(MENAFN- GlobeNewsWire - Nasdaq) The Indonesia construction equipment market is projected to grow at a CAGR of 4.12% from 2024 to 2030, driven by investments in infrastructure, demand for earthmoving equipment, and the adoption of eco-friendly technologies. Tariffs affect the market, yet local manufacturing mitigates reliance on imports. Earthmoving equipment, especially excavators, holds the largest share, with Komatsu, Caterpillar, and Hitachi being key players. Digitalization, alternative fuels, and advancements in mining and energy sectors are enhancing market dynamics. Challenges include fluctuating commodity prices and new tax implementations. Major distributors like United Tractors and PT Hexindo Adiperkasa are pivotal in Indonesia's market landscape.Dublin, July 15, 2025 (GLOBE NEWSWIRE) -- The "Indonesia Construction Equipment Market - Strategic Assessment & Forecast 2025-2030" report has been added to ResearchAndMarkets.com's offering.
The Indonesian construction equipment market is expected to grow at a CAGR of 4.12% from 2024 to 2030.
Komatsu, Volvo CE, Hitachi Construction Machinery, SANY, and Caterpillar are the front-runners in Indonesia's construction equipment market. These companies have strong market share and offer diverse sets of equipment in the Indonesian industry.
Yanmar, Kubota, Manitou, Liu Gong, Takeuchi, and Toyota Material Handling are niche players in the Indonesian construction equipment market. These companies offer low product diversification and have a strong presence in the country's market.
JCB, Kobelco, Sumitomo, HD Hyundai Construction Equipment, CNH Industrial N.V., XCMG, and Zoomlion are emerging in Indonesia's construction equipment market. These companies are introducing new technologically advanced products to challenge the share of market leaders in the country's market.
Kato Works, Liebherr, Terex, and Sakai have low product diversification in the Indonesian construction equipment market; these companies are lagging in adopting new technologies used in construction equipment.
KEY HIGHLIGHTS
Earthmoving equipment accounted for the largest market share in the Indonesia construction equipment market in 2024. Excavators in the earthmoving segment accounted for the largest share in 2024. The country's investment in renovating its public infrastructure drives the growth of the Indonesian earthmoving industry. In 2024, the market for 4.5-ton excavators was the second largest after 20-ton excavators in Indonesia. There are some major distributors of construction equipment in the country's construction equipment market, including United Tractors, PT Hexindo Adiperkasa, Intraco Penta, and Traktor Nusantara. OEMs in Indonesia are adopting electric and hydrogen fuel technology: Komatsu develops hydrogen fuel cell excavators with Toyota systems for the Southeast Asian market, including Indonesia. Volvo launched the ECR25 electric compact excavator, L25 electric compact wheel loader, and EC55 electric mini excavator in 2024. In 2023, Komatsu also launched the HB365-1 hybrid excavators in the Indonesian industry. In June 2021, Hitachi Construction Machinery addressed cost and turnaround challenges by establishing a parts remanufacturing plant in Indonesia. This facility eliminates the need to transport large- and medium-sized hydraulic excavators to Japan for remanufacturing. Demand for earthmoving equipment is strongest in the Indonesia construction equipment market. Excavators & wheel loaders are the most used construction equipment in the industry. Dump trucks and Concrete mixers also witnessed strong demand in 2024. With a rise in investment in public infrastructure, sales of material handling equipment such as cranes and forklifts are expected to grow at a robust pace during the forecast period.
IMPACT OF TARIFFS
The Indonesian construction equipment market is moderately affected by tariffs. Several Japanese brands, such as Komatsu and Hitachi, have local manufacturing facilities in Indonesia. The country has low dependence on imported raw materials like steel, aluminium, and rubber from the U.S. market. However, American brands like Caterpillar also hold a strong market presence in Indonesia. The prices of imports from these American brands have increased due to the impact of tariffs. Indonesia decided to buy more American products, such as liquefied petroleum gas and wheat, as well as cut its non-tariff barriers so that the US would not apply a 32% tariff on Indonesia's exports, which include electronics, apparel, and footwear, in 2025.
