Manufacturing Competitiveness in ASEAN to Unveil New Production and Sales Opportunities for Asia Pacific Ground Engaging Tools Market during 2021–2028
According to our latest market study on “Asia Pacific Ground Engaging Tools Market Forecast to 2028 – COVID-19 Impact and Regional Analysis– by Application, Tools Type, and End-Use,” the market is expected to grow from US$ 668.86 million in 2021 to US$ 1,496.46 million by 2028; it is estimated to register a CAGR of 10.4% from 2021 to 2028.
The Association of Southeast Asian Nations (ASEAN) comprises Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam. With a sole focus on economic integration, ASEAN nations are preparing for the expansion of their manufacturing bases and production facilities across various industry verticals. This provides significant growth opportunities for the manufacturers operating in the Asia Pacific ground engaging tools market. A recent study revealed that 19% of businesses in the ASEAN nations are strategically planning to shift their investments from China into their own country. Indonesia leads in the aspect of a lucrative region for new business expansion, followed by Vietnam, Thailand, and Myanmar. Moreover, Cambodia, Indonesia, Laos, and Vietnam benefits from a competitive advantage due to the availability of low-cost labor. This is also anticipated to provide lucrative growth opportunities for the Asia Pacific ground engaging tools market.
Many manufacturing firms in ASEAN are still lagging in technological awareness and required skill sets. However, they have gradually started to embrace technologies such as Big Data and the Internet of Things to improve their manufacturing capabilities. ASEAN hosts a dynamic range of economies with various stages of development, which offers a diverse investment landscape to ground engaging tools manufacturers and suppliers in Asia Pacific. As cost optimization is crucial for ground equipment tool makers, countries such as Cambodia and Myanmar are anticipated to offer increased economic liberalization in manufacturing in the coming years. Thailand is estimated to attract manufacturing foreign direct investment (FDI) because of its strong quality index and a well-established automotive manufacturing ecosystem with tiered auto components suppliers. Growing local infrastructure projects are anticipated to boost the demand for construction equipment in Indonesia. There is an increased demand for machinery and attachment tools for the growing agriculture and forestry activities in the Philippines and Vietnam. Therefore, sufficient local demand in ASEAN is anticipated to attract significant investment to boost the Asia Pacific ground engaging tools market in the coming years.
Impact of COVID-19 Pandemic on Asia Pacific Ground Engaging Tools Market
The equipment sales required in the construction, mining, and forestry industries declined due to labor shortages, supply chain disruptions, and higher interest rates in 2020. Due to inflation, there has been an 11.7% Y-o-Y increase in farm machinery prices. However, farm income increased regardless of the limited government support and increased production costs. Manufacturers are implementing various potential strategies and measures for addressing economic challenges; they have been focusing on their marketing efforts and outsourcing operations to overcome the challenges posed by the COVID-19 pandemic. With the recovery of the overall economy of Asia Pacific from the adverse effects of the COVID-19 pandemic, the agriculture & construction equipment industries are anticipated to recover in the coming years. Furthermore, with the gradual normalization of the demand for construction equipment and improvement of conditions in supply chains, the Asia Pacific ground engaging tools market is anticipated to revive its growth during the forecast period.
The Association of Equipment Manufacturers (AEM) estimates a stronger demand from the construction equipment industry than expected in 2021. In 2020, the discontinuation of several infrastructure projects hampered the growth of the Asia Pacific ground engaging tools market, specifically in China and India. However, with the mitigation of the adverse effects of the COVID-19 crisis, OEMs are evaluating long-term supply chains to ensure rapid market recovery. Large mining companies are installing OEM bucket teeth and adaptors; and they are sourcing matching bucket teeth from suppliers to fit these adaptors. The use of ground engaging tools is anticipated to rise in remote mining sites in Australia and at many large and small sites in Indonesia, which will propel the Asia Pacific ground engaging tools market growth in the coming years.
The report segments the Asia Pacific ground engaging tools market as follows:
The Asia Pacific ground engaging tools market is segmented on the basis of application, tools type, and end-use. Based on application, the market is categorized into excavators, loaders, bulldozers, and others. Based on tools type, the Asia Pacific ground engaging tools market is segmented into bucket teeth, adapters, lips shrouds, side cutter, ripper shanks, and others. Based on end-use, the market is categorized into construction, mining, and others.
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