Editor’s Note: For a brief period from Feb. 8 – 12, I visited the Indonesian capital, Jakarta, and conducted interviews with several people involved in the construction equipment industry. Here is a summary of the country and the stories I heard from industry experts.
Country Profile: Population 280 million, median age 29.7, and 90% of the population is Muslim. Comprises over 17,000 islands. The current capital is Jakarta, but due to worsening problems of land subsidence and air pollution, a plan has been made to move the capital to Nusantara, and construction of the new capital has already begun.
PSR Analysis: Chinese-made construction machinery is rapidly gaining popularity in the Indonesian market, where price is a key consideration–the initial cost is on average about 20% cheaper than Japanese or Western brands. The quality of Chinese-made machines has improved dramatically compared recently, and the after-sales service is also responsive, making it easy for buyers to select them.
- Delivery Time. Besides price, there are other major differences. The most important one is delivery time. Chinese brands are basically delivered immediately, and it is not possible to compete with other brands that take anywhere from two weeks to almost a month for delivery.
- Maintenance. The primary maintenance method is to replace the entire unit assembly, and since high technical skills are not required, Chinese brands can solve problems quickly. However, although there are clear advantages to choosing a Chinese brand, there are also many users who prefer Japanese or Western brands that are highly reliable.
- Mining Equipment is a field that is easily influenced by politics, and the machines that can be used may change depending on who owns the mine. In the case of mines owned by China, it is extremely difficult for Japanese or US brands to enter the market.
- Road Conditions in Indonesia are not good, and there is always a need to maintain highways and main roads. This demand will continue for more than 10-15 years at least. The demand for rental equipment has grown steadily. Although it slowed down during the COVID pandemic, some companies, thinking that they never know what might happen, have switched from buying to renting. PSR
Akihiro Komuro is Research Analyst, Far East and Southeast Asia, for Power Systems Research
