Hitachi Construction Machinery announced that a joint demonstration test will begin with Fukudome Kaihatsu in Tosa, Kochi Prefecture, using a ZX200A-7 20-ton class hydraulic excavator and a real-time digital twin platform. The test will be conducted in  June 2026 at a river dredging project site in the Niyodo River Mochiishi District.

The platform integrates 3D terrain data, camera images, construction machinery, vehicles, and worker location information in real time, and reproduces the worksite in a virtual 3D space. The demonstration will compare remote operation under direct visual observation, remote operation using camera images, and remote operation using the real-time digital twin platform, in order to verify its effect on safety and productivity.

A related example can be seen in agricultural machinery, where NTT, Kubota, and NTT DOCOMO demonstrated communication technologies for the remote operation and monitoring of robotic agricultural machinery in mountainous areas. The demonstration combined mobile and satellite communications with video control technology to support stable remote operation under fluctuating communication conditions.

Source: Hitachi Construction Machinery / NTT, Kubota and NTT DOCOMO

PSR Analysis: The significance of this announcement is not simply that Japanese construction machinery is becoming more digital. The more important point is that Japan’s off-highway sector is beginning to show a practical path for dealing with one of its most serious structural constraints: the shrinking supply of skilled operators.

In Japan, the discussion around construction machinery and agricultural machinery often turns quickly to electrification or autonomy. Both are important long-term themes, but they are not necessarily the first areas where the market will see broad practical adoption. On many construction sites, especially in civil engineering, disaster recovery, and regional public works, the immediate problem is not how to replace the diesel engine. It is how to keep work moving when experienced operators are becoming harder to secure, and when safety requirements are rising.

That is why remote construction using digital twin technology deserves attention. Full autonomy remains difficult in construction because the work environment is highly variable. Ground conditions change, surrounding objects move, work procedures differ by site, and judgment often depends on the operator’s understanding of the whole worksite. A digital twin platform does not remove the operator from the process. Instead, it gives the operator and site manager a better view of the jobsite and supports better decision-making from a remote location.

This distinction matters. Remote operation and worksite visualization can be introduced as an extension of existing hydraulic excavators and construction workflows. They do not require an immediate shift to a completely new machine architecture. For users, that makes adoption more realistic. For OEMs and suppliers, it means that competitiveness will increasingly depend on how well machines can be integrated into connected worksite systems, not only on conventional measures such as power, durability, fuel efficiency, or hydraulic performance.

The agricultural machinery case points to the same issue from another direction. Robot tractors and other automated machines cannot operate safely at scale without stable communications, reliable video transmission, and remote monitoring. In mountainous areas, where communication quality can fluctuate sharply, the machine itself is only one part of the solution. The broader system — communications, software, sensors, video control, and supervision — becomes just as important as the vehicle.

For the Japanese off-highway market, this suggests that “labor-saving” may become a more immediate commercial driver than electrification. Diesel-powered machines are likely to remain in use for many applications, but they will be expected to operate within increasingly digital and remotely managed environments. The future competitive question may therefore shift from “who builds the best machine?” to “whose machine fits best into a safer, more productive, and more remotely managed worksite?”

This is a meaningful direction for Japan. It plays to the country’s strengths in machinery, field engineering, telecommunications, and incremental system integration. It also addresses a problem that is already visible in the market: not a shortage of machines, but a shortage of people who can operate them efficiently and safely. PSR

Akihiro Komuro is Research Analyst, Far East and Southeast Asia, for Power Systems Research

The company also secured a KRW 27 billion contract to supply 50 15-ton DEVELON bulldozers to the Polish military. This is the company’s first major military procurement order in Europe.

In addition, HD Construction Equipment signed an MOU with the Mykolaiv regional government in Ukraine to cooperate on reconstruction projects. The scope of cooperation includes not only construction equipment supply, but also training, financing, and energy infrastructure recovery.

