Indonesia Construction Equipment Market - Strategic Assessment & Forecast 2025-2030

The Indonesia construction equipment market is expected to grow at a CAGR of 4.12% from 2024 to 2030.

IMPACT OF TARIFF

• The Indonesia construction equipment market is moderately affected by tariffs. Several Japanese brands, such as Komatsu and Hitachi, have local manufacturing facilities in Indonesia.
• The country has low dependence on imported raw materials like steel, aluminium, and rubber from the U.S. market. However, American brands like Caterpillar also hold a strong market presence in Indonesia. The prices of imports from these American brands have increased due to the impact of tariffs.
• Indonesia decided to buy more American products, such as liquefied petroleum gas and wheat, as well as cut its non-tariff barriers so that the US would not apply a 32% tariff on Indonesia's exports, which include electronics, apparel, and footwear, in 2025.

KEY HIGHLIGHTS

• Earthmoving equipment accounted for the largest market share in the Indonesia construction equipment market in 2024. Excavators in the earthmoving segment accounted for the largest share in 2024. The country's investment in renovating its public infrastructure drives the growth of the Indonesian earthmoving industry.
• In 2024, the market for 4.5-ton excavators was the second largest after 20-ton excavators in Indonesia.
• There are some major distributors of construction equipment in the country's construction equipment market, including United Tractors, PT Hexindo Adiperkasa, Intraco Penta, and Traktor Nusantara.
• OEMs in Indonesia are adopting electric and hydrogen fuel technology:
• Komatsu develops hydrogen fuel cell excavators with Toyota systems for the Southeast Asian market, including Indonesia.
• Volvo launched the ECR25 electric compact excavator, L25 electric compact wheel loader, and EC55 electric mini excavator in 2024.
• In 2023, Komatsu also launched the HB365-1 hybrid excavators in the Indonesian industry.
• In June 2021, Hitachi Construction Machinery addressed cost and turnaround challenges by establishing a parts remanufacturing plant in Indonesia. This facility eliminates the need to transport large- and medium-sized hydraulic excavators to Japan for remanufacturing.
• Demand for earthmoving equipment is strongest in the Indonesia construction equipment market. Excavators & wheel loaders are the most used construction equipment in the industry. Dump trucks and Concrete mixers also witnessed strong demand in 2024.
• With a rise in investment in public infrastructure, sales of material handling equipment such as cranes and forklifts are expected to grow at a robust pace during the forecast period.

INDONESIA CONSTRUCTION EQUIPMENT MARKET TRENDS & DRIVERS

Use of Environment-Friendly Fuels

• Concerns over environmental issues led the Indonesian government to aim for carbon neutrality by 2060, driving the need for electric construction machinery. The demand for environment-friendly construction equipment is increasing, especially to support sustainable projects, such as green infrastructure development, renewable energy, and environmental rehabilitation.
• Construction equipment manufacturers now focus on alternative fuels such as hydrogen, electricity, or hybrid solutions. The demand for construction equipment that can operate in environmentally sensitive areas, such as protected forests or conservation areas, is expected to grow in the coming years.
• Major construction equipment manufacturers, such as Volvo Construction Equipment, SDLG, and XCMG, launched electric and compact mini excavators in Indonesia to tackle the growing industry demand.

Digitalization & Adoption of Latest Technology

• There is growing adoption of the latest technologies in the Indonesia construction equipment market. The use of innovative technologies such as IoT, artificial intelligence (AI), and automation is gradually being applied, especially in modern construction equipment. This technology allows manufacturers to monitor equipment performance in real-time, prevent equipment downtime with predictive maintenance systems, and improve their operational efficiency.
• In addition, automated construction equipment, such as automated excavators or loaders, has been introduced in several large projects. These machines not only increase productivity but also increase operator safety. The use of digital technology generates new opportunities in construction equipment fleet management, allowing manufacturers to maximize the use of their assets.

Growing Investments in National Infrastructure Projects

• The Indonesian government plans to invite global investors to participate in a national infrastructure project worth close to USD 12.3 billion, with investment opportunities in roads, housing, food, and renewable energy sectors.
• The government is inviting foreign investors for investment in 46 projects, which also include major toll road development projects.
• Growing government investment in the national strategic project is expected to drive the Indonesia construction equipment market. The national strategic program includes the construction of toll roads, ports, airports, and various other public facilities that require construction equipment at every stage of construction.

