Malaysia Construction Equipment Industry Report 2024: Strategic Market Assessment & Forecasts 2023-2029 - ResearchAndMarkets.com

The "Malaysia Construction Equipment Market - Strategic Assessment & Forecast 2024-2029" report has been added to ResearchAndMarkets.com's offering.

The Malaysia construction equipment market by volume is expected to reach 11,938 units by 2029 from 9,076 units in 2023, growing at a CAGR of 4.67% from 2023 to 2029

Earthmoving equipment accounted for the largest market share in the Malaysia 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 Malaysia construction equipment market.

By rapidly expanding into Southeast Asia, Chinese construction machinery brands are shifting from only product exports to localized operations. Prominent vendors like Zoomlion and SANY have recently inaugurated subsidiaries in Malaysia, Vietnam, and the Philippines, emphasizing their commitment to local development.

A fleet of 10 EC550EL excavators from Volvo Construction Equipment (Volvo CE) is constructing a significant new dairy farm for Fraser & Neave Holdings (F&N) in Gemas, Negeri Sembilan, Malaysia. The F&N Agrivalley project, which began in August 2023 and is scheduled for completion in 2027, will span over 2,726 hectares and cost USD 200 million.

Malaysia has become a key country for growth in the Southeast Asian market, with the number of mobile elevated work platforms (MEWPs) in recent years beginning to compete with those in Singapore, its nearby and well-established access market.

A distinguishing feature of the Malaysian access equipment sector is its longstanding reliance on truck-mounted platforms. Truck mounts have been prevalent in the Malaysia construction equipment market for a considerable period, preceding the widespread adoption of scissor lifts and boom lifts, and are utilized across various applications.

Zoomlion Malaysia has introduced a 3D digital twin platform tailored for the ready-mix concrete industry. This platform allows users to create digital replicas of concrete plants, enabling remote monitoring, predictive maintenance, and optimization of operations. The launch underscores Zoomlion's commitment to leveraging digital technologies to enhance efficiency and productivity in the concrete industry.

MARKET TRENDS & DRIVERS

Investments Under the National Energy Transition Roadmap (NETR) to Boost the Renewable Energy Sector

• The National Energy Transition Roadmap (NETR) targets a significant rise in Malaysia's renewable energy capacity, aiming for 40% by 2035 and 70% by 2050. However, there's a need for advancement. According to the International Renewable Energy Agency (IRENA), as of 2022, Malaysia's renewable energy constituted 23% of the total installed capacity.
• The National Energy Transition Roadmap (NETR) has outlined ten flagship projects to drive Malaysia's energy transition, showcasing necessary technologies and solutions.

Rising Focus on Compact and Electric Construction Equipment in the Malaysia Construction Equipment Market

• The electric equipment market is anticipated to be driven by government initiatives, growing demand for eco-friendly construction projects, and the trend toward industrialization. However, a significant challenge is the substantial cost linked to electric construction machinery, which might impede market growth.
• 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.

Environmental Policies and Initiatives to Boost the Malaysia Construction Equipment Market in the Waste Management Industry

• Malaysia generates over 39,000 tons of municipal solid waste daily, averaging about 1.17 kg per person. Food waste constitutes a significant part of this total, accounting for more than 30%, with an estimated 8.3 million metric tons of food discarded annually. This concerning level of waste is driven by factors such as population growth, changing lifestyles, and rapid urbanization.
• Malaysia's existing waste management system predominantly depends on landfills, with more than 165 currently in operation. However, this approach is increasingly becoming unsustainable due to limited land availability and the high expenses associated with maintaining these landfills.

The New Industrial Master Plan 2030 (NIMP 2030) Will Boost Infrastructure Investments Across the Region

• Malaysia plans to allocate approximately USD 1.8 billion to fund its NIMP 2030. This initiative aims to transform the country's manufacturing sector into a high-tech, competitive, and digitally advanced industry. The initiative is also projected to support the growth of the Malaysia construction equipment market.
• The plan includes four key missions: advancing economic complexity, embracing digital technologies, achieving net-zero carbon emissions, and ensuring economic security and inclusivity.

High Expenditure in Green Hydrogen Projects to Encourage the Malaysia Construction Equipment Market Growth

• Malaysia announced agreements worth USD 4.2 billion for green hydrogen projects for 2024. These projects, led by SEDC Energy, include the H2biscus and H2ornbill initiatives to produce large quantities of green hydrogen for export to South Korea and Japan. Both projects will utilize hydropower and are expected to begin production in 2027. Additionally, a partnership with Gentari, a subsidiary of Petronas, will develop a common infrastructure for these projects.

Increasing Investments in Semiconductor Industry

• This initiative includes developing advanced packaging and integrated circuit design facilities, fostering local talent, and offering incentives to international companies. Malaysia seeks to become a key player in the global semiconductor supply chain, providing a stable alternative to the U.S. and China.
• Moreover, Siliconware Precision Industries Co., Ltd. (SPIL), a global leader in semiconductor packaging and testing, has commenced construction of its Malaysia P1 plant at Bandar Cassia Technology Park in Penang. The 8-hectare facility, with an investment of USD 1.2 billion, is anticipated to generate nearly 3,000 skilled jobs over the next 15 years.