Source: HD Construction Equipment / HD Hyundai / HD Construction Equipment

PSR Analysis: These announcements should not be read simply as a series of export wins. The more important point is that HD Construction Equipment is expanding into overseas markets where construction machinery is closely linked to infrastructure, defense, mining, and reconstruction.

The ADT order in Norway is a clear example. Articulated dump trucks are not general-purpose machines. They are used in demanding off-highway applications such as quarries, tunnels, soft ground, and rough terrain. Being selected by a major Northern European rental company suggests that Korean construction equipment is being evaluated not only on price, but also on uptime, durability, service support, residual value, and suitability for professional heavy-duty work. This indicates that Korean machines are moving into markets with higher operating requirements, rather than remaining only a lower-cost alternative.

The bulldozer contract with the Polish military should be viewed in the same context. Since the war in Ukraine, Europe has been strengthening both defense capability and infrastructure resilience. Bulldozers and excavators are not combat equipment, but they are essential for military infrastructure, mobility support, and emergency recovery. Construction machinery is therefore becoming more clearly connected to defense and public procurement.

The Ukraine reconstruction MOU has a longer-term significance. In reconstruction markets, selling machines alone is not enough. Suppliers need to support operator training, maintenance, financing, and local implementation. HD Construction Equipment appears to be positioning itself not just as a machinery supplier, but as a partner in the reconstruction process.

This is a natural direction for Korea’s construction equipment industry. The domestic market alone is too limited to support the next stage of growth, so Korean manufacturers need to target overseas markets where their machines can win in specific applications. Northern European rental fleets, Eastern European military and public procurement, and Ukraine reconstruction are all logical targets.

For powertrain and component suppliers, the implications are also important. In high-load applications such as ADTs, bulldozers, and large excavators, electrification will advance in selected areas, but diesel engines, hydraulic systems, transmissions, durability, and service networks will remain central to competitiveness for some time. Korea’s recent export moves show that demand for heavy-duty off-highway machinery is likely to remain solid, supported by infrastructure, defense, and reconstruction needs. PSR

Akihiro Komuro is Research Analyst, Far East and Southeast Asia, for Power Systems Research

Ten Thai automotive and auto parts associations have warned that EV adoption is putting pressure on domestic production and that the country’s automotive industry could face a crisis. According to the industry groups, Thai manufacturers are struggling to compete with low-cost, zero-tariff EV imports from China, while local parts suppliers are seeing orders decline.

The associations, which represent more than 1,500 member companies, said in a letter to the government that the industry could face a major shock in 2027, when the current incentive scheme designed to support EV production is scheduled to end. They called on the government to review the EV policy before the incentives expire and to introduce urgent measures to support the industry.

Their proposals include tax reforms to favor EVs produced in Thailand, linking import quotas with domestic production and technology transfer, strengthening local content requirements, promoting the use of Thai-made parts, improving access to raw materials, and tightening rules of origin and technology transfer requirements.

Under Thailand’s EV 3.5 scheme, manufacturers are required to produce two EVs locally for every EV imported in 2026, and three EVs locally for every EV imported in 2027. The Thai government has since adjusted the rules so that EVs produced in Thailand for export can also count toward these production requirements, in response to weak domestic demand and the risk of oversupply.

Source: Reuters / Automotive Logistics / Thailand Board of Investment

PSR Analysis: The issue is not simply that EV sales are increasing in Thailand. The more important point is that Thailand’s EV policy is moving from the demand-creation stage to a more difficult question: whether that demand can be absorbed into the domestic industrial base.

Thailand’s policy was designed to first build the EV market through imports and subsidies and then require manufacturers to localize production. That logic is clear. But if domestic demand remains weak while production obligations increase, manufacturers may end up producing EVs in Thailand without a sufficiently large local market to absorb them. That would raise the risk of oversupply, price competition, and lower plant utilization.

This is why the government’s decision to allow exported EVs to count toward production requirements matters. It suggests that Thailand’s EV strategy cannot rely on domestic sales alone. The next question is not just how many EVs are sold in Thailand, but where Thai-made EVs can be sold, and how much of that production can be linked to local parts, local capability, and technology transfer.

