Infra Engineers India Offers Reliable Used Construction & Mining Equipment
Infra Engineers India has been a trusted player in the used construction and mining equipment industry for nearly a decade for offering cost effective & reliable solutions.
Avinash S, Director, Infra Engineers India Pvt. Ltd., highlights the issue of unauthorized exports of new equipment – a trend that threatens manufacturers, dealers, financial institutions, auctioneers, and service providers, potentially disrupting the used equipment market.
India has solidified its stature as a premier sourcing hub in the construction equipment sector, offering a blend of cost efficiency, exceptional product quality, and timely supply chain management. These compelling advantages make India an irresistible choice for traders globally, catering to their diverse and evolving CE needs.
Infra Engineers India Pvt Ltd. (IEPL) has been a trusted player in the used construction and mining equipment industry for nearly a decade. With 99% of its operations dedicated to used machinery, the company also engages in exporting new equipment, comprising the remaining 1% of its business, under authorization from the manufacturers.
Amid this progress, a pressing challenge is emerging, as IEPL seeks to highlight the issue of unauthorized exports of new equipment. This alarming trend threatens manufacturers, dealers, financial institutions, auctioneers, and service providers, potentially disrupting the used equipment market.
Evading Regulations: Manufacturers impose strict limitations on traders to prevent the export of new equipment. However, many traders circumvent these restrictions by acquiring equipment through third-party agents, arranging financing, and covertly exporting it without the knowledge of manufacturers or financial institutions.
Underpriced Equipment Deals: India's construction equipment export sector has around 500 active traders, with nearly 95% specializing in brand-new machinery. As competition increases, many traders have adapted by implementing agile tactics, such as offering discounted prices that fall below cost.
Critical Risks to Financial Institutions: A significant portion of newly financed equipment exported from the country is supported by non-banking financial companies (NBFCs). However, this equipment is often sold without meeting financial commitments, jeopardizing loan recovery for lenders, and limiting future financing access for legitimate customers.
Financial Setbacks: Selling construction equipment without proper financing poses major challenges. The export of newly financed machinery threatens repayment prospects, prompting financiers to implement stricter funding criteria. If stakeholders fail to address illegal exports of financed equipment, it could destabilize the industry and impede growth.
Obstacles in Pre-owned Equipment: The Indian market increasingly captivates traders worldwide in sourcing both used and new equipment. IEPL's primary focus lies in the used equipment sector. However, insights gleaned from our discussions with international traders reveal that used machinery is frequently priced higher than its new machinery. Moreover, the illicit sale of new equipment at significantly reduced prices is eroding the integrity of the used equipment market, intensifying competition and presenting considerable challenges for equitable trade.
Auctioneer Dynamics: Auctioneers provide a remarkable platform for the substantial sale of newly exported equipment. A significant number of traders have established partnerships with the esteemed auctioneer, Ritchie Bros. It is evident that international traders from countries such as Netherlands, Mexico, and the UAE procure large quantities of units from Indian suppliers.
Minor Hurdles, Major Risks Looming: Manufacturers are currently providing special pricing for the domestic market. However, numerous exporters are taking advantage of this scenario by securing financing and selling equipment through unauthorized channels. Although this issue may appear trivial at first glance, it has the potential to evolve into a substantial problem that could ultimately hinder the growth of the entire industry.
In conclusion, prompt action is crucial. Overlooking the present challenges could place financial institutions and manufacturers in a difficult position in the future. IEPL envisions a collaborative effort among all stakeholders to develop a unified strategy that effectively addresses this pressing concern.