Surge in Use of Construction Equipment in Mining & Energy Sectors

• Indonesia is one of the leading exporters of coal, nickel, and other minerals. These mining activities rely on construction equipment for various processes, such as excavation, loading, and transportation. A surge in the global demand for nickel and other rare earth minerals, which are used for manufacturing EV batteries, is expected to drive the Indonesia construction equipment market.
• In Q1 2025, Indonesia attracted nearly USD 13.6 billion of foreign direct investment, marking a 12.7% increase in FDI inflow in Q1 2024. Investors have strong confidence in strategic sectors such as mining, metal smelting, infrastructure, and logistics.

INDUSTRY RESTRAINTS

Volatile Commodity & Building Material Prices

• The mining industry is one of the largest consumers of construction equipment in the Indonesian industry. The demand for large construction equipment is strongest in the mining industry. However, the mining and energy sectors are sensitive to fluctuations in prices of commodities such as coal, nickel, and other minerals.
• The decline in commodity prices negatively impacts mining activities, which directly influences the growth of the Indonesia construction equipment market. Also, low commodity prices impact mining companies' income, resulting in a decline in demand for new construction equipment for mining projects.
• Surge in prices of building materials, such as cement, steel, and asphalt, fluctuates due to global market instability and inflation.

Implementation of VAT & Heavy Equipment Tax

• The Indonesian government planned to implement a 12% VAT and a heavy equipment tax in 2025, which is expected to negatively impact the Indonesia construction equipment market. The impact of these two tax policies is expected to increase costs for construction equipment.
• Regional governments will determine the heavy equipment tax rate through a regional regulation. For example, a 20-ton excavator selling for 0.11 million will now cost USD 0.22 million due to a tax increase.
• Currently, several provinces such as DKI Jakarta, West Java, and Central Java have started implementing the heavy equipment tax.

VENDOR LANDSCAPE

• Komatsu, Volvo CE, Hitachi Construction Machinery, SANY, and Caterpillar are the front-runners in the Indonesia construction equipment market. These companies have strong market share and offer diverse sets of equipment in the Indonesian industry.
• Yanmar, Kubota, Manitou, Liu Gong, Takeuchi, and Toyota Material Handling are niche players in the Indonesia construction equipment market. These companies offer low product diversification and have a strong presence in the country's market.
• JCB, Kobelco, Sumitomo, HD Hyundai Construction Equipment, CNH Industrial N.V., XCMG, and Zoomlion are emerging in the Indonesia construction equipment market. These companies are introducing new technologically advanced products to challenge the share of market leaders in the country's market.
• Kato Works, Liebherr, Terex, and Sakai have low product diversification in the Indonesia construction equipment market; these companies are lagging in adopting new technologies used in construction equipment.

Prominent Vendors

• Caterpillar
• Komatsu
• Volvo Construction Equipment
• Hitachi Construction Machinery
• Liebherr
• SANY
• Xuzhou Construction Machinery Group Co. Ltd. (XCMG)
• JCB
• Kobelco
• Zoomlion Heavy Industry Science & Technology Co. Ltd
• Hyundai Construction Equipment

Other Prominent Vendors

• Kubota
• CNH Industrial
• Yanmar
• LiuGong
• SAKAI HEAVY INDUSTRIES, LTD
• Takeuchi
• Toyota Material Handling
• Manitou
• Sumitomo Construction Machinery
• KATO WORKS CO., LTD.
• Terex Corporation
• Toyota Material Handling International

Distributor Profiles

• PT Indotruck Utama
• United Tractors
• Multicrane Perkasa
• PT. Airindo Sakti
• PT. Badak Prima Lestari
• PT. United Equipment Indonesia

Segmentation by Type

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

KEY QUESTIONS ANSWERED:

1. How big is the Indonesia construction equipment market?

2. What is the growth rate of the Indonesia construction equipment market?

3. Who are the key players in the Indonesia construction equipment market?

4. What are the trends in the Indonesia construction equipment market?

5. Which are the major distributor companies in the Indonesia construction equipment market?