The pressure on existing suppliers is also more complicated than the familiar point that EVs use fewer parts than ICE vehicles. That is true, and ICE-related suppliers will inevitably face pressure. But the deeper issue is that if the EV market grows mainly through imports, higher sales volumes will not necessarily create more work for Thai suppliers. If batteries, motors, inverters, and electronic components remain largely imported, Thailand’s EV market can grow without significantly deepening the local supply chain.

In that sense, 2027 may become less of an incentive-expiry date and more of a sorting point for the Thai EV market. Manufacturers with scale, export channels, distribution networks, financing capacity, and battery sourcing strength will be better positioned. Brands that depend mainly on domestic sales, or cannot absorb the cost of local production, may come under pressure.

This matters for Japanese OEMs and suppliers as well. Thailand has long been the core ASEAN production base for Japanese automakers, but that position will not automatically carry over into the EV era. Japanese companies now need to decide how to reuse the production base they built around ICE vehicles in a market where the competitive rules are being rewritten by batteries, electronics, cost, and speed.

Thailand’s case also carries a wider lesson for Southeast Asia. Expanding EV sales and building an EV industry are not the same thing. Thailand’s ability to become an ASEAN EV hub will depend less on headline EV sales volume and more on whether EV demand can be converted into domestic production, exports, local sourcing, and technology transfer. PSR

Akihiro Komuro is Research Analyst, Far East and Southeast Asia, at Power Systems Research

Komatsu announced that its revenue reached a record high for fiscal 2025 due to the effects of a weaker yen and improved pricing. However, the company explained that profits fell below the previous year’s level due to declining demand for construction machinery in North America and rising costs.

In North America, the company reported that demand for residential construction remained sluggish and that machinery purchases by rental companies had also declined. It also noted that the Asian market remained generally weak.

Conversely, demand for mining equipment remained high, with the resources sector underpinning its performance. It also stated that its parts and services business had performed steadily.

Furthermore, although Komatsu acknowledged that ‘the business environment remains uncertain’, the company expressed the view that ‘infrastructure investment and mining demand will remain robust’.

Source: Komatsu Newsroom

PSR Analysis: Komatsu’s FY2025 results suggest that the global construction equipment market is no longer moving in a synchronized cycle. While North American construction equipment demand weakened due to high interest rates and softer residential activity, mining equipment demand remained resilient, creating an increasingly bifurcated market structure.

More importantly, the results highlight how aftermarket and service revenues are becoming strategically more important than unit sales growth. In previous downturns, OEM performance depended heavily on new equipment demand. Today, fleet digitization, predictive maintenance, and long-life mining assets are allowing major manufacturers to stabilize earnings even as equipment replacement cycles slow.

Another notable point is that weakness in Asia contrasts with continued strength in resource-related investment. This suggests that future equipment demand may become increasingly tied to energy transition infrastructure, mining development, and strategic commodity supply chains rather than traditional urban construction growth.

The regional divergence also creates a more favorable environment for lower-cost Chinese manufacturers in emerging markets. As financing costs remain elevated, contractors in Southeast Asia, the Middle East, and Africa are likely to prioritize acquisition cost over lifecycle efficiency, particularly in non-premium applications.

For Japanese manufacturers, this may accelerate a strategic separation between “premium lifecycle-oriented markets” and “price-driven replacement markets.” In that environment, competitiveness may increasingly depend not only on machine performance, but also on financing capability, parts logistics, uptime support, and digital fleet integration. PSR

The article explains that demand for LNG carriers and high-value vessels remains strong. It also states that demand for low-carbon, high-efficiency ships is growing due to stricter environmental regulations.

The report emphasizes that South Korean shipbuilders have a strong presence in the high-value-added vessel market. While Chinese companies have the upper hand in terms of volume, the analysis suggests that South Korean firms remain dominant in cutting-edge sectors such as LNG carriers.

The increase in orders is due in part to the expansion of Middle Eastern energy projects and the recovery of the shipping market. It also notes that expectations for improved profitability in the shipbuilding industry are rising.