INDONESIA CONSTRUCTION EQUIPMENT MARKET TRENDS & DRIVERS
Use of Environment-Friendly Fuels
Concerns over environmental issues led the Indonesian government to aim for carbon neutrality by 2060, driving the need for electric construction machinery. The demand for environment-friendly construction equipment is increasing, especially to support sustainable projects, such as green infrastructure development, renewable energy, and environmental rehabilitation. Construction equipment manufacturers now focus on alternative fuels such as hydrogen, electricity, or hybrid solutions. The demand for construction equipment that can operate in environmentally sensitive areas, such as protected forests or conservation areas, is expected to grow in the coming years. Major construction equipment manufacturers, such as Volvo Construction Equipment, SDLG, and XCMG, launched electric and compact mini excavators in Indonesia to tackle the growing industry demand.
Digitalization & Adoption of Latest Technology
There is growing adoption of the latest technologies in the Indonesia construction equipment market. The use of innovative technologies such as IoT, artificial intelligence (AI), and automation is gradually being applied, especially in modern construction equipment. This technology allows manufacturers to monitor equipment performance in real-time, prevent equipment downtime with predictive maintenance systems, and improve their operational efficiency. In addition, automated construction equipment, such as automated excavators or loaders, has been introduced in several large projects. These machines not only increase productivity but also increase operator safety. The use of digital technology generates new opportunities in construction equipment fleet management, allowing manufacturers to maximize the use of their assets.
Growing Investments in National Infrastructure Projects
The Indonesian government plans to invite global investors to participate in a national infrastructure project worth close to USD 12.3 billion, with investment opportunities in roads, housing, food, and renewable energy sectors. The government is inviting foreign investors for investment in 46 projects, which also include major toll road development projects. Growing government investment in the national strategic project is expected to drive the Indonesia construction equipment market. The national strategic program includes the construction of toll roads, ports, airports, and various other public facilities that require construction equipment at every stage of construction.
Surge in Use of Construction Equipment in Mining & Energy Sectors
Indonesia is one of the leading exporters of coal, nickel, and other minerals. These mining activities rely on construction equipment for various processes, such as excavation, loading, and transportation. A surge in the global demand for nickel and other rare earth minerals, which are used for manufacturing EV batteries, is expected to drive the Indonesia construction equipment market. In Q1 2025, Indonesia attracted nearly USD 13.6 billion of foreign direct investment, marking a 12.7% increase in FDI inflow in Q1 2024. Investors have strong confidence in strategic sectors such as mining, metal smelting, infrastructure, and logistics.
INDUSTRY RESTRAINTS
Volatile Commodity & Building Material Prices
The mining industry is one of the largest consumers of construction equipment in the Indonesian industry. The demand for large construction equipment is strongest in the mining industry. However, the mining and energy sectors are sensitive to fluctuations in prices of commodities such as coal, nickel, and other minerals. The decline in commodity prices negatively impacts mining activities, which directly influences the growth of the Indonesia construction equipment market. Also, low commodity prices impact mining companies' income, resulting in a decline in demand for new construction equipment for mining projects. Surge in prices of building materials, such as cement, steel, and asphalt, fluctuates due to global market instability and inflation.
Implementation of VAT & Heavy Equipment Tax
The Indonesian government planned to implement a 12% VAT and a heavy equipment tax in 2025, which is expected to negatively impact the Indonesia construction equipment market. The impact of these two tax policies is expected to increase costs for construction equipment. Regional governments will determine the heavy equipment tax rate through a regional regulation. For example, a 20-ton excavator selling for 0.11 million will now cost USD 0.22 million due to a tax increase. Currently, several provinces such as DKI Jakarta, West Java, and Central Java have started implementing the heavy equipment tax.
VENDOR LANDSCAPE
Prominent Vendors
Caterpillar Komatsu Volvo Construction Equipment Hitachi Construction Machinery Liebherr SANY Xuzhou Construction Machinery Group Co. Ltd. (XCMG) JCB Kobelco Zoomlion Heavy Industry Science & Technology Co. Ltd Hyundai Construction Equipment
Other Prominent Vendors
Kubota CNH Industrial Yanmar LiuGong SAKAI Heavy Industries Takeuchi Toyota Material Handling Manitou Sumitomo Construction Machinery KATO Works Co. Ltd. Terex Corporation Toyota Material Handling International
Distributor Profiles
PT Indotruck Utama United Tractors Multicrane Perkasa PT. Airindo Sakti PT. Badak Prima Lestari PT. United Equipment Indonesia
Key Attributes:
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