Research and Markets report says that South-East Asia's construction equipment market growth is buoyed by several factors such as growing real estate market, expansion of public & private infrastructures and demand in mining sector. Rising government spending for upgrading existing infrastructure combined with new projects especially in countries such as Indonesia and Malaysia, and budding utility projects (Hydropower & Thermal Power) in Laos, Cambodia and Thailand have resulted into growing demand for construction equipment in South-East Asia region. Moreover, signs of economic recovery in several South-East Asian countries associated with increase in inflows of FDI have resulted into growth of construction market. According to the report, several Chinese equipment manufacturers have started targeting South-East Asian market, which has resulted into decline in prices of equipment due to growing competition. Amongst all applications, construction application segment accounted for majority revenues share in the region followed by mining and utility applications, respectively. Also, Indonesia held majority of revenues share in the overall South-East Asia construction equipment market owing to increasing infrastructure developments and commercial construction. However, during the forecast period, Vietnam and Philippines are expected to exhibit highest growth rates.
As per an Oliver Wyman's report, Chinese construction equipment manufacturers in particular are perfectly positioned to serve the traditional emerging countries and meet the demand of the new markets. They offer a very wide range of products that meets the entire demand for construction and civil engineering equipment - both for heavy and light work. According to the report, products of Chinese construction equipment manufacturers are less geared to specific tasks than the machines of Western manufacturers. They also have two other advantages: they are based on simple technology, making own repairs possible, and the purchase costs are relatively low. Furthermore, Chinese companies are extremely active and creative in their endeavors to unlock new sales regions. They are creating their own markets by means of state funding for infrastructure projects, accompanied by investments in raw material exploration or production locations, and traditional sales financing. In the meantime, they have also begun to step up their investments in product quality and local infrastructures. All this calls for a quick response by Western companies. Once users in the local markets have become familiar with Chinese products, and structures such as service networks and spare parts supply have become established, it will be very difficult to convince them to switch to Western products.
