Japan Crawler Excavator Market - Strategic Assessment & Forecast 2024-2029

MARKET OVERVIEW

The Japan Crawler Excavator market by volume was 57,500 units in 2023 and is expected to reach 69,146 units by 2029, growing at a CAGR of 3.12% during the forecast period. Several social infrastructures such as roads, railways, airports, ports, bridges & tunnels are aging in Japan. According to government data, nearly 55% of bridges, 36% of tunnels, 16% of sewage pipes, and 43% of port facilities will be older than 50 years by 2030 in Japan. Therefore, the government is investing in renovating these structures in 2024. Moreover, the rising government investment in upgrading aging infrastructures across the country is expected to drive the Japan crawler excavator market during the forecast.

Government Large Investment In Infrastructure For EXPO 2025

Japanese government proposes a national budget of over USD 744 billion in 2024. A large amount of investment is planned to be directed toward public infrastructure development, including renovating aging infrastructure and disaster prevention and mitigation in 2024. The government also planned to direct the investment in public infrastructure for the EXPO 2025 in the Osaka region. The government will increase its focus on redevelopment and urban planning projects in the Tokyo region in 2024. The investment is also planned for the redevelopment projects in western Japan's Kansai and Kinki areas. In 2023, the government announced a $113 billion stimulus package to offset rising fuel and grain prices caused by the Ukraine-Russia war. Also, the government increased its investment in the renewable energy sector, triggering the demand for electric and hydrogen fuel excavators in the Japan crawler excavator market in 2024. Several OEMs are working on electric and hydrogen fuel cell technology in the Japanese market.

KEY HIGHLIGHTS

1. Mini-size excavators have the largest share in the Japan crawler excavator market due to their versatile uses in the construction industry.
2. The rise in public infrastructure and renewable energy projects will drive crawler excavator sales in Japan during the forecast period.
3. Crawler excavator utilization in the construction industry by end-users has the largest Japan crawler excavator market share in 2023.
4. Japan's OEMs have diverse product offerings and started focusing on electric and hydrogen-powered construction equipment. In September 2023, Kobelco launched the brand-new Short Radius excavators SK230SRLC-7 and SK270SR(N)LC-7 to fulfill utility and road maintenance needs. These are perfect for operators working in urban and residential jobsites.
5. In May 2023, Komatsu manufactured a concept of a medium-sized hydraulic excavator machine that runs on a hydrogen fuel cell to achieve carbon neutrality at the workplace of construction equipment. 
6. By introducing a new 8.5-ton mini-excavator, Kubota has expanded its range of innovative construction equipment and offered consumers enhanced efficiency and superior operation. A two-piece boom can be attached to a new mini excavator, increasing its working range, dumping capacity, and efficiency in tight places.
7. Construction equipment companies in the Japan crawler excavator market are focusing on adapting technological solutions.In October 2023, Kyushu Electric Power and Hitachi Construction Machinery signed a memorandum of understanding about cooperation on power supply solutions to promote zero emissions on construction sites.
8. Yanmar revealed the prototype of a cutting-edge electric excavator with advanced force control at the Construction DX Challenge 2023 event, which was organized by the Japanese Ministry in November 2023.
9. Construction equipment manufacturers like Caterpillar, Komatsu, Kobelco, and Hitachi are investing significantly in remote control and integrating 5G technology into their equipment.
10. Komatsu launched a 3-ton-class electric mini excavator equipped with lithium-ion batteries in the Japanese market in October 2023.

MARKET TRENDS & DRIVER

Government Regulations to Reduce Carbon Emissions from Buildings Are Expected to Support Demand for Electric Excavators in the Japan Crawler Excavator Market

1. In 2023, the Japanese government introduced new building regulations to reduce carbon emissions from buildings and homes, with the goal of achieving zero carbon emissions by 2050.
2. Under new regulations, CO2 emissions from newly built homes must be around 30% lower than current standards, and emissions from other buildings, including offices and shops, should be reduced by 27%.
3. The government focuses on installing low-carbon technology, such as solar panels and heat pumps, to reduce carbon emissions from buildings.
4. In 2021, the government invested USD 6.6 billion in installing low-carbon technology under the Social Housing Decarbonization Fund. The government also plans to upgrade existing buildings to reduce carbon emissions.

