Indian Construction Equipment Market Light at the end of Tunnel

Samir Bansal, General Manager, Off-Highway Research, India

Indian Construction Equipment

The Indian construction equipment market has been volatile for the last few years. After an unprecedented four-fold growth in four years since 2003, the construction equipment demand in India exceeded 50,000 units for the first time in 2007, but declined by nine per cent in 2008 in the wake of the global economic crisis and witnessed a further drop of 11% in 2009.

Construction Equipment Sales
The market recovered strongly with a growth of 45% in 2010 and 22% in 2011, when it peaked at 72,197 units. However, limited access to long-term finance, high inflation, delays in policy decisions and statutory clearances for infrastructure projects adversely affected the sales leading to a market declined by eight per cent in 2012 and a further 15% drop in 2013 to settle at 55,946 units.

In terms of the number of units sold, the Indian construction equipment market is dominated by six machine types. Of these, backhoe loaders, crawler excavators and mobile cranes together accounted for 78% of total market in 2013 against 74% in 2008. While the combined share of mobile compressors, compaction equipment and wheeled loaders decreased from 19% in 2009 to 18% in 2013, the share of remaining equipment declined from seven per cent in 2009 to five per cent in 2013.

The market structure has remained more or less unchanged for the past five years, but vast differences are noticeable while evaluating the performance of individual products. The share of the most popular product, backhoe loaders, grew from 38% in 2009 to 50% in 2013, while crawler excavators, considered to be the most important machine for infrastructure building, declined from 20 to 18% during the same period.

Share Construction Equipment

Mobile compressor was another equipment that improved its contribution from seven to nine per cent. The share of balance equipment declined with mobile cranes dropping from 16 to 10%, compaction equipment from seven to five per cent, wheeled loaders from five to three per cent and other equipment from seven to five per cent.

Off-Highway Research forecasts the crawler excavator to be the fastest growing equipment type, which will account for 29% of the market in 2018. Backhoe loader will continue to be the most popular equipment, but its share will decline to 39% and that of mobile compressors to seven per cent. No change is expected in the contribution of mobile cranes and compaction equipment, while some growth is projected in the shares of wheeled loaders and other equipment.

The current state of the market can be summarised as follows:

Of the six major machine types that dominate the market, sales of four products declined in 2013, one remained almost flat while the sixth showed an upward movement. Their cumulative sales fell by 17% in 2013, while the combined sales of the remaining machines increased by 10%.

The Winners: The market for ten equipment types declined in 2013, while six equipment types recorded gains. The highest growth was noticed in rigid dump trucks, which grew by 45%, followed by mini excavators at 24%, mobile compressors at 13% and skid steer loaders at 11% while asphalt finishers increased marginally. 10 units of articulated dump trucks were sold in 2013 against no sales recorded in 2012.

The Losers: Among the losers in the market for major equipment types, mobile cranes declined by 32%, crawler excavators by 26% and backhoe loaders by 14% in 2013. Wheeled loaders fell by six per cent and crawler dozers by three per cent and motor grader sales declined by 13 per cent. Crawler loaders, wheeled excavators and RTLTs recorded a 67, 42 and 11% drop respectively but on insignificant sales volumes.

Construction Equipment Forecast

Although the Indian economy has shown lower than expected growth in the last two financial years, the situation is predicted to improve in the future. Major challenges for the construction equipment market did arise from delays in policy decisions, which are often set aside as the government struggles with a wide number of social and political issues on a daily basis. Major non financial constraints include problems related to land acquisition, and procedural and approval delays, especially for environment and forest clearances.

The government has been slow in reforming its regulatory and administrative structure, and this has resulted in the on-going gap between the planning and execution of all infrastructure projects. The continual allegations of corruption charges being faced by several political leaders, and the incoherence within the ruling coalition on development issues, hampered decision making at every level in the government.

Display of equipment for private treaty transaction

Other challenges mainly come from the widening current account and fiscal deficits, though the government in its interim budget presented in February 2014 did try to address these issues. The Reserve Bank of India is pursuing its high interest rate regime that was put in place to tame inflation during 2010-2012, but the new government, expected to be in place by the end of May 2014, may have a second look at this policy.

Some infrastructure projects were cleared recently on an adhoc basis, but it is expected that after the general election, scheduled during April-May 2014, the situation may turn favourable for infrastructure growth. In the long-term, it is understood that the government's obligation to bridge the massive infrastructure deficit in the country will outweigh all other unfavourable factors, hence despite this prevailing uncertainty, most construction equipment suppliers are optimistic about the future growth.

Off Highway Research

Off-Highway Research is bullish about the future growth of the construction equipment industry in view of the high potential that exists in the country. The simple truth is that there is a massive amount of work to be done in every sector, and this will call for large volumes of equipment to complete it. How large those volumes will be is totally dependent on government's effectiveness in facilitating project execution and addressing the key impediments highlighted above.

The market for construction equipment is forecast to grow by around eight per cent in 2014 and witness a higher 10-14% expansion during 2015-2018. The demand is expected to grow to 60,655 units in 2014, and reach 96,730 units by 2018.

