Indonesia heavy equipment industry: construction is the only positive sector

June 20, 2016,

Sales in the construction sector rose from 30 percent as of January-March 2015 to 48 percent as of January-March 2016

Falling demand for heavy equipment has resulted in a significant drop in sales. In the first quarter of 2016, sales in almost in all sectors recorded negative growth with the remarkable exception of the construction sector.

As of March 2016, United Tractors, carrying Komatsu products, is the market share leader in the domestic market of heavy equipment with 34 percent, followed by Hitachi (20 percent), Caterpillar (16 percent), Kobelco (15 percent) and other brands (15 percent). From January to March 2016, Komatsu sold only 499 units, a 35 percent decrease from the same period of last year, which saw the sale of 763 units. The largest degree of negative growth took place in the forestry and mining sectors, suffering a 58 percent and 59 percent decrease, respectively (Source: The Jakarta Post).

The data also shows that sales in the construction sector rose from 30 percent as of January-March 2015 to 48 percent as of January-March 2016. In the last few years, demand for heavy equipment in the construction sector has increased as the government’s infrastructure projects have started to kick in.

With the issuance of a related decree in 2015, imposed since March 31 of this year, heavy equipment is now categorized as a non-motor vehicle. Various businesses in construction, plantations, and ports using heavy equipment are now relieved from the many taxes generally imposed on motor vehicles. Hope also arises from heavy equipment manufacturers. Jamaludin, chairman of the Association of Indonesian Industrial Heavy Equipment (Hinabi), has welcomed the decree and hopes that it will relieve consumers in Indonesia and drive demand.

To learn more and meet the players that shape the construction industry, visit Concrete Show South East Asia in Jakarta during 14-16 September 2016. The leading business event and learning platform for the Concrete and Construction Industry in South East Asia – organized by UBM – gathers over 200 companies from 28 countries which share technology, insight and create real growth opportunities for Indonesia and the region.

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