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

INDUSTRY INSIGHTS

The Thailand construction equipment market by volume was valued at 16,127 units in 2023 and is expected to reach 22,586 units by 2029, growing at a CAGR of 5.77% during the forecast period. The government of Thailand is investing in the redevelopment of infrastructure projects, including expanding ports, railway lines, roadways, and highways across the country. Moreover, the Thai government intends to allocate USD 2.9 billion toward healthcare infrastructure enhancements in 2024. This investment will target the modernization and expansion of current hospitals, the establishment of new healthcare facilities in areas with limited access, advancements in healthcare technology, and the development of the healthcare workforce. Continuous investment under the Eastern Economic Corridor (EEC) Initiative is expected to drive the Thailand construction equipment market during the forecast period.  

Increased Investment in Public Infrastructure Projects

• In November 2023, the Department of Land Transport and the State Railway of Thailand (SRT) signed an MoU to integrate land and rail transportation in Thailand. Under this agreement, the Department of Land Transport will invest in constructing truck terminals for nationwide goods distribution. At the same time, SRT will undertake initiatives, such as dual-track railway construction and new railway line projects, to expand its rail network and support the growth of the Thailand construction equipment market.
• In 2024, Thailand's Ministry of Transport plans to initiate construction on 14 infrastructure projects totaling USD 16.0 billion. These include significant rail projects like the Khon Kaen-Nong Khai dual-track railroad, the Bang Khun Non-Min Buri Orange Line, and the extension phases of the Red Line.
• Huasun Energy and Thai EPC Grow Energy agreed to provide 150 MW of heterojunction (HJT) modules. These modules will be utilized across various projects, including a floating photovoltaic (PV) project, ground power stations, and commercially distributed projects in Bangkok. Project operations were slated to begin in 2024.
• The Laem Chabang Port Phase 3 Development Project is a key initiative within the Eastern Economic Corridor (EEC) development strategy. It aims to improve connectivity and facilitate the transportation of goods to southern China and the CLMV countries (Cambodia, Laos, Myanmar, and Vietnam). 
• In December 2023, Gulf Energy Development Public Company Limited and the Electricity Generating Authority of Thailand (EGAT) entered into 25 Power Purchase Agreements (PPAs) for 12 solar projects in Thailand. These projects consist of five solar farms with a total capacity of 259.6 MW and seven solar farms with Battery Energy Storage Systems (BESS) accounting for a total capacity of 385.2 MW. Commercial operations are estimated to commence between 2026 and 2029.
• In June 2023, the Pattaya City Administration approved the plans to construct four new monorail lines in Thailand. The project includes the Green, Yellow, Purple, and Red Lines, with the Green and Yellow Lines slated for completion in the first phase (2021-2026).

KEY HIGHLIGHTS

• Earthmoving equipment accounted for the largest market share of the Thailand 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 is expected to drive the demand for excavators in the Thailand construction equipment market.
• The Thai government took multiple initiatives to promote the country's infrastructure industry.
• Chinese vendors have taken advantage of the opportunity to capture market share using various means.
• SANY has captured a 30.4% market share based on competitive pricing, digitalization, post-sales services, and the company's increasing service network.
• XCMG is increasing its Thailand construction equipment market share by re-orienting its marketing strategy. The company is marketing its products using online channels and selling them using methods like live bidding, giving its brand a premium positioning among its peers.
• Italthai Industry (ITI) Co. Ltd, a distributor of Volvo-SDLG-Tadano, is expanding its network nationwide to improve the sales of these companies' products. ITI is focusing on increasing sales of mini excavators by 50%.
• The recently introduced TM-ZX1205HRS loader crane is expected to augment sales within the Thailand construction equipment market, transportation, and logistics sectors. Tadano Italthai, the importer and distributor of Tadano cranes and lifting equipment in Thailand, showcased and demonstrated the TM-ZX1205HRS crane at the Saha Crane Auction Co., Ltd. in November 2023. The TM-ZX1205HRS features a new lifting capacity range of 12 tons within the Tadano TM crane series, filling the gap between the 10-ton TM-ZX1000 and 15-ton TM-ZX1500 series models. This crane is part of Tadano's new TM-ZX1200 series, which comprises a total of three models.

MARKET TRENDS & DRIVERS

Increased Focus on Lithium Mining

• The Ruangkiat deposit, confirmed by the Department of Primary Industries and Mines, contains over 14.8 million tonnes of lithium, enough to power at least 1 million electric vehicles with 50 kWh lithium batteries.
• Svolt Energy Technology Company, a spin-off of China's Great Wall Motor, has initiated mass production at Thailand's newly constructed electric vehicle (EV) battery assembly plant. The joint venture with Banpu Next, located near Chonburi, aims to supply the nearby Rayong province's EV industry.

Investment in Green Hydrogen
Thailand is also exploring using gas turbines that can operate on a combination of natural gas and green hydrogen or run entirely on hydrogen. Additionally, the government is considering the implementation of battery storage for solar energy, thereby leveraging the country's significant sun exposure and integrating fuel cell-driven power plants into its energy plans. Additionally, as of March 2024, Mitsubishi Heavy Industries Asia Pacific (MHI-AP) and PTT, a Thai state-owned oil and gas company, are conducting a joint pre-feasibility study to explore the potential of using 100% ammonia in gas turbine power generation in Thailand.

