Vietnam Machinery & Equipment Market Outlook to 2028

Vietnam Machinery & Equipment Market Overview

• The Vietnam Machinery & Equipment market is valued at USD 1.4 billion, based on a five-year historical analysis. This growth is driven by a combination of government-backed infrastructure development, increasing industrialization, and the growing demand for automated and energy-efficient machinery across sectors such as manufacturing, construction, and agriculture.
• Northern Vietnam dominates the market due to its role as an industrial and manufacturing hub, with key cities like Hanoi and Hai Phong serving as centers for heavy machinery production. These regions have established robust infrastructure and logistics networks, which attract investments from both local and international players.
• The governments "Make in Vietnam" initiative aims to promote domestic manufacturing capabilities, especially in high-tech sectors such as machinery and equipment. Launched in 2020, the initiative encourages local companies to develop, manufacture, and export advanced machinery. By 2024, the Ministry of Information and Communications is expected to invest in local production capacity, aiming to reduce reliance on imports and boost technological innovation.

Vietnam Machinery & Equipment Market Segmentation

By Equipment Type: The market is segmented by equipment type into construction machinery, agricultural equipment, industrial equipment, mining equipment, and power & energy machinery. Construction machinery has a dominant market share in the equipment type segment, due to the governments continuous investment in infrastructure development, including roads, bridges, and urban projects. The demand for advanced and automated construction machinery has surged, as companies seek efficiency and precision in large-scale construction activities.

By Application: The market is segmented by application into construction, manufacturing, agriculture, power generation, and mining. The construction segment leads the market, driven by the large-scale infrastructure projects initiated by the government. These include smart cities, transportation networks, and industrial parks. As the construction sector expands, there is a continuous need for modern equipment that can enhance productivity and precision, thus cementing its dominance in the market. Manufacturers such as Doosan and Hitachi are key suppliers in this segment.

Vietnam Machinery & Equipment Market Competitive Landscape

The market is dominated by a mix of local and international players, with leading manufacturers like Vinacomin Machinery JSC, Caterpillar, and Komatsu at the forefront. This market consolidation indicates the dominance of key companies that have established strong distribution networks and supply chains, positioning themselves to meet the rising demand for machinery across multiple industries.

Vietnam Machinery & Equipment Market Analysis

Market Growth Drivers

• Increasing Manufacturing Investments: Vietnam has seen a surge in foreign direct investment (FDI) in its manufacturing sector, which has fueled the growth of the machinery and equipment market. In 2023, Vietnam attracted$23.5 billionin foreign direct investment (FDI) to its manufacturing sector, representing64%of total FDI. The governments focus on developing special economic zones (SEZs) and industrial parks has provided a favorable environment for manufacturers to expand. As more companies establish manufacturing facilities in Vietnam, the demand for advanced machinery and equipment continues to rise, helping to modernize production capabilities.
• Government Support for Industrial Modernization: The Vietnamese government has introduced multiple policies aimed at modernizing its industries. The "National Industrial Policy 2030" emphasizes upgrading the countrys manufacturing capabilities through advanced machinery. The Ministry of Industry and Trade has supported technology acquisition for local manufacturers between 2023 and 2024. This initiative encourages industries to adopt new machinery and equipment to enhance productivity and meet global production standards.
• Growing Demand for Construction Machinery: With numerous infrastructure projects underway, including transportation networks and urban development initiatives, the demand for construction machinery is soaring. The Ministry of Construction has allocated over $5 billion in 2024 alone for key infrastructure projects, including highways, bridges, and public transport systems. These projects require specialized construction machinery, boosting the machinery and equipment market. As urbanization continues, construction companies are increasingly reliant on technologically advanced equipment to meet deadlines and improve efficiency.

Market Challenges

• High Dependency on Imported Machinery: Vietnams reliance on imported machinery continues to be a challenge for the domestic market. In 2023, more than 70% of machinery and equipment used in local industries were imported from countries like China, Japan, and South Korea. This dependence increases costs and extends lead times for procurement, which can hinder manufacturing and industrial expansion.
• Lack of Skilled Labor for Advanced Machinery: Vietnam is facing a shortage of skilled labor capable of operating and maintaining advanced machinery. According to the International Labour Organization (ILO), as of 2024, only 23% of the workforce is considered skilled in the use of high-tech machinery, particularly in the manufacturing and energy sectors. This skills gap limits the adoption of new technologies and affects productivity, especially in sectors requiring precision and automation. Efforts to address this challenge include government-sponsored training programs, but the shortage remains a barrier to growth.

Vietnam Machinery & Equipment Market Future Outlook

Over the next five years, the Vietnam Machinery & Equipment industry is expected to experience substantial growth. This outlook is driven by continued government investments in infrastructure, the rise of manufacturing sectors, and a steady shift toward industrial automation. With Vietnam emerging as a key player in Southeast Asias industrial landscape, the demand for efficient, energy-saving machinery will remain strong.

Future Market Opportunities

• Increased Adoption of Automation: In the next five years, automation will become more prevalent across Vietnams industrial sectors. The government's focus on Industry 4.0 will push local manufacturers to adopt automated machinery and equipment, reducing reliance on manual labor. As labor costs rise and companies seek more efficiency, automation solutions will likely dominate sectors such as manufacturing, logistics, and agriculture. This shift will drive the machinery markets growth as demand for advanced automation equipment increases.
• Growth in Renewable Energy Machinery Demand: Vietnam's renewable energy projects, including solar, wind, and biomass, will continue to drive demand for specialized machinery. The governments Power Development Plan VIII targets an increase in renewable energy capacity by 40 GW by 2030, requiring advanced machinery for installation and maintenance. The machinery market will see increased investments in energy-efficient technologies, contributing to the country's transition to a greener economy.