OUTLOOK for Indian Construction Equipment Industry
Construction equipment demand grew 35 per cent to peak at 98,286 units in 2018 but fell 15 per cent to 83,470 units in 2019. Demand declined a further 12 per cent to 73,595 units in 2020, a much less severe fall than the industry’s expectation at the start of the pandemic. The market mitigated the impact of the Covid-19 well and despite a severe second wave of the pandemic, registered a 12 per cent growth with sales of 82,218 units in 2021.
– SAMIR BANSAL
General Manager – India, Off-Highway Research
Construction equipment demand grew 35 per cent to peak at 98,286 units in 2018 but fell 15 per cent to 83,470 units in 2019. Demand declined a further 12 per cent to 73,595 units in 2020, a much less severe fall than the industry’s expectation at the start of the pandemic. The market mitigated the impact of the Covid-19 well and despite a severe second wave of the pandemic, registered a 12 per cent growth with sales of 82,218 units in 2021.
Numerous factors such as the National Infrastructure Pipeline (NIP), the GatiShakti National Master Plan for multi-modal connectivity, National Monetisation Pipeline (NMP), and other government infrastructure programmes, macro-economic situation, policies and reforms, and challenges which impact the construction equipment market.
The industry could not keep the pace with the estimated demand at the beginning of the year due to interplay of global and local factors. Off-Highway Research estimates that the construction equipment market has remained almost flat in 2022. Crawler and mini excavators, skid-steer loaders and telehandler sales are expected to have grown in 2022, crawler dozers, mobile cranes and wheeled loaders remained flat, while asphalt pavers, backhoe loaders, compaction equipment, motor graders and rigid dump trucks are estimated to have declined.
Based on all the foreseeable factors at the moment, the Indian construction equipment market is expected to follow an upward trend in the next five years. Off-Highway Research forecasts the construction equipment market to grow by 9 per cent to 89,350 units in 2023 but predicts it to fall 7 per cent to 83,350 units in 2024 (the general election is scheduled in that year). Nevertheless, it will bounce back with a 9 per cent growth to 90,450 units in 2025 and a further 8 per cent to peak at 97,550 units in 2026. Almost all types of equipment will witness growth, though the market will continue to be dominated by the five most popular products: backhoe loaders, crawler excavators, mobile cranes, compaction equipment and wheeled loaders. Together, these will account for 92 per cent of the market in 2026, with backhoe loaders continuing to remain the largest selling type of equipment but crawler excavators would grow at a faster pace. In addition, the market for mini excavators, skid-steer loaders and telehandlers will expand significantly from current levels.
Asphalt pavers, rigid dump trucks, crawler dozers and motor graders will continue to remain within a limited range. The demand for less frequently purchased equipment, such as articulated dump trucks, crawler loaders and wheeled excavators, will be driven by specific orders, and no future pattern can be predicted for them with any degree of certainty.
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