Construction equipment

South Korea’s Electricity Market Reform to Net-Zero Will Drive Demand for Construction Equipment

DUBLIN, July 29, 2022 /PRNewswire/ — The “South Korea Construction Equipment Market – Strategic Assessment and Forecast 2022-2028” report has been added to from offer.

Research and Markets

The construction equipment market in South Korea is expected to grow during the forecast period due to South Korea the reform of the net-zero electricity market and factors such as the growth of the e-commerce sector and the government’s efforts to promote public and private investment in the country.

Demand for construction equipment in South Korea is expected to increase due to planned investments in the construction and manufacturing sectors and ongoing infrastructure projects.

Reform South Korea Net-zero electricity market will drive demand for construction equipment.

The 9th Basic Plan for Electricity Supply and Demand in South Korea plans to increase the share of renewables in installed capacity to 40% by 2034, from 15.1% in 2020. According to the plan, all coal-fired power plants with operational life cycles of 30 years will be closed by 2034.

From 2020 to 2034, the plan includes 15-year electricity supply and demand forecasts and electrical installation plans. Evaluation of the previous program; Forecasting long-term supply and demand; Demand management objective; Plan of power generation and transmission facilities/substation; Extension of distributed power supply; Greenhouse gases and an acceptable dust reduction plan are among the main objectives of the project.

During the forecast period, there will be a huge demand for construction equipment to build the infrastructure needed for the reform of the South Korean power system. Infrastructure, such as power plants and greenhouses, will drive the demand for material handling and the entire construction equipment industry in South Korea.

The demand for forklifts and telehandlers will increase as the e-commerce sector grows

South Korea has many internet users (96.5% of the population in 2020) and has grown by 1.1% in 2021, thanks to the deployment of modern technologies (such as the 5G network), which has fueled the growth of the e-commerce sector of the country.

Some e-commerce companies are also expanding their operations in the country. For instance, Una Brands has partnered with KlickBrands to gain access to the South Korean e-commerce sector. In addition, companies from South Korea are expanding their logistics centers, such as Hines, which announced the development of Iljuk Logistics Center to expand its logistics capacity. CJ Logistics announced that the construction of distribution centers worth $621 million would increase the demand for forklifts.

As a result, the expansion of South Korea The e-commerce sector is benefiting the forklift market in the region. Booming trade in the region’s seaports is also supporting demand for forklifts and telehandlers (South Korea has an export-dependent economy with about 52% exports of all activities). Forklifts and telehandlers are used for loading and unloading and material handling in seaports. The need for forklifts has increased due to the increased flow of cargo through ports.

Government efforts to promote investment fuel construction equipment growth

To promote public investment, the government is emphasizing the improvement of transport and logistics systems and the construction of smart buildings, zero energy buildings, smart cities, etc. The government announced a $20 billion budget for 2021.

In addition, the government also encourages private investment, for which the government has announced a $31.2 billion of the budget for 2021. These efforts to encourage investment mainly reduce the unemployment rate, since unemployment is one of the important challenges South Korea faces after the COVID-19 pandemic. To overcome the same, the government has invested ~$17 billion (which includes start-up support programs, programs for middle-aged workers, etc.) in 2021 to create 360,000 jobs.

To reduce unemployment, the government is also focusing on strengthening key manufacturing industries (such as machinery and equipment, mobile phones, automobiles, machinery including computers, home electronics, machine tools, etc.) and services by building digital clusters and modernizing smart factories, among others. This will increase the demand for construction equipment across all major industries (construction, manufacturing, mining, etc.) South Korea.

High Labor Costs and Rising Construction Material Prices Are Squeezing OEM Profit Margins

Due to the high level of labor rights in South Korea, the construction industry is having difficulty hiring experienced workers. The workers of South Korea can operate technologically advanced machinery.

On the other hand, construction companies have to pay high wages to workers to complete the job on time and efficiently. In addition, construction materials are expensive in South Korea. The prices of raw materials such as iron ore, steel, copper, etc., have risen sharply since the outbreak of COVID-19. For example, in January 2022 the average price of scrap has increased by about 113% (almost double) compared to the price of 2020.

By 2021, average profit margins for companies in the construction industry had shrunk by around 40% compared to 2020 due to these additional costs. Therefore, most construction companies prefer to lease equipment rather than buying new equipment. These trends are having a negative influence on sales of construction equipment.

Unsold homes and a declining population are expected to negatively affect demand.

In 2020, there were more deaths than births (275,800 babies were born and 307,764 people died) in South Korea. Additionally, according to CIA World Factbook, South Korea is one of the top three countries in the world with the lowest birth rate (6.89) in 2021. In 2021, South Korea the total population also decreased by 57,300 compared to 2020.

These factors and high prices have resulted in ~17,000 unsold homes in South Korea for 2021.
With the decline in population and the increase in unsold homes, the construction of new homes is expected to be negatively affected, limiting the demand for construction equipment in South Korea over the forecast period.

Due to the labor shortage, construction equipment with automation and intelligent operation technology is in high demand.

Following the COVID-19 epidemic, South Korea is experiencing severe labor shortages in the construction, manufacturing and mining sectors. Due to a labor crisis, new technologies in construction equipment are in high demand to improve worker efficiency and reduce reliance on labor.

Hitachi, for example, introduced wheel loaders and excavators with automation, intelligent operating technology and the Concise Hitachi Comprehensive Machine Management assistance system. Other major construction equipment manufacturers, such as Hyundai and Volvo, are following similar patterns and introducing new technologies such as 5G, AI, advanced analytics (IoT), etc., into their equipment to address labor shortages in the construction and mining industries, respectively.


  • In 2021, the material handling equipment segment was the largest in the South Korean construction equipment market, followed by earthmoving and road construction equipment. Forklift was the largest segment by type. Investments in the logistics industry, such as expansion of distribution centers, opening of new logistics centers, etc., have boosted the demand for forklifts in South Korea.

  • In terms of end users, the construction industry is expected to generate the highest demand for construction equipment and is expected to continue dominating the market during the forecast period.

  • The growing demand for construction equipment is attributed to investments made by favorable government policies. Foreign multinationals invest in South Koreaupcoming industrial developments in the construction industries and government initiatives.

  • By shifting to intelligent systems driven by IoT and data analytics for service, networking and sustainability, the construction equipment market is transitioning to a more innovative industry.


  • The construction equipment market is captured by Hyundai CE as the leader, followed by Hyundai Doosan Infracore, Komatsu Group, Caterpillar, Hitachi CM and Volvo Construction Equipment. By 2021, these companies will hold nearly 60% of the total South Korean construction equipment market.

  • Yanmar has served customers from South Korea region for more than 70 years. However, it lags behind Liebherr in innovations, despite Liebherr having less than 25 years of experience. In 2022, Liebherr introduced hydrotreated vegetable oils (HVO) as an alternative fuel for construction machinery.

  • In March 2022Hyundai Construction Equipment introduced its new excavator model, HX320A, with energy efficient and environmentally friendly engines.

Main suppliers

Other Important Suppliers

Distributor profile


  • HAEIN Corporation

  • Daijeon machinery

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