Source: Seoul Economic Daily

PSR Analysis: The recent surge in large vessel orders for Korean shipbuilders suggests that the industry is entering a new phase in which technological complexity is more important than production scale.

While China continues to dominate global shipbuilding volume, Korean shipyards remain highly competitive in building LNG carriers and other technically demanding vessels. This distinction is becoming increasingly important as environmental regulations tighten, and shipowners prioritize fuel flexibility, efficiency, and long-term compliance.

What is often overlooked is the broader industrial impact of this trend. LNG carriers and advanced vessels generate high demand for high-value subsystems, including marine engines, generators, power electronics, cryogenic equipment, and automation systems. Consequently, the current shipbuilding cycle could have a greater multiplier effect on industrial supply chains than previous commodity-driven shipping booms.

Another significant shift is the growing connection between Middle Eastern energy investments and Northeast Asian industrial manufacturing. LNG infrastructure expansion is not just an energy issue anymore; it is also supporting sustained demand for Korean heavy industry exports.

The competitive landscape may evolve differently than in previous cycles. While Chinese shipbuilders are rapidly improving their technical capabilities, Korean companies are moving further upstream toward integrated, engineering-intensive solutions rather than competing purely on vessel output.

This suggests that future competition may focus less on shipyard capacity and more on controlling advanced marine systems, propulsion integration, emissions technology, and lifecycle service capabilities. PSR

Akihiro Komuro is Research Analyst, Far East and Southeast Asia, for Power Systems Research

The Vietnamese agricultural machinery market is expected to grow steadily over the forecast period due to labor shortages in rural areas and rising demand for mechanization. Efforts to improve rice production are boosting demand for agricultural machinery, especially small tractors and tillers. Japanese brands like Kubota and Yanmar maintain a strong market position, but Chinese competitors are increasing their presence. Small-scale farmers consider initial costs, durability, and after-sales service when making purchases. Government policies aimed at modernization are also supporting market growth.

Source: Mordor Intelligence

PSR Analysis: Vietnam’s agricultural machinery market increasingly reflects a structural divide between productivity-oriented mechanization and affordability-driven mechanization.

At first glance, rising mechanization appears supportive for all suppliers. However, the market is becoming segmented between larger commercial operators prioritizing reliability, durability, and aftersales support, and smaller farmers whose purchasing decisions are heavily constrained by upfront financing costs.

This creates a more nuanced competitive environment than simple “Japanese vs. Chinese” narratives suggest. Japanese brands continue to hold strong positions because downtime during planting or harvesting seasons carries significant economic risk. In many regions, service network reliability remains more important than headline machine specifications.

At the same time, lower-cost Chinese products are gradually expanding in secondary applications, entry-level ownership, and rural markets where utilization rates are lower, and replacement economics differ.

Another underappreciated factor is labor availability. Vietnam’s industrialization is steadily drawing younger workers away from agriculture, indirectly accelerating demand for compact mechanization solutions even among smaller farms.

In the long term, Southeast Asia may not converge toward a single agricultural equipment market structure. Instead, multiple market tiers could emerge, with premium Japanese equipment dominating high-utilization commercial farming and lower-cost competitors expanding into price-sensitive segments.

For suppliers, distribution coverage, financing access, spare parts availability, and localized product adaptation may be more important than manufacturing scale alone. PSR

Akihiro Komuro is Research Analyst, Far East and Southeast Asia, for Power Systems Research

Yanmar Power Solutions is advancing the development of engines that are compatible with next-generation fuels. In anticipation of future increased production volumes of marine and land-based engines, the company has acquired a site in Amagasaki City, Hyogo Prefecture.

The new plant will be used to conduct test runs of marine hydrogen engines and to reorganize and strengthen production capabilities, including those of existing plants. The new plant is scheduled to begin operations about March 2029.

