First publishedon www.AggBusiness.com
Asia Pacific construction equipment demand will grow from being worth US$55 billion in 2018 to US$80 billion by 2025, while construction equipment shipments are expected to grow at a compound annual growth rate (CAGR) of over 4% from 2019 to 2025, according to a new Global Market Insights (GMI) report.
Technological advancements, such as integration of intelligent machine parts, enhanced ropes, and automated machine functions, are, says the GMI report, also contributing to Asia Pacific (APAC) construction equipment market growth. Due to increasing human labour and ageing workers in Asian countries, construction equipment end-users are moving toward enhanced machinery with technically-advanced features. Moreover, due to various accidents and labour safety issues in conventional methods, the GMI report says that the construction industry is witnessing a shift to modern machinery, further supporting the expansion of the APAC construction equipment market.
The GMI report says that countries including China, Japan, and South Korea are experiencing a rapid rise in machinery production and consumption owing to the presence of several key manufacturers that supply products across the globe. The companies are investing in product development and global expansion, supporting market growth.
A key reason that hinders the APAC construction equipment market’s rise is, states the GMI report, the unawareness of several contractors and end-users about the machinery benefits. The report continues, ‘Buyers in smaller countries primarily focus on the price factor, which is limiting the sales of costly and technically-developed machinery. OEMs in the industry fail to educate the customers about the machine’s advantages over human labour working with conventional bulky equipment. With the evolution of high-quality, complex, and multi-purpose machinery in developing countries, there is a need for appropriate customer education aiding the communication of added features. Additionally, increased customer awareness about the reliability and quality benefits is expected to support the APAC construction machinery market expansion.’
Demand for new machines in the APAC construction equipment market is, says the GMI report, rapidly rising due to several infrastructure and building enhancement projects undertaken by various governments such as China, India, and Japan. The presence of several major global manufacturers in China and Japan is aiding customers to purchase technically-equipped products at lower prices and less time compared to other countries, increasing the demand for new machinery. Owing to the presence of several manufacturing plants and distribution facilities, the regional customers can easily avail repair and maintenance services provided by manufacturers, further supporting the growing consumption of new products in the APAC construction equipment market.
Online sales channels in the APAC construction equipment market were valued at over $1.3 billion in 2018, the GMI report states. It continues, ‘These sales channels are gaining high popularity due to increased internet usage and timely and high-quality machine provision through manufacturers’ online websites. Due to the convenience of transportation and digital payments, customers are shifting toward online purchasing options, which provide them with timely delivery. Online sales channels are growing steadily in the ASEAN countries due to improved mobile connectivity and digitization trend. Additionally, rental companies also provide construction and material handling machinery at low costs compared to the new machinery, further supporting the APAC construction equipment market growth. Customers with low initial investment capabilities switch to the machinery rental options to save the operational & maintenance costs required in buying new machinery.’