India Off-Highway Research.
Sales in rental market constituted nearly 75 per cent in 2018 and will continue to have a dominant share of demand.
Off-Highway Research is optimistic about the growth of the mini excavator market in the country and projects it to grow to 1,400 units in 2019 and reach a level of 2,500 units by 2023. Samir Bansal, General Manager, India, Off-Highway Research shares his views on the mini excavator market with EQUIPMNET TIMES. Excerpts from the interview…
What is the current market size for compact excavators?
Demand for mini excavators has been growing since 2007, but their sales remained below 100 units until 2010. However, growth rate picked up from 2011 and reached a peak of 1,322 units in 2018. Government’s focus on rural and urban infrastructure development, consistent demand from agriculture and plantations, and shortage of manual labour are the key drivers for growth of mini excavator demand.
Off-Highway Research is optimistic about the growth of the mini excavator market in the country and projects it to grow to 1,400 units in 2019 and reach a level of 2,500 units by 2023.
Which are the major verticals that are driving the demand?
The market for mini excavators initially expanded because of its use in plantations in the southern part of the country, but later it was found to be productive in some niche applications in narrow and constrained spaces. A growing shortage of manual labour and relatively better productivity and the nature of projects in the urban and semi-urban areas have been instrumental to its growth. The 2.6 – 4.0T class is most popular and accounted for 69 per cent domestic sales in 2018.
What have been the trends in using various attachments with compact excavators?
Applications for mini excavators include plantations such as rubber, tea, coffee, banana, pineapple, coconut, grapes and areca nut. In general construction, it is used for foundation work, basement digging or renovation work, demolition, pipe and cable laying, trenching, tunnel works, ditch and river cleaning, well digging and truck loading.
The machine also finds applications in industries such as steel, aluminium and sponge iron factories for cleaning around the furnace in tight spaces. In addition, the machines are also used in farmland digging, reclamation and cleaning in agricultural application. Some machines are also used for golf course maintenance.
Could you throw some light on the rental scenario of compact excavators?
Rental is a popular segment for mini excavator sales and constituted nearly 75 per cent sales in 2018 and will continue to have a dominant share of demand. Limited mobility compared to wheeled machines is a challenge, which restricts demand of mini excavators to an extent. However, the self-loading machines can easily be transported on small trucks.
Do you think the rising popularity of mini excavators may adversely impact the backhoe market / skid steer market?
The rising popularity of mini excavator is not a challenge for backhoe loaders as wheeled machines are generally preferred in India, because of their good mobility. However, there are many applications where a backhoe loader is too big to be used, especially if there is a space constraint, where a smaller mini excavator performs a better job with greater productivity.
India is a growing country with many on-going small, medium and large infrastructural projects, which will have greater demand for larger machines and proportionately lower demand for mini excavators. Therefore, the market for mini excavators will not expand to the level of other developed economies such as Europe, the US and Japan in the foreseeable future.