In the marine industry, there are ongoing efforts to develop and commercialize decarbonization technologies with the aim of achieving carbon neutrality by 2050. Leveraging its expertise in engine development and production, Yanmar Power Solutions plans to develop powertrains compatible with next-generation fuels, including hydrogen, methanol and ammonia, and establish production systems to support them.

Source: Yanmar Official Release

PSR Analysis: I believe that Yanmar’s latest move indicates a shift in efforts to decarbonize marine engines from the “technology development” phase to the “production system establishment” phase. Although alternative fuels, such as hydrogen and ammonia, have largely remained in the demonstration or conceptual stage, the decision to construct a dedicated factory is a step toward future commercialization. In the marine sector, in particular, there are many large-scale applications for which electrification is not a realistic alternative. It is becoming increasingly clear that the primary approach will be to switch fuels while retaining the engines themselves.

This move will likely entail more than just a technological shift; it will also require a restructuring of the supply chain. Widespread adoption of hydrogen engines requires an ecosystem involving multiple players, including fuel supply infrastructure, ship operators, and port facilities, and cannot be achieved by engine manufacturers alone.

While moves such as this, where manufacturers take the lead in establishing production systems, can be viewed as part of their positioning strategy with an eye toward future market launches, actual demand formation depends heavily on progress on the fuel supply side. Thus, decarbonization in the marine engine sector is shifting from “product competition” to “industry competition linked to infrastructure.” PSR

Akihiro Komuro, Research Analyst, Far East and Southeast Asia, in Power Systems Research

In response to the growing adoption of electric construction equipment, HD Construction Equipment has introduced South Korea’s first safety management certification system for high-voltage systems. The system is designed to educate specialists in maintaining and inspecting high-voltage batteries and electrical systems in electric excavators and other machinery.

Recognizing that the expansion of electric construction equipment requires addressing safety risks that differ from those of conventional diesel machines, the company has developed educational programs and a certification system. Certified individuals receive specialized training in handling high-voltage equipment, troubleshooting, and maintenance operations.

The company positions this initiative as part of the infrastructure development required for the expansion of the electric construction equipment market. HD Construction Equipment plans to continue fostering relevant talent and strengthening its service infrastructure.

Source: HD Construction Equipment

PSR Analysis: I think this initiative shows that South Korean construction equipment manufacturers are starting to see electrification as more than just product development. They view it as an “operation-oriented industrial infrastructure” that includes service systems and workforce development.

Electric construction machinery requires high-voltage batteries and electrical systems, so it demands different maintenance skills than conventional diesel machines. Against this backdrop, manufacturers’ move to establish a certification system reflects their intention to establish electrification in the market as a total solution that includes operation and maintenance, not as a standalone product.

In this regard, South Korean manufacturers’ approach appears to differ from that of their European and American counterparts. In Europe and the United States, service systems based on existing dealer networks are well-established, and efforts regarding electric construction machinery proceed as an extension of these frameworks.

In contrast, Korean manufacturers are proactively establishing certification systems and training programs to address the new risks associated with electrification. This proactive approach effectively mitigates operational uncertainties during the initial stages of electrification, potentially providing a competitive advantage, especially in regions with underdeveloped service infrastructure. PSR

Akihiro Komuro is Research Analyst, Far East and Southeast Asia, at Power Systems Research

Amid rising demand during the dry season and the risk of power plant outages, concerns are mounting in the Philippines over tight electricity supplies. The Energy Regulatory Commission (ERC) has noted that prices on the Wholesale Electricity Supply Market (WESM) could increase by approximately 4 pesos per kWh.

This increase is due to a combination of factors, including high temperatures, the shutdown of some power plants, and rising fuel costs.

These conditions are also causing instability in the power supply at the regional level. For instance, Boracay’s supply capacity has not kept pace with the surge in electricity demand fueled by the tourism recovery, prompting the use of generators in some areas. Although transmission operators aim to avoid power outages through future infrastructure improvements, reliance on backup power sources continues to some extent.

Overall, the Philippine power system is in a precarious state, caught between rising demand and supply constraints. This environment creates a structure that drives up electricity costs and encourages the use of alternative power sources, such as generators.

