INDIA CONSTRUCTION EQUIPMENT MARKET: CURRENT STATUS AND OUTLOOK

– UJJWAL PARWAL

Director and Co-Founder RationalStat LLC

The global construction equipment market is estimated at US$ 192 billion in 2021 and is expected to grow at a strong CAGR of more than 5% during the forecast period, driven by growing sales in China, India, and Latin American economies.  Urbanization and road construction activities are undoubtedly playing a major role in the overall picture of the Indian construction equipment market. Moreover, volatility in the real estate and construction equipment market has resulted in demand-supply gaps that hamper the growth of the sector and its trends.

The global construction equipment market is facing regulatory pressure for introducing electric and hybrid construction vehicles over conventional ones.  Even though the cost of construction equipment and the heavy loans taken for the acquisition of the same still haunts most of the players in the construction market, renting and leasing of such equipment are slowly catching the eye of the market.

Market Overview

Despite the growth, there are some inherent challenges faced by the India construction equipment market. In India, the demand for construction equipment is more than the supply. Hence, most leading manufacturers have invested in India for manufacturing to meet this gap. RationalStat believes the India construction equipment market is mainly driven by robust economic development, substantial infrastructure investments, growing OEM presence, higher FDIs in construction sector, and growing imports.

Key Players in India Construction Equipment Market (Domestic and International)

The industry is quite mature in terms of marketing abilities as compared to the other sectors. The majority of the companies have strategic planning programs in place and have well-chalked-out business strategies at all levels.

In order to enhance their market share, manufacturers operating in the India construction equipment market need to improve quality and service followed by a reduction in costs, increase in product range and finally adopt more aggressive marketing strategies. The competitive edge lies in satisfying customers by delivering higher quality products at lower prices.

Trend Analysis

During the analysis, market study suggests that the suppliers are strongly focusing on launching newer products with greater efficiencies and environment-friendly propulsion systems. Product launch is not the only trend witnessed by the Indian Construction Equipment market. 

Key players in the CE market are optimistic about 2023, with a majority betting on the current rapid pace of investment and fundraising to continue, given the huge amount of available dry powder and the strong interest in the asset class by Chinese OEMs. Chinese equipment is competitively priced, putting domestic and other international products to the test.

Advances in India Construction Equipment Market

Talking about India, the country is witnessing the utmost dedication and absolute innovation strategies in bringing new technologies into the market. For instance,

• On 26 July 2022, Tata Hitachi launched its 5-Tonne Wheel Loader ZW225 from its Kharagpur plant which replicates a Japanese technology, but Made-in-India. Packed with innovative technologies coupled with unmatched productivity and an efficient Cummins engine (that adheres to CEV-IV emission norms), ZW225, stands out in the Indian construction equipment market.
• In May 2022, Mahindra’s construction equipment division (MCE) announced the launch of Mahindra RoadMaster G75 Smart road construction equipment for small road contractors. This aims to provide low operating costs coupled with excellent spreading and grading applications appropriate for rural, semi-rural, and district roads, commercial roads, and internal housing.
• Fueling the “product launch trend”, Escorts construction equipment launched its hybrid pick-n-carry crane, being the first in the series of green construction equipment. NXT13DC CNG Crane in the 13-ton class has a 49.5 HP BSIII engine compatible with CNG and a robust straight axle backend, the company said.
• This equipment is also the first mono chassis-safe crane with a 25T lift capacity. With a maximum height of 13m and 14×24 heavy-duty rear tires coupled with low operating cost and a hybrid engine, makes it is one of its kind and the best option available for the key players operating in the Indian construction equipment market.
• In July 2021, JCB India launched its new range of CEV Stage IV-compliant wheeled construction equipment vehicles, including Backhoe loaders, soil compactors, and telehandlers, complying with new emission norms.
• In 2022, Volvo Construction Equipment (Volvo CE) started its work on the world’s first emission-free hydrogen fuel cell articulated hauler prototype, the Volvo HX04. This is by far the best invention to promote green energy in construction equipment.

Conclusion

Overall the trends in the Indian CE market is expected to witness a flight in technological innovations and novelties, mainly diverting towards green and hybrid engines. Moreover, the upcoming year is expected to bring more sustainable alternatives to diesel, like hydrogen-powered machines and equipment.

Besides, as India’s economy continues to expand in untapped geographies and comparatively less-developed states like Orissa, West Bengal, ensure a strong distribution network, and Madhya Pradesh is expected to drive the sales of the global construction equipment market, providing OEMs with substantial growth prospects.

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