Power Generation Through Waste Management Triggers the Use of Excavators & Loaders
The government has planned two new waste-to-energy power plants in Bangkok. The plant is expected to generate 35 megawatts of electricity using 1,000 tons of waste as fuel each day. Also, Absolute Clean Energy Power Co. Ltd. has started working on the ‘ALPC6’ Waste to Energy project in the Krabi province of southern Thailand; this project will consume 144,000 tons of solid waste per year and generate 6MW of electricity.

Increased Investments in the Eastern Economic Corridor Initiative to Boost the Thailand Construction Equipment Market

• The total investment value amounted to USD 23.62 billion, depicting a significant 43% increase compared to the previous year. This marks the highest investment value in five years, indicating a positive trend in investment activity in infrastructure and supporting the Thailand construction equipment market growth.
• In March 2023, the Thai government started promoting several large-scale water transport projects, including an industrial port development project in the Eastern Economic Corridor (EEC) district.

Rising Investments in Transit Projects Across Thailand to Support Road Construction Equipment in the Thailand Construction Equipment Market
Several transportation projects are under construction in Thailand:

• The construction of the Bangkok-Ubon Ratchathani high-speed railway is scheduled for completion by 2028. This railway will drastically reduce travel time between Bangkok and Ubon Ratchathani from 12 to 2 hours.
• The expansion of the Bangkok Mass Rapid Transit (MRT) system, including the completion of the Purple Line extension by 2026
• The construction of the Eastern Economic Corridor (EEC) high-speed rail network links the EEC with the major cities in Thailand and neighboring countries; this network is anticipated to be operational by 2030.

Increased Focus on Boosting Green Energy Resources Across the Country
The Thailand government has introduced several plans, such as the Energy Efficiency Plan (EEP), the Alternative Energy Development Plan (AEDP), and the Power Development Plan (PDP), to increase its renewable energy share. According to the IRENA report, Thailand's share of renewable energy is expected to reach 37% by 2036 from 12% in 2019. Furthermore, the Royal Thai Government is developing the Thailand National Energy Plan (NEP), a strategic roadmap outlining the future of Thailand's energy systems up to the 2040s.

INDUSTRY RESTRAINTS

Rising Land and Housing Prices Restrict Residential Demand Across the Country

• According to the Bank of Thailand, Thai house prices are experiencing modest growth, with single-detached houses demonstrating a 3.6% year-on-year increase in Q3 2023. This follows a growth trend in the previous quarters, indicating increased property demand. House prices rose slightly by 0.3% (0.2% inflation-adjusted) in Q3 2023.
• In Bangkok and nearby areas, condominium prices increased by 4.8% (4.5% in real terms) in Q3 2023 compared to the previous year, contrasting with the 2% year-on-year decline in Q3 2022.

Economic and Political Uncertainties in Thailand to Hamper Construction Activity

• According to the NESDC, Thailand's slower economic growth in Q3 can be attributed to contractions in government spending, exports, and imports, which impacted both the agricultural and non-agricultural sectors.
• The industrial sector declined by 2.8% over two consecutive quarters. Despite a substantial 8.1% expansion in private consumption, economic challenges persisted due to a 3.1% drop in exports. However, the services sector experienced a substantial growth of 23.1% due to increased foreign tourist activities.
• In 2023, business groups in Thailand raised concerns about political instability negatively impacting the investment climate and foreign investor confidence.

Skilled Labor Shortage and Aging Population in Thailand

• Thailand's labor market is undergoing structural challenges, intensified by the digital revolution, leading to the demand for swift adjustments from workers, businesses, and the government for global competitiveness. Despite rapidly recovering from the COVID-19 crisis, persistent issues include workforce distribution shifts and declining productivity.
• The Thai economy heavily depends on foreign workers, with around 2.7 million employed in October 2022, primarily non-skilled. The Ministry of Labor states the presence of approximately 2.4 million general workers, and private sector data suggests a continued need for additional workers from neighboring countries, ranging from 400,000 to 500,000 people.

VENDOR LANDSCAPE

• Caterpillar, Komatsu, Zoomlion, Hitachi Construction Machinery, SANY, XCMG, Kobelco, and Volvo CE are leaders in the Thailand construction equipment market. These companies have a strong market share and offer diverse sets of equipment.
• Terex, CNH Industrial, LiuGong, Manitou, Kato Works Co. Ltd., Bobcat, Takeuchi, and Sakai are niche players in the Thailand construction equipment market. These companies offer low product diversification and have a strong presence in the Thai local market.
• Liebherr, Yanmar, JCB, Kubota, Sumitomo, Tadano, and HD Hyundai Construction Equipment are emerging in the Thai market. These companies are introducing new technologically advanced products to challenge the share of leaders in the Thailand construction equipment market.
• Toyota Material Handling, Ammann, Airman, Merlo Spa, XGMA, JLG, GEHL, Haulotte, Euromach, SDLG, and Hidromek have low product diversification in the Thailand construction equipment market, and they are lagging in adopting new technologies.