Almost all types of equipment will witness growth, though the market will continue to be dominated by the six most popular products: backhoe loaders, crawler excavators, mobile cranes, mobile compressors, compaction equipment and wheeled loaders. Together these will account for 94% of the market in 2018.

Importantly, demand for equipment that has sold only in small numbers in the past, such as mini excavators, rough terrain lift trucks and skid-steer loaders, may also increase considerably. 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 at this point in time.
Click Here
To Know More or to Contact the Manufacturer
Please let us know your name.
Invalid Input
Please let us know your Designation.
Please let us know your Contact Number.
Please let us know your email address.
Please brief your query.
Our other Value-Added Services:

To receive updates through e-mail on Products, New Technologies & Equipment, please select the Product Category(s) you are interested in and click 'Submit'. This will help you save time plus you will get the best price quotations from many manufacturers, which you can then evaluate and negotiate.

Invalid Input
Invalid Input
Invalid Input
KOBELCO Construction Equipment India (KCEI) formally launched its new variants in the 14-ton range of Hydraulic Excavators at a function held at its manufacturing plant in Sri City, in A.P. The event coincided with

Read more ...

Sany India, which has two authorized dealers in Gujarat with 8 branch offices, has further strengthened its presence in the state by inaugurating a new branch office of its authorized dealer, RS Infra Equipments

Read more ...

Tata Hitachi, one of India’s oldest construction machinery companies and the largest excavator company, celebrated the landmark milestone of 60 years with the commemoration of its state-of-the-art manufacturing facilities

Read more ...

Alastair Hayfield, Senior Research Director at market research firm Interact Analysis, takes a look at the challenges in electrification of off-highway vehicles, the equipment category that will lead electrification

Read more ...

Tata Hitachi’s new CEV-4 (BS4) compliant TL340H Prime is a next generation wheel loader that promises reliability, low cost of operation, and higher profits. It reduces fuel consumption by as much as 20% on the back

Read more ...

Cat®424 was launched by Gmmco Ltd and Caterpillar Inc. on 23 July 2021, in a grand online event, which saw enthusiastic participation from customers and industry insiders. Commented V. Chandrashekar

Read more ...

GMMCO and Caterpillar, along with their customers, celebrated the launch of the Hindustan 2021E (an upgraded version of Hindustan 2021D) on 7th July 2021. The event was hosted online and saw an enthusiastic

Read more ...

ICRA estimates a 15-20% growth in CY2021. The industry is likely to continue with its growth trajectory till CY2023, before moderating in CY2024. The mining and construction equipment (MCE)

Read more ...

Mahindra: Driving Prosperity
Mahindra & Mahindra has introduced its BSIV-compliant new RoadMaster G9075 and G9595 Motor Graders, and the new EarthMaster SX, VX Backhoe Loaders. The company has further enhanced the overall machine

Read more ...

Mini excavators are finding increasing acceptance across projects, given their widening scope for varied applications, especially urban construction jobs where space is limited for larger machines to operate

Read more ...

The R 928 G8 crawler excavator is a completely new model, developed and produced by Liebherr-France SAS in Colmar. The new model positioned between the R 926 G8 and the R 930 G8 complements the current Generation

Read more ...

Caterpillar®, the world’s largest manufacturer of construction and mining equipment, enters the 50th year of manufacturing in India. The company has a long history of equipping its machines with leading-edge technology to

Read more ...

Tata Hitachi Construction Machinery Company launched the EX 215LCQ Super+ series Quarry excavator on 10th March 2021 at its manufacturing plant in Dharwad, Karnataka in the presence of a distinguished gathering

Read more ...

L&T Construction & Mining Machinery hit a new milestone with the commissioning of the 1000th Komatsu PC210-10M0 Hydraulic Excavator. At separate events held at customer sites, the 1000th machine was handed over to Somendra

Read more ...

JCB India Ltd has launched its new range of CEV Stage IV Backhoe Loaders at its Headquarters in Ballabgarh (Delhi-NCR). The range entails the new 3DX Plus, the 3DX Xtra, the 3DX Super & the 4DX to meet a wide range

Read more ...

Lintec & Linnhoff has ended the partnership with Ardent Maschinenfabrik (formerly known as Linnhoff India) as of January 7, 2021. All previous manufacturing and distribution of their products through Ardent has

Read more ...

As global economies continue to reel from the effect of the Covid-19 pandemic, the vaccine roll-out gives us reason for optimism. The talk now is of economies bouncing back after a poor 2019 and a catastrophic 2020

Read more ...

Hyundai Construction Equipment has launched an upgraded series of excavators under the name SMART PLUS, with the company’s global colour, to strengthen the brand’s positioning in India and export markets. A total of

Read more ...

With its range of compactors, graders, backhoe loaders and dozers, and now the newly launched CX220C Crawler Excavator, CASE India continues to grow its product portfolio, manufacturing capabilities, and customer touchpoints

Read more ...

Beating the Covid-19 pandemic blues, manufacturers are offering a range of excavators from mini, medium to heavy capacity, loaded with telematics for better machine management and attachments for a range of multi-utility

Read more ...

Sign-up for Free Subscription
'India Construction Week'
Weekly e-Newsletter on Construction Industry
Get the latest news, product launches, projects announced / awarded, government policies, investments, and expert views.