Vietnam Construction Equipment Market - Strategic Assessment & Forecast 2024-2029

Increased Investment in Public Infrastructure Projects Across Vietnam

• Vietnam's government has allocated approximately USD 27 billion for public investment in 2024, with a significant focus on transportation infrastructure, receiving USD 17.2 billion of the total. The government emphasized that public investment is crucial for economic growth, reducing logistics costs, and enhancing competitiveness.
• Several transport industry projects are underway in the country in 2024. For instance, the government approved the Ho Chi Minh City-Moc Bai expressway project and the Gia Nghia-Chon Thanh project in 2024.
• Another major transport industry project is the construction of the Southern Expressway Link (SEL) in Vietnam. This project spans 137.9 miles and will link Ho Chi Minh City to the Mekong Delta. With an estimated cost exceeding USD 3 billion, it is set to finish by 2025.
• Investment is also directed at various railway projects in the country. For instance, Hanoi is investing over USD 3.16 billion in new metro lines. Construction of the Nam Thang Long-Tran Hung Dao line, spanning 11.5 km, will start next year and finish by 2029, costing over USD 14 billion.
• In July 2024, the Ministry of Transport in Vietnam approved the development of the Dai Ngai Bridge project, which will connect Tra Vinh and Soc Trang provinces in the Mekong Delta. The project is valued at approximately USD 340 million. This bridge aims to enhance regional connectivity and support economic growth in the Mekong Delta region.

KEY HIGHLIGHTS

• Earthmoving equipment accounted for the largest market share of the Vietnam construction equipment market in 2023. Excavators in the earthmoving segment accounted for the largest share in 2023. Rising investment in housing, port expansion, and public infrastructure projects are expected to drive the country's demand for excavators.
• Vietnam's construction market is witnessing significant growth due to economic recovery and considerable government investments in industrial facility development, resulting in a heightened demand for high-quality construction equipment.
• The expansion of Vietnam's economy, alongside increased investments in infrastructure, real estate, commercial sectors, mining, and housing, has contributed to the rapid development of the Vietnam construction equipment market. This growth is largely attributed to the region's emergence as a developing nation and the rising number of construction and infrastructure projects in the country.
• Chinese manufacturers have a strong market presence in Vietnam's crawler excavator market. SANY has the strongest market share among Chinese players in the region's market in 2024. Liugong has established its third subsidiary in Southeast Asia, with the official opening of Liugong Vietnam Company in Hanoi.

SEGMENTATION ANALYSIS

Segmentation by Type

Earthmoving Equipment

• Excavator
• Backhoe Loaders
• Wheeled Loaders
• Other Earthmoving Equipment (Other loaders, Bulldozers, Trenchers, Motor Graders)

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

Segmentation by End Users

• Construction
• Mining
• Manufacturing
• Others (Power Generation, Utilities Municipal Corporations, Oil & Gas, Cargo Handling, Power Generation Plants, Waste Management)

MARKET TRENDS & DRIVERS

Vietnam’s National Hydrogen Development Strategy to Boost Demand for Green Fuel-Integrated Construction Equipment

• According to the strategy document, production capacity will increase to 10 million to 20 million metric tons annually by 2050. These targets are part of Vietnam's broader efforts to achieve its net-zero emissions goal by 2050.
• As part of the national strategy, Vietnam plans to scale up green hydrogen and carbon capture technologies by 2050. The strategy also aims to develop markets for hydrogen across various sectors, including electricity generation, transportation (road, rail, water, and air), industrial production (such as steel, cement, chemicals, and oil refining), and commercial and residential applications.

Vietnam’s Strategic Shift to Electric Construction Equipment

• The use of electric construction equipment in Vietnam construction equipment market is on the rise, driven by the country’s rapid infrastructure development and growing focus on sustainability.
• The government is supporting the adoption of electric construction equipment through favorable policies and incentives aimed at reducing environmental impact and promoting sustainable development.
• To align with the global net zero emission target, companies are focusing on capitalizing on lithium-ion battery technology in electric excavators and other products to reduce their carbon footprint.

Investment Under Vietnam’s Transport Infrastructure Master Plan Support the Construction Equipment Market Growth

• In April 2021, Vietnam's transport ministry revealed its master plan for transport infrastructure development through 2030, with an estimated budget ranging from USD 43 billion to USD 65 billion.
• The plan includes the construction of thousands of kilometers of expressways, high-speed rail lines, deepwater ports, and international airports. The government aims for the country to handle 4.4 billion tons of cargo annually and to support road transport capable of moving 2.76 billion tons of cargo.
• The surge in investment in transport industry projects is expected to drive demand for earthmoving and road construction equipment in the construction equipment market during the forecast period.

