Philippines Excavator Market Forecast to 2020 – Growing Construction Activities and Demand for Real Estate to Shape Future Potential: Ken

Research

How the Philippines Excavator Market Is Positioned?The excavator market in Philippines has witnessed overall high growth from 2010 to2015, however year 2014 witnessed the decline. Excavator use is observed to be low inthe Philippines compared to many developing economies and market is undergoingdevelopment phase. Entire sales market was dominated by approximately ten playerswith major revenue share of ~% held by two players in 2015. Entire Philippinesexcavator market is valued at USD ~ million recording a CAGR of ~% in 2010-2015. Mostplayers are offering nearly similar product but it is brand value, better service network,value added services and presence of exclusive dealers, which is driving the growth ofexcavator sale in Philippines.

Market size by volume for new excavator sales in the Philippines was nearly ~ units in2015. Manila constituting nearly ~% of total excavator sales in 2015 lead the market insales by region. Crawler types of excavators were in maximum demand accounting for~% sale in 2015. Construction and mining sector are major consumers of excavatorsand any positive development in these sectors directly promotes the rental and sales ofexcavators. In recent decade, the government of the Philippines launched variousprojects to improve the neglected infrastructure sector and to ensure that its economycontinues to grow.

Market size by volume for new excavator sales in the Philippines was nearly ~ units in2015, accounting for sales revenue of approximately USD ~ million. Rental excavatormarket in the Philippines had witnessed presence of few large players and many smallplayers.

The Philippines excavator market is also segmented based on engine rated power.Excavators with engine rated power in range of 75-300hp have been recorded to holdthe highest market share of ~%, by value in 2015. The belonging of the Philippines’bestselling 20 ton operating capacity model excavator to 75-300hp segment has helpedthe segment in gaining dominant position.

In 2015, Manila accounted for maximum of sales constituting nearly ~% of total excavatorsales in the Philippines. Most of major companies who use excavators in their portfoliohave their head offices in Manila. These companies place their order through exclusivedealer of Manila branches accounting for maximum of sales from Manila constitutingnearly ~% of total excavator sales in the Philippines.

How Sales Markert of New Excavators are Performing?Philippines excavator sales market is dominated by some of the leading global players likeHyundai, Volvo, Caterpillar and others. Total sales revenue generated from sale ofexcavators is USD ~ million in 2015 with ~% market share by revenue coming from leadingplayer. Total sales volume in number of units is ~ in 2015. Sales revenue recorded positivegrowth at a CAGR of ~% from 2010 to 2015. However, in 2014, excavator sales reporteddecline on account of reduced construction growth and falling mining commodity demandfrom China. Growth in sales is expected to be driven by increased investment ininfrastructure and real estate. It is also expected that rental market will grow at muchhigher rate, thus creating additional sales demand. Sales market is expected to grow atCAGR of ~% in 2016-2020. Sale of Medium category excavator will continue its dominancebut share of compact excavators is expected to rise. Sale of wheel type excavator is alsoexpected to increase as urbanization increases.

What is Potential of Rental Market for Excavators in the Philippines?Most of the exclusive dealers of major brands in excavator sales market in thePhilippines are also in rental market business. Some of the giant players operating in theexcavators market area also observed to hold a significant share in the excavator rentalcompanies. These companies generally have a fleet size of more than 70 excavators.These companies offer wide variety of excavators as compared to independent rentalcompanies, which help them in gaining dominant position. Many small rentalcompanies are also operating in the Philippines rental excavator market with majority ofthem offering compact and low powered medium excavators. Excavator rental marketgenerated revenue of USD ~ million in 2015 recording CAGR of ~% in between 20102015. The market is expected to grow at a value of USD ~ million with its share in totalrevenue increasing from ~% in 2015 to ~% in 2020.

The Decision Making Process to Purchase or rent in the Philippines excavator marketTenure of job is estimated as the most important deciding factor for purchasingexcavators in the Philippines. Companies with sound financials prefer to buy rather thanrent, if tenure of job is long enough. SME’s on other hand, prefer to rent.

Other factors influencing the purchasing decision are brand value and usage, operationand maintenance cost, availability of service staff, cost of machine, warranty and resalevalue. Decision to rent a machine is primarily driven by usage time period, availability ofmachine with desired operating characteristic and rental terms and conditions includingrent. Mining companies generally buy their machines and go under exclusive tailormade maintenance programs to reduce downtime. They rent only for specific use or forshort periods. Majority of rental comes from small contractors who hire from smallrental companies.

Issues, challenges and growth drivers for the philippines excavator marketMajor problem associated with excavator market in the Philippines is absence of anylocal player; no manufacturer has set up an excavator manufacturing unit in thePhilippines owing to very low demand. Dependence on import exposes the industry toexternal factors which may affect availability and prices in case of external shock. Beingan island nation is other problem associated with excavator sale and availability asshipping takes more time and it is tedious mode of transport. Availability of restrictednumber of models in ready stock further adds to the problems of consumers andsuppliers in the Philippines excavators market.

Construction and mining sector are major consumers of excavators and any positivedevelopment in these sectors directly promotes the rental and sales of excavators.

New environmental regulation by the government and commitment to reduce GHGemission by 70.0% of current level is also expected to attract many other projects inenergy and industry sector, boosting the use of excavators. Stable credit rating fromcredit rating agencies shows that government bonds will be stable which is symbol ofgood growth and development and political stability in country. This has positive impacton sale of excavators as it leads to increased investment in country.

How is the Competition Structured IN THE Philippines Excavator MARKET for sales?Philippines excavator market is dominated by few large multinational players. Thesecompanies are offering wide variety of products and services to the customers.Hyundai Heavy Machineries was a leading player in the Philippines excavators marketwith revenue share of ~% in 2015.Trust factor associated with the company is the majorfactor which has led to the growth of the market. The company has generated revenueof USD ~ Million in 2015 in overall Philippines excavator sales market.

Volvo Construction Equipment is the second largest player in the Philippines with therevenue generation of USD ~ Million. The company has a strong brand name in thePhilippines. Volvo is majorly focusing on innovation and research to introduce newinnovative products as well as to offer rental services in the country.

What are the Future Prospects of the Philippines Excavtor market?Philippines Excavator Market will increase from USD ~ Million in 2015 to USD ~ Millionin 2020, growing at a CAGR of ~% during the period. The market will be driven by theincreased investment in infrastructure development by government to sustain high GDPgrowth especially in land air transport. Growth in services and manufacturing sector hasled to the rise of demand for office space and housing facilities with major demandcoming in cities like Manila, Cebu, Cagayan de Oro, Surigao and others. Newenvironment regulatory norms are expected to phase out old machine creatingadditional demand for replacement. Being island nation tourism is expected to growcreating demand for extra hotels rooms and related facilities which will increasedemand for construction machinery including excavators.

In future, it has been anticipated that the excavator sales market in the Philippines willcontinue its dominance but share of rental will increase from ~%in 2015 to ~% in 2020.Overall market for excavator is expected to be USD ~ million in 2020.

Key Factors Considered in the Report•Philippines Excavator Market size by Revenue, and Sales Volume•How the contract agreement works in Rental of Philippines Excavator Market andfuture outlook?•Decision Making Process for Purchasing and Renting Excavator in the Philippines.•Pricing Analysis for Rental and Sales of Excavators in Philippines•Competitive Landscape of Major Players in the Philippines Excavators Market

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