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

INDUSTRY OVERVIEW

The Vietnam crawler excavator market was 1,524 units in 2023 and is expected to reach 1,974 units by 2029, growing at a CAGR of 4.41% during the forecast period. In 2024, the Vietnamese government plans to invest over USD 25 billion in various public infrastructure projects nationwide. Nearly 65% of the total investment is scheduled for transport sectors, which will promote smooth transit and create new development space for localities and regions across the country. Hence, a surge in government spending on public infrastructure projects is expected to positively impact the Vietnam crawler excavator market during the forecast period. 

Increased Investment in Public Infrastructure Projects

1. In 2024, the Ministry of Transport Vietnam drafted a road and highway construction plan. The department aimed to connect all highways to main political centers, key economic regions, seaports, and international airports. The goal is to increase this to 3,000 kilometers by 2025 and 5,000 kilometers by 2030. In 2024, another 674 kilometers of highways were completed across 15 provinces and cities, bringing the total to 2,001 kilometers.
2. The government has planned to invest ~USD 17 billion in road infrastructure in 2024. The project investment is planned under the PPP (Public Private Partnerships) Model. The ministry also encourages local authorities to apply for official development assistance and state budgets.
3. By 2050, the Vietnam government wants to be carbon neutral. The government is emphasizing using renewable energy sources, such as encouraging the use of electric cars in the transportation sector, lowering the usage of fossil fuels, and installing solar panels on buildings to generate electricity.

KEY HIGHLIGHTS

1. Small and medium-sized excavators dominated the Vietnam crawler excavator market in 2023. Due to growing investment in public infrastructure, including the transport sector, crawler excavator sales are expected to grow steadily in 2024.
2. The weakening of Vietnam's local currency, the Dong, is expected to impact further heavy equipment sales, including excavators, in the Vietnam market in 2024. The currency's wakening will also impact the increasing cost of excavators, as Vietnam majorly depends on imports of excavators.
3. The market for small and medium excavators in the Vietnamese crawler excavator market is strong due to their extensive use in urban construction projects.
4. Chinese manufacturers have a strong presence in the Vietnam crawler excavator market. In 2024, SANY had the strongest market share among Chinese players.
5. Liugong has established its third subsidiary in Southeast Asia, with the official opening of Liugong Vietnam Company in Hanoi.
6. The region’s government allows duty-free import of crawler excavators. The country relies on importing construction machinery, including excavators from China, the U.S., Japan & Korea.
7. In 2023, Vietnam organized the National Green Hydrogen Summit to explore advances in the country’s green hydrogen sector.

MARKET TRENDS & DRIVERS

Shortage of Labor Triggers Excavator Equipped With Automation & Smart Operation Technology

Vietnam faces severe labor shortages in various industries, such as construction, manufacturing, and mining. The country highly depends on migrant workers from Indonesia, Thailand, and Bangladesh. Also, the country witnessed a sharp decline in the labor force in the manufacturing and construction industries in 2023. The shortage of labor forces triggers the demand for recent technologies in the Vietnam crawler excavator market to increase workers' efficiency and reduce the dependency on laborers. For instance, leading construction equipment company Hitachi introduces wheel loaders and excavators with automation, smart operation technology & Consite Hitachi Comprehensive Machine Management support system.

Introduction of Dual Excavator in Vietnam Crawler Excavator Market Due to Its Flexible Uses

1. The Chinese manufacturer XCMG introduced dual-use diggers and ordinary peach shovels in the excavator. This equipment has the outstanding advantage of working multipurpose at a time, like a chain hoe and wheel hoe, by switching between the chain and tire. It is widely used in the construction and manufacturing industries in Vietnam.
2. In 2023, XCMG launched dual excavators that were extremely flexible, cost-efficient, and easy to transport. Chinese companies have recently gained good market share due to their innovative products, low prices, and excellent after-sale services. The introduction of dual excavators supports the growth of Chinese companies in the region’s market.

Rise in Infrastructure Investment Projects

1. In 2024, the region’s government plans to invest over USD 25 billion in various public infrastructure projects nationwide. The government's infrastructure projects rely on three investment channels (domestic, foreign, and private). A large amount of investment is planned for the transport sector, as investment in the transport industry will reduce business logistics costs and increase the competitiveness of businesses and the economy. Investment in various projects is projected to support the growth of the Vietnam crawler excavator industry.
2. The region’s government planned 34 giant infrastructure projects across 46 provinces in 2024. In addition, the government also planned five railway projects, two airports, & several road, highways, and ring roads construction projects in the Hanoi Capital region, Ho Chi Minh City Vi, etc.
3. The Ministry of Transport has planned to speed up the construction of three essential transport projects: the Dau Giay—Tan Phu Expressway, the Cho Moi—Bac Kan Expressway, and the Lo Te—Rach Soi Expressway in 2024.

Surge in Investment in the Renewable Energy Sector

1. According to the Institute of Energy of Vietnam (IEV), Vietnam faces a surge in power demand and consumption over the coming decade. The Government of Vietnam expects power consumption to grow 10-12 % annually by 2030. Therefore, the government increases its focus on renewable energy resources to fulfill the growing power demand.
2. According to the World Bank, Vietnam has a high potential to generate solar energy; in 2023, the country generated 17,000 megawatts (MW) of solar energy, which is expected to grow in 2024 due to various government initiatives to provide tax benefits and subsidies for installing solar power generation units.

INDUSTRY RESTRAINTS

Vietnam Currency Depreciation Impacts Imports

1. Vietnam completely relies on the import of construction equipment, including crawler excavators from China, Japan, Korea & US. In 2024, the exchange rate constantly increased, thereby impacting the country’s imports.
2. Since the beginning of 2024, Vietnam's currency has depreciated by 4.9% compared to USD. The depreciation of the region’s currency makes imports costly and can negatively impact the demand for crawler excavators.
3. Various global disruptions, including the Israel-Hamas war, impacted oil prices, inflationary pressures, interest rate hikes, and supply chain disturbances. These challenges are impacting 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 Vietnamese currency.

Skilled Labor Shortage Hampering the Industry’s Growth

1. In 2023, there was a surge in iron and steel prices in the Vietnam market. The prices of building materials, including iron and steel, increased by 30% to 40%, pushing the country's overall cost of real estate projects up. Construction materials, such as asphalt, increased by 9% to 10%, and cement prices increased by 3-5% in the region’s market in 2023.
2. Increasing building material prices raise real estate prices, adversely impacting the demand for low-income people. The sharp increase in building material prices is due to a mismatch between demand and supply. The demand for building materials increased exponentially in 2023 due to rising government investment in infrastructure and housing projects across the country.
3. The price of construction projects increased by 30-35% in 2023, hampered project completion on scheduled time due to cash crunches. Some contractors were forced to stop construction and switch to construction of non-steel materials such as wood, etc.

VENDOR LANDSCAPE

1. Caterpillar, Kobelco, SANY, Hitachi Construction Machinery, and Komatsu are leaders in the Vietnam crawler excavator market. These companies have strong market share and offer diverse sets of equipment.
2. Kubota, Liu Gong, Yanmar, JCB, Airman, and Bobcat are niche players in the Vietnam crawler excavator market. These companies offer low product diversification and have a strong presence in the local Vietnamese market.
3. Volvo Construction Equipment, SDLG, Zoomlion, Yuchai, John Deere Hyundai Construction Equipment, and XCMG are emerging in the Vietnam 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. Sumitomo, Shantui, Wacker Neuson, and Develon are stragglers in the Vietnam crawler excavator market. These companies generally lack innovative and advanced product technology compared to competitors.