Research Report on China’s Construction Machinery Industry, 2018-2022

https://www.cri-report.com/manufacturing-construction-machinery-machine-tool/896-3123-research-report-on-china-s-construction-machinery-industry-2018-2022.html

The post Analysis on Prospects of Construction Machinery Industry first appeared on CRI Report.

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