Source: BusinessMirror, The Manila Times

PSR Analysis: What is noteworthy about this news is not the existence of the generators themselves, but rather, the manifestation of power shortages as price increases, which directly influence demand-side behavior. Generators have been used during supply shortages in the past. However, the confirmation of their use at the same time as the projected rise in WESM prices indicates that we have entered a phase where both electricity costs and supply risks are recognized simultaneously.

Of particular importance is the fact that the grid’s supply capacity is insufficient to handle even relatively predictable factors, such as the recovery of tourism demand coinciding with dry-season demand.

Under these circumstances, demand-side actors may increasingly take proactive steps to supplement their power supply, rather than passively receiving electricity based on costs and supply conditions. Though still limited in scope, in an environment where electricity price fluctuations and supply concerns occur simultaneously, this can be interpreted as a sign that generators’ role is expanding from “emergency use” to “part of supply-demand adjustment.” PSR

Akihiro Komuro is Research Analyst, Far East and Southeast Asia, at Power Systems Research

EcoFlow Technology Japan has announced that it launched its new “DELTA 3 2000 Air” portable power station. Positioned in the 2kWh class, the new unit combines 1,920Wh of storage capacity with a lightweight design aimed at improving portability for household backup power, vehicle use and outdoor applications. The company simultaneously released a 220W lightweight bifacial solar panel using TOPCon cells, presenting the products as a combined solution for improving energy self-sufficiency during outages and off-grid use.

Despite its relatively compact dimensions of 220 × 223 × 426 mm, the DELTA 3 2000 Air offers rated output of 1,000W with 1,500W surge capacity and dual AC outlets. EcoFlow says the unit can support essential appliances such as refrigerators, lighting, notebook PCs and communications equipment during blackouts. The product uses lithium iron phosphate batteries and is rated for about 3,000 charge-discharge cycles while retaining 70% capacity, underscoring its positioning as a long-life backup power device rather than a short-term consumer gadget.

The company also highlighted disaster-preparedness and business continuity planning (BCP) applications, noting that the system can be used for communications backup, temporary server protection and auxiliary power for medical devices in homes and small offices. Its flat handle and compact form factor are intended to make storage easier in limited spaces such as under car seats or in narrow household gaps. The newly launched 220W bifacial solar panel, weighing approximately 5.1 kg, is designed to complement the power station by enabling more autonomous power supply in disaster or outdoor settings.

Source: PR TIMES

PSR Analysis: What matters here is not simply that EcoFlow introduced another portable power station, but that the center of gravity in Japan’s backup-power market is shifting.

For years, portable generators defined emergency preparedness because they were the only realistic way to secure multi-day electricity during disasters. Now, high-capacity batteries are increasingly becoming the first product consumers buy, while engine-driven generators are being repositioned as a secondary runtime extender rather than the primary power source.

That is an important structural change. It means competition is no longer just about output or price, but about where each product sits in the household resilience stack: batteries for immediate indoor use, solar for supplemental charging, and generators for endurance once outages stretch beyond one day. In a market like Japan, where apartment living, noise sensitivity and neighborhood constraints are unusually strong, that hierarchy matters more than it would in North America or other generator-heavy markets.

The deeper implication for the power equipment industry is that this trend does not eliminate small engines, but changes the specifications under which they remain valuable. Standalone generators will gradually lose appeal in urban consumer channels, while quieter inverter units, auto-start capability, cleaner exhaust management and integration with battery systems will become more important.

In other words, the winning products may not be pure battery systems or pure generators, but hybrid ecosystems that reduce the inconvenience of engines while preserving their unique advantage: energy security as long as fuel is available.

For Japanese manufacturers, that suggests the competitive battleground is moving from simple hardware sales toward system design, usability and control logic. The companies that understand this early will be better positioned as disaster preparedness evolves from a seasonal retail category into a semi-essential household infrastructure segment. PSR

Akihiro Komuro is Research Analyst, Far East and Southeast Asia, for Power Systems Research