INDUSTRY RESTRAINTS

Increased Pressure on the Ringgit Will Hamper Foreign Investment Opportunities

• In 2023, the Malaysian ringgit experienced a notable drop of 9.6% against the U.S. dollar, influenced by the increasing differences between domestic and U.S. bonds. Additionally, the ringgit depreciated by 3.9% nominally and 4.7% in real effective terms relative to the currencies of its major trading partners. This decline was caused by a decrease in the current account surplus, largely due to a decreasing trade surplus and significant net capital outflows.
• Net capital inflows experienced a sharp decline, with domestic investments abroad rising while foreign investments in the country, including both FDI and portfolio investments, decreased.

Skilled Labour Shortage in the Country Hampers the Pace of Construction Equipment Manufacturing

• Despite a recent agreement to resume hiring Bangladeshi workers, bureaucratic delays have exacerbated the problem, threatening Malaysia's economic recovery. Manufacturers, particularly in sectors such as oil and semiconductors, are losing sales and customers due to the lack of workforce.
• Although Malaysia's semiconductor market is booming, the government reports a severe talent shortage and needs 50,000 skilled engineers. Also, Malaysian universities produce only about 5,000 engineers annually, leaving a considerable shortage of local engineers.

Rising Raw Material and Construction Costs in the Country

• Construction costs are projected to increase by an average of 15% in the first half of 2024, exacerbating the affordability issue and potentially negatively impacting the housing market.
• The rising Producer Price Index (PPI) inflation of 1.9% year-on-year in April 2024 indicates increased cost pressures for local businesses, driven by fluctuations in global commodity prices, subsidy rationalization, and rising fuel prices.
• In April 2024, the manufacturing sector experienced a faster rise in input costs at 0.8% year-on-year (y-o-y), compared to 0.6% y-o-y in March. The mining sector saw a significant inflation increase to 10.0% y-o-y, the highest in 22 months, up from 8.3% y-o-y in March. Electric, gas, and water supply costs also expanded by 1.0%, the highest in 10 months, following a modest 0.1% y-o-y rise in the previous two months.

VENDOR LANDSCAPE

• Caterpillar, Volvo CE, SANY, Komatsu, Kobelco, XCMG, Hitachi Construction Machinery, and Zoomlion are leaders in the Malaysian construction equipment market. These companies have a strong market share and offer diverse equipment.
• JLG, Bomag, Sunward, LiuGong, SDLG, Shantui, Terex, HELI, Takeuchi, Toyota Material Handling, and CNH Industrial are niche players in the Malaysia construction equipment market. These companies offer limited product diversification and have a strong presence in the country's local market.
• Liebherr, JCB, DEVELON, Bobcat, Manitou, HD Hyundai Construction Equipment, Kubota, and Sumitomo are emerging in the Malaysia construction equipment market. These companies are introducing new technologically advanced products to challenge the market share of the country's market leaders.
• Lonking, GEHL, AUSA, Yanmar, Ammann, SAKAI, Tadano, Wacker Neuson, Bell Equipment, Kato Works, Manitowoc, and Favelle Favco have low product diversification in the Malaysian construction equipment market, and they are lagging in adopting new technologies.

Key Attributes:

Key Vendors

• Caterpillar
• Komatsu
• Xuzhou Construction Machinery Group Co. Ltd. (XCMG)
• SANY
• Zoomlion Heavy Industry Science&Technology Co., Ltd.
• Volvo Construction Equipment
• Hitachi Construction Machinery
• Liebherr
• DEVELON
• HD Hyundai Construction Equipment
• Kobelco
• JCB
• Kubota
• Manitou
• Bobcat
• SUMITOMO CONSTRUCTION MACHINERY CO., LTD.

Other Prominent Vendors

• CNH Industrial
• LiuGong
• Sunward Intelligent Equipment Group
• Takeuchi Manufacturing
• Yanmar
• Terex Corporation
• Bomag
• Tadano
• KATO WORKS CO., LTD.
• Toyota Material Handling
• AMMANN
• AUSA
• Wacker Neuson
• The Manitowoc Company, Inc.
• Shantui Construction Machinery Co., Ltd.
• Anhui Heli Co. Ltd
• SAKAI HEAVY INDUSTRIES, LTD.
• Shandong Lingong Construction Machinery (SDLG)
• JLG
• Bell Equipment
• GEHL
• Lonking
• Favelle Favco

Distributor Profiles

• Sunway Marketing Sdn. Bhd.
• FHM Equipment Sdn Bhd
• UMW Equipment Sdn. Bhd
• TCIM
• UM Construction Equipment Sdn Bhd
• WDG Resources Sdn Bhd.
• KS Kim Sui Engineering Sdn Bhd
• Multico (M) Sdn Bhd

Segmentation by Type

Earthmoving Equipment

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

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)

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