Turkey Construction Equipment Market - Strategic Assessment & Forecast 2022-2028

MARKET INSIGHTS

Turkey construction equipment market was valued at USD 2 billion in 2021 and is projected to reach USD 3.17 billion by 2028, growing at a CAGR of 6.86%. The growth in construction equipment is majorly driven by government investment in transportation infrastructure, healthcare projects, and manufacturing.

Turkey's Economy During the Pandemic

Turkey's economy was adversely impacted by the COVID-19 pandemic, which led to a ~5.4% contraction of GDP in 2020. However, according to the Turkish Statistical Institute, in 2020, despite the pandemic, the construction sector grew by 17.3% compared to 2019.

In 2021, the GDP witnessed a growth of ~11%. The government focused on improving its infrastructure by investing USD 18.5 billion in 3,091 projects to boost its transportation and communications sector, including USD 5.7 billion in public transport and logistics and USD 2.7 billion in education. Increased industrial production and exports were the driving force behind Turkey's economic development in 2021.

According to the Turkish Statistical Institute, after a significant rebound from COVID-19 in 2021, GDP growth is expected to ease progressively in 2022 and 2023, with growth of 3.3% and 3.9%, respectively. Turkey's macroeconomic growth is strong, with rising per capita income. Agricultural machinery, construction & mining machinery, energy equipment such as electric motors & turbines, food processing & packaging machinery, HVAC, lifting & handling equipment, metalworking & machine tooling, pumps & compressors, and textile machinery all have plenty of opportunities due to Turkey's strong industrial base and global demand.

Investments in Transport and Healthcare Infrastructure Projects

Turkey's government is investing USD 325 billion in infrastructure projects that include transportation infrastructure, which will support the increase in demand for earthmoving and road construction equipment. The transport projects include USD 80 billion investment in road construction projects, USD 30 billion investment in the high-speed rail network, USD 30 billion in ports, and USD 30 billion in airport infrastructures.

Transport infrastructure projects include the coverage of access rail links such as Ankara - Istanbul HSL (USD 3 billion), Ankara - Sivas - Erzincan HSL (USD 1.2 billion), Istanbul Big Tunnel (USD 3.5 billion), Third Istanbul Airport (USD 6.9 billion), etc. which would be completed by 2023. According to Turkey's Ministry of Transport, Maritime, and Communications, to meet the 2023 targets, the expected expenditure on port development exceeds USD 30 billion.

Turkey's Ministry of Health received USD 7.8 billion in 2021, out of which USD 3.7 billion was allocated for treatment services and USD 1.3 billion for preventative health services. The increased budget in the healthcare department will support the development of healthcare systems in the country, establishing more hospitals. Thirty hospitals are in the pipeline; the total number of beds in these hospitals would be ~40,500. Istanbul Sancaktepe City Hospital (4,200 beds), Ankara Bilkent City Hospital (3,711 beds), Ankara Etlik City Hospital (3,624 beds), etc., are among the hospitals in the pipeline.

Increase in the Demand for Cranes Due to High Demand for Prefabricated Constructed Buildings

According to the Turkish Construction Equipment Distributors' and Manufacturers' Association, the high demand for modular constructed buildings is expected due to environmental laws in response to pollution concerns.

Although the price of the prefabricated buildings is high, it is not affecting the demand for modular construction in Turkey. According to Turkey's Eleventh Development Plan, it is estimated that most of the newly constructed buildings in Turkey will be prefabricated by 2030 as Turkey's infrastructure developers are majorly adopting the prefab construction technique.

Importing Construction Equipment to be Costlier due to Rise in Inflation Rate

In 2021, inflation in Turkey had been exacerbated by a dramatic fall in the value of the Turkish lira, which lost more than 40% of its value against the United States dollar, resulting in supply chain disruptions and shortages of raw materials. According to the Turkish Statistical Institute, in February 2022 inflation rate in Turkey was at ~50%. The rise in the inflation rate is expected to reduce the import of construction equipment, causing halting the construction projects, adversely impacting the demand for the overall construction equipment market in Turkey.

Russia-Ukraine War to Impact the Production of Construction Equipment  

In 2021, Turkey imported USD 27.6 billion and USD 5.2 billion of iron and steel from Russia and Ukraine. Though Turkey is one of the largest exporters of iron and steel, the disruption in the supply chain due to the war will adversely impact the production of construction equipment in Turkey. The reduction in domestic production of construction equipment and the high inflation rate will adversely impact Turkey's demand for construction equipment.

Environmental Policies & Initiatives to Increase Usage of Excavators and Loaders in the Waste Management Industry

The growing wave of waste is creating a political problem for the Turkey government as the country has become Europe's garbage dump. Plastic waste that the European countries claim is recycled, such as the UK. In reality, it is being dumped and burned overseas, causing a health emergency for local people, killing wildlife, and polluting oceans.

The Turkey government is implementing measures to reduce the amount of waste in landfills and seas. The government has initiated several waste management programs to reduce solid waste generation and promote recycling initiatives. In 2021, Adana (City in Turkey) integrated solid waste management system will be carried out by ITC (Invest Trading & Consulting AG). The project covers rehabilitation of existing dumpsite, construction, and operation of a sorting plant, anaerobic digesters, and installation and operation of a landfill gas utilization plant.

KEY HIGHLIGHTS

• In 2021, the material handling segment was the largest segment in Turkey construction industry, followed by earthmoving and road construction equipment. The forklift was the largest segment by type. However, an excavator was the fastest-growing major construction equipment in 2021. The demand for excavators is expected to rise due to various government investments in infrastructure development and growth in renewable energy.
• The construction industry is expected to generate the highest demand in end-users, owing to the "Turkey Eleventh Development Plan 2019-2023" program, which is expected to dominate the construction equipment market over the forecast period.
• The construction equipment market in Turkey is moving to a more innovative industry at a faster rate than other emerging countries throughout the world by switching to intelligent systems driven by IoT and data analysis for service, networking, and sustainability.
• Construction equipment rental companies account for the major market share in Turkey; due to the significant number of SMSEs in Turkey's construction industry, rental companies are expected to have higher demand than non-rental companies.

VENDOR LANDSCAPE

• XCMG, Komatsu, Caterpillar, Volvo Construction Equipment, Liebherr, and SANY have significant Turkey construction equipment market share. The companies have a strong distribution network and high experience in Turkey.
• XCMG, Komatsu, Caterpillar, Volvo Construction Equipment, Liebherr, and SANY are market leaders, accounting for nearly ~59% of the overall construction equipment market share in 2021.
• Yanmar has served the customers of the Turkey region from the past more than 50 years. However, it lags behind SANY in innovations though SANY has less than 30 years of experience in the region. In early 2022, SANY introduced its first 300-ton electric-drive front shovel.
• In 2022 Hidromek launched a hydraulic system designed for H4 Series excavators that would be fuel-efficient in Turkey.

REPORT COVERAGE

Earthmoving Equipment:

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

Road Construction Equipment

• Road Rollers
• Asphalt Pavers

Material Handling Equipment

• Crane
• Forklift & Telescopic Handlers
• Aerial Platforms (Articulated Boom Lifts, Telescopic Boom lifts, Scissor lifts)

End Users

• Construction
• Manufacturing
• Mining
• Others