Growing Investment in the Renewable Energy Sector

• In 2024, Vietnam's decree on direct power purchase agreements (DPPAs) marks a major milestone for the renewable energy sector. It allows private developers to sell renewable energy directly to private consumers and permits the development of privately owned transmission lines.
• This could enable large-scale solar and wind farms in remote areas to supply industrial consumers directly, potentially sparking rapid growth in the country’s renewable energy development.
• The country’s geographical location provides tremendous opportunities for wind power generation plants. It is one of the largest producers of energy (311 gigawatts) through wind energy. Supporting government laws and policies, including import tax rates, tax incentives, and land tax exemptions, attract foreign investment in the country’s renewable energy sector.
• Growing investment in the renewable energy sector is expected to drive the demand for excavators, loaders & cranes in the Vietnam construction equipment market.

INDUSTRY RESTRAINTS

Impact of Vietnam’s Currency Depreciation on Import Activities

• Vietnam completely relies on the import of construction equipment, including from China, Japan, Korea & US. In 2024, the exchange rate witnessed a constant increase, impacting the country’s imports.
• Since the beginning of 2024, Vietnam's currency has depreciated by 4.9% compared to USD. This makes imports costly, which can negatively impact the growth of the Vietnam construction equipment market.
• Various global disruptions, including the Israel - Hamas war, impact oil prices, inflationary pressures, interest rate hikes, and supply chain disturbances. These challenges will impact the country’s imports in 2024. According to government data, machine and equipment imports declined 8% in 2023. Similar trends are expected to continue in 2024 due to the continuous depreciation of the country's currency.

Economic Challenges and Rising Building Material Costs in Vietnam

• The Vietnam Association of Construction Contractors reports that, despite favorable macroeconomic conditions, economic recovery, increased public investment, and improvements in the real estate market, domestic construction contractors continue to face significant challenges.
• These challenges include unpaid debts, construction and material prices not aligned with market rates, and unfair competition in bidding processes. These issues affect not only small and medium-sized contractors but also make it difficult for large contractors to sustain their operations.
• The prices for construction materials are not reflecting the actual market conditions. This could suggest price controls, supply chain disruptions, or other market inefficiencies leading to discrepancies between costs and market prices, further squeezing contractors' margins.

VENDOR LANDSCAPE

• Caterpillar, Komatsu, Volvo CE, Kobelco, XCMG, SANY, and Hitachi Construction Machinery are the front runners in the Vietnam construction equipment market. These companies have a strong market share and offer diverse sets of equipment.
• Terex, Dingli, SDLG, KATO, Manitou, Yanmar, Sumitomo, JLG, CNH Industrial, and Takeuchi are niche players in the Vietnam construction equipment market. These companies offer low product diversification and have a strong presence in the country’s market.

Key Vendors

• Caterpillar
• Komatsu
• Volvo Construction Equipment
• Hitachi Construction Machinery
• SANY
• Xuzhou Construction Machinery Group Co. Ltd. (XCMG)
• JCB
• Kobelco
• Zoomlion Heavy Industry Science&Technology Co., Ltd.
• HD Hyundai Construction Equipment
• LiuGong
• DEVELON

Other Prominent Vendors

• CNH Industrial
• Tadano
• Terex Corporation
• SDLG
• Manitou
• MERLO S.p.A.
• Yanmar
• SUMITOMO CONSTRUCTION MACHINERY CO., LTD.
• Bomag
• Takeuchi
• Bobcat
• AIRMAN
• Wacker Neuson
• Shantui Construction Machinery Co., Ltd
• JLG
• Ammann
• Hidromek
• Toyota Material Handling
• KATO WORKS CO., LTD.
• Zhejiang Dingli Machinery Co., Ltd.
• Aichi Corporation

Distributor Profiles

• Tin Quang Equipment JSC
• VINH PHU CORPORATION JOINT STOCK COMPANY
• MARUBENI HEAVY EQUIPMENT CO., LTD.
• JCT VIETNAM CO., LTD
• Multico Equipment Vietnam Co., Ltd
• TCE Service and Equipment Joint Stock Company
• U-MAC
• Excado Vietnam Co., Ltd.

KEY QUESTIONS ANSWERED