Ajay Mandahr - Escorts Construction Equipment

Ajay Mandahr, CEO - Escorts Construction Equipment
2020 should be a decent year as compared to this year. Government’s infra push, increased mechanisation, and pre-buying due to the new emission norms will result in positive demand. In unit sales, we expect the overall CE volume to be similar to the 2018 levels. We also foresee equipment price escalation of 10-15 percent due to the new emission compliant engines.

The first three quarters of 2020 will be better.
2020 will be better as there would be some pre-buying starting from Jan 2020 onwards. As per my understanding, the fourth quarter may throw some initial challenges due to the price hike etc., but after that reality would prevail and the market would rebound strongly.

In the mid to the long-term, the construction equipment market would continue its growth journey, mainly due to the infra development priority set by the government. Good infrastructure is a big enabler for “Make in India” initiatives. The government has planned to invest 1.5 trillion USD in the next five years in infra building. All this will help to build the equipment market and I think the sentiments will turn positive as we go along.

Escorts will be fully ready with its BSIV compliant machines in 2020.
At Escorts, we are on schedule to meet the BSIV compliant engines’ timelines. We are trying various combinations and taking a frugal approach to minimize the cost impact on our customers. The new generation machines are in various phases of testing and their performance is good.

Escorts Construction Equipment

Any transition from the backhoe loader to the mini excavator has to make business sense for the end-user.
According to a recent study, around 15-20% of the backhoe market in India will shift to the mini excavator. But, for the possibility to become a reality, the business viability remains to be seen, and how well the applications of the backhoe can be performed by the mini excavator has to be studied.

As a multi-utility machine, the backhoe offers a lot of versatility in loading, digging, and in several other related applications, along with high mobility, whereas the mini excavator can perform a majority of the job at higher levels of throughput, but mobility is an issue. It has to be transported by truck to the jobsite, which adds to its usage cost. The value equation might be more favourable for the mini excavator in job sites that do not involve too much movement.

No doubt, the higher cost of the BS IV complaint machines will put an initial pressure on the buyers, especially the rental companies, and would instigate a re-evaluation of the current solutions.

With the engine and controls becoming more electric in nature, equipment owners can have a better output from the IoTs installed in their machines.
From Bharat Stage II to III, and now going onward to Bharat Stage IV, effective from October 2020, the engine is becoming more electronic; this will make the IoT and telematics more efficient, effective and supportive for the users. These connected machines will help in performance modulations based on actual onsite requirements.

Today, IoT has become a must in most of the machines, be they compactors, backhoes, excavators, etc. With the fully IoT integrated machines, owners can control everything as per their requirements and targets, and capture all other aspects of their machine’s performance and productivity.

Escorts Construction Equipment HD-85 and Dig Max

Users of Truck Cranes will grow substantially.
The future of the crane market remains promising as Indian companies are adopting the best international lift and move practices. For the new Rough Terrain (RT), All Terrain (AT) and Truck Cranes, the market is estimated at around 350 units. Going forward, we are quite optimistic of a higher demand for Truck Cranes, which offer much more flexibility, while volumes of the RT and AT cranes are expected to remain low over the medium term.

Truck cranes are the ideal machines for material handling applications and offer a higher level of mobility. In fact, we see the RTs being replaced by the Truck Cranes to some extent in the long run; so, we are betting big on this segment, which is estimated to grow by 10-12% CAGR in the next 4-5 years.

There should be a clearly defined structure for import of used/old equipment.
To avoid India becoming a dumping ground for overaged, end-of-the-life products, there has to be a clearly defined structure for import of used equipment with stringent compliance mechanisms. This will help in developing the domestic industry and complement the Make in India initiative.

Buyback, Refurbishment and Resale (BRR) are more viable for a high value product.
In smaller equipment, I don’t think refurbishment and resale can make economic sense for the organized sector, but in the bigger and high value capital-intensive equipment, BRR is a volume multiplier; it brings value to the customer and can drive the overall expansion of the industry.

We have recently started to offer buyback options on our backhoe loaders with upfront assured buyback value. This will also help us to enhance our customer relationship as we will be able to deliver a more enriched customer experience through the life cycle of the equipment.

Escorts Construction Equipment Jungli and EC5250

Hybrid and all-electric machines are high on our agenda and we can build 100% electric models anytime as per demand.
At Escorts, developing an electric machine ‘work is in progress’. We have the technology available so we can build 100% electric models anytime, as per demand. Currently, high battery cost and storage capacity is a challenge, but the battery technology is evolving fast and the solutions are expected to be available at the right price soon. We remain optimistic of both Hybrid and Electric machines and will keep investing in them.
NBM&CW December 2019
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