Integration of Technological Solutions in Crawler Excavator

1. The market share for advanced excavators equipped with ICT and remote monitoring capabilities is rising in Japan. The shortage of skilled labor and the increasing number of accidents at construction sites drive the country's adoption of automated rental construction equipment.
2. Projections indicate that Japan's construction industry may lose approximately 1.2 million workers by 2030. In response to this challenge, Japan’s primary objective is to boost the productivity and efficiency of its workforce. Smart construction has emerged as a central solution to elevating productivity levels.
3. Manitou’s Ecostop function automatically turns off the engine and all hour meters based on a set timer (1 to 30 minutes). Moreover, the Auto Power function of the JSM joystick automatically adjusts the engine speed according to the operator's request for hydraulic power from the JSM (Joystick Switch & Move).

Country’s Aging Infrastructure and the Upcoming Expo 2025 Will Propel the Demand for Crawler Excavators in the Japan Crawler Excavator Market

1. In 2023, the Japanese government invested in renovating aged infrastructure nationwide. Investments are also directed for disaster prevention & mitigation, national resilience, and other public work. The growth in the investment for various projects is projected to support the Japan crawler excavator market.
2. The nation currently has approximately 720,000 road bridges. By 2024, this number is anticipated to decrease to approximately 290,000 bridges. By 2033, the count is projected to rise to 450,000 bridges, all of which have stood for over half a century since their construction. Therefore, Japan has intended huge investments in renovating and repairing old infrastructure.

High Investments Toward Decarbonizing the Country Are Supporting the Renewable Energy Sector

1. In Sapporo, a collaborative partnership involving industry, government, and academia has been announced to support investments in Hokkaido to transition towards a decarbonized society. The objective is to attract investments totaling approximately USD 2 billion in the renewable energy sector over the next decade.
2. Tokyo Electric Power Co. Holdings plans to invest USD 7 billion in renewable energy projects by fiscal 2030 to construct 6 to 7 gigawatts of additional capacity.

INDUSTRY RESTRAINTS

Rapid Aging Population and Labor Scarcity Will Hamper Construction Activities

1. According to a study conducted in 2023, Japan could confront a deficit of over 11 million workers by 2040, highlighting the country's rapidly aging population's economic difficulties.
2. The worker population is anticipated to experience a sharp decline starting in 2027. By 2040, the labor supply is projected to contract by approximately 12% compared to 2022, while the demand for labor remains constant.
3. Moreover, in response to the acute shortage, in 2021, YKK Group, the largest zipper manufacturer globally, eliminated the retirement age restriction for its employees. Electronic retail chain Nojima also adopted a similar policy in 2020, allowing workers to continue their employment until they reach the age of 80.

Government Norms to Control Carbon Emission Is Expected to Hamper Sales of Large Excavators in the Japan Crawler Excavator Market

1. The Japanese government is concerned about air pollution and taking necessary steps to control it. The government proposed tough emission standards for non-road mobile machinery, such as construction equipment and off-road vehicles.
2. Stage V emission standards could replace existing Stage IV emission rules. These standards focus on reducing the emission of nitrogen dioxide & particulate matter.
3. In 2021, the government set a high emission control standard by not allowing diesel-operated heavy construction machinery that did not follow Stage V emission standards.

VENDOR LANDSCAPE

1. Komatsu, Hitachi Construction Machinery, Kubota, Caterpillar, Kobelco, and Yanmar are leaders in the Japan crawler excavator market. These companies have strong market share and offer diverse equipment.
2. Develon, Sumitomo Construction Machinery, & Takeuchi are niche players in the Japan crawler excavator market. These companies offer low product diversification and have a strong presence in the local market in Japan.
3. Volvo CE, Hyundai Construction Equipment & SANY are emerging in the Japan crawler excavator market. These companies are introducing new technologically advanced products to challenge the market share of market leaders in the country’s market.
4. Airman, Kato Works, & Hyderma are stragglers in the Japan crawler excavator market. These companies generally lag in providing innovative and advanced product technology compared to competitors.