New Delhi, August 12, 2016
How the Philippines Excavator Market Is Positioned?
The excavator market in Philippines has witnessed overall high growth from 2010 to 2015, however year 2014 witnessed the decline. Excavator use is observed to be low in the Philippines compared to many developing economies and market is undergoing development phase. Entire sales market was dominated by approximately ten players with major revenue share of ~% held by two players in 2015. Entire Philippines excavator market is valued at USD ~ million recording a CAGR of ~% in 2010-2015. Most players 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 of excavator sale in Philippines.
Market size by volume for new excavator sales in the Philippines was nearly ~ units in 2015. Manila constituting nearly ~% of total excavator sales in 2015 lead the market in sales by region. Crawler types of excavators were in maximum demand accounting for ~% sale in 2015. Construction and mining sector are major consumers of excavators and any positive development in these sectors directly promotes the rental and sales of excavators. In recent decade, the government of the Philippines launched various projects to improve the neglected infrastructure sector and to ensure that its economy continues to grow.
Market size by volume for new excavator sales in the Philippines was nearly ~ units in 2015, accounting for sales revenue of approximately USD ~ million. Rental excavator market in the Philippines had witnessed presence of few large players and many small players.
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 hold the 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 helped the segment in gaining dominant position.
In 2015, Manila accounted for maximum of sales constituting nearly ~% of total excavator sales in the Philippines. Most of major companies who use excavators in their portfolio have their head offices in Manila. These companies place their order through exclusive dealer of Manila branches accounting for maximum of sales from Manila constituting nearly ~% 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 like Hyundai, Volvo, Caterpillar and others. Total sales revenue generated from sale of excavators is USD ~ million in 2015 with ~% market share by revenue coming from leading player. Total sales volume in number of units is ~ in 2015. Sales revenue recorded positive growth at a CAGR of ~% from 2010 to 2015. However, in 2014, excavator sales reported decline on account of reduced construction growth and falling mining commodity demand from China. Growth in sales is expected to be driven by increased investment in infrastructure and real estate. It is also expected that rental market will grow at much higher rate, thus creating additional sales demand. Sales market is expected to grow at CAGR of ~% in 2016-2020. Sale of Medium category excavator will continue its dominance but share of compact excavators is expected to rise. Sale of wheel type excavator is also expected 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 the Philippines are also in rental market business. Some of the giant players operating in the excavators market area also observed to hold a significant share in the excavator rental companies. These companies generally have a fleet size of more than 70 excavators. These companies offer wide variety of excavators as compared to independent rental companies, which help them in gaining dominant position. Many small rental companies are also operating in the Philippines rental excavator market with majority of them offering compact and low powered medium excavators. Excavator rental market generated revenue of USD ~ million in 2015 recording CAGR of ~% in between 2010 2015. The market is expected to grow at a value of USD ~ million with its share in total revenue increasing from ~% in 2015 to ~% in 2020.
The Decision Making Process to Purchase or rent in the Philippines excavator market
Tenure of job is estimated as the most important deciding factor for purchasing excavators in the Philippines. Companies with sound financials prefer to buy rather than rent, 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, operation and maintenance cost, availability of service staff, cost of machine, warranty and resale value. Decision to rent a machine is primarily driven by usage time period, availability of machine with desired operating characteristic and rental terms and conditions including rent. Mining companies generally buy their machines and go under exclusive tailor made maintenance programs to reduce downtime. They rent only for specific use or for short periods. Majority of rental comes from small contractors who hire from small rental companies.
Issues, challenges and growth drivers for the philippines excavator market
Major problem associated with excavator market in the Philippines is absence of any local player; no manufacturer has set up an excavator manufacturing unit in the Philippines owing to very low demand. Dependence on import exposes the industry to external factors which may affect availability and prices in case of external shock. Being an island nation is other problem associated with excavator sale and availability as shipping takes more time and it is tedious mode of transport. Availability of restricted number of models in ready stock further adds to the problems of consumers and suppliers in the Philippines excavators market.
Construction and mining sector are major consumers of excavators and any positive development in these sectors directly promotes the rental and sales of excavators.
New environmental regulation by the government and commitment to reduce GHG emission by 70.0% of current level is also expected to attract many other projects in energy and industry sector, boosting the use of excavators. Stable credit rating from credit rating agencies shows that government bonds will be stable which is symbol of good growth and development and political stability in country. This has positive impact on 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. These companies are offering wide variety of products and services to the customers.
Hyundai Heavy Machineries was a leading player in the Philippines excavators market with revenue share of ~% in 2015.Trust factor associated with the company is the major factor which has led to the growth of the market. The company has generated revenue of USD ~ Million in 2015 in overall Philippines excavator sales market
Volvo Construction Equipment is the second largest player in the Philippines with the revenue generation of USD ~ Million. The company has a strong brand name in the Philippines. Volvo is majorly focusing on innovation and research to introduce new innovative 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 ~ Million in 2020, growing at a CAGR of ~% during the period. The market will be driven by the increased investment in infrastructure development by government to sustain high GDP growth especially in land air transport. Growth in services and manufacturing sector has led to the rise of demand for office space and housing facilities with major demand coming in cities like Manila, Cebu, Cagayan de Oro, Surigao and others. New environment regulatory norms are expected to phase out old machine creating additional demand for replacement. Being island nation tourism is expected to grow creating demand for extra hotels rooms and related facilities which will increase demand for construction machinery including excavators.
In future, it has been anticipated that the excavator sales market in the Philippines will continue 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.
Corporate Comm India(